Tennessee Proposes Updates to Captive Insurance Regulations

The Tennessee Department of Commerce and Insurance will hold a rulemaking hearing on proposed changes to the state's captive insurance regulations.

The hearing will address amendments, new rules and repeals within Tenn. Comp. R. & Regs. 0780–01–41—Tennessee Captive Insurance Companies. The proposals cover annual reporting, premium tax payments, audits, actuarial opinions, examinations, service providers, captive managers, and licensing procedures.

Under the proposed changes, captive insurers would file annual reports using generally accepted accounting principles and submit premium tax forms and payments electronically through the OPTins system. The commissioner could waive the electronic payment requirement for good cause.

The proposal would retain a 3-year examination cycle while allowing the commissioner to extend the period to as long as 5 years for captives that meet annual financial audit requirements. It also outlines the commissioner's authority to approve or reject independent certified public accountants retained by captive insurers.

A proposed new rule would require each captive insurer to file an annual actuarial opinion addressing the reasonableness of its loss and loss expense reserves. For protected cell captives, the opinion would identify any cells with reserves considered inadequate or redundant. The commissioner could waive the requirement for exceptional cause.

Another new rule defines captive service providers and would allow certain Tennessee-based captives using at least two distinct service providers to seek approval to hold annual meetings virtually. The proposal also establishes standards governing the commissioner's approval or removal of service providers and captive managers.

Additional provisions would consider a captive application abandoned if the applicant does not complete the process within 6 months, unless the commissioner grants an extension for good cause. The proposed rules also establish parameters for backdating a certificate of authority or approval to operate.

The hearing is scheduled for 9 a.m. (CT) on October 20, 2026, in Conference Room 1–B of the Davy Crockett Tower, 500 James Robertson Parkway, Nashville, Tennessee.

Questions about the proposed rules and public comments may be directed to Virginia Smith.