(a) No captive insurance company shall be issued a license unless it possesses and maintains unimpaired paid-in capital and surplus of:

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Terms Used In Tennessee Code 56-13-105

  • Agency captive insurance company: means a company or protected cell formed under this chapter that is owned by an insurance agency or brokerage and that only reinsures risks of policies that are placed by or through the agency or brokerage. See Tennessee Code 56-13-102
  • Association: means any legal association of individuals, corporations, limited liability companies, partnerships, associations, or other entities, whereby:
    (A) The member organizations of such or the association itself, whether or not in conjunction with some or all of the member organizations:
    (i) Own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer. See Tennessee Code 56-13-102
  • Captive insurance company: means any pure captive insurance company, association captive insurance company, agency captive insurance company, industrial insured captive insurance company, risk retention group, protected cell captive insurance company, incorporated cell captive insurance company, or special purpose financial captive insurance company formed or licensed under this chapter. See Tennessee Code 56-13-102
  • Commissioner: means the commissioner of the department, or the commissioner's designee. See Tennessee Code 56-13-102
  • Industrial insured: means an insured:
    (A) Who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer. See Tennessee Code 56-13-102
  • Pure captive insurance company: means any company that insures risks of its parent and affiliated companies or a controlled unaffiliated business or businesses. See Tennessee Code 56-13-102
  • Risk retention group: means a captive insurance company organized under the laws of this state pursuant to the Liability Risk Retention Act of 1986, as amended, (15 U. See Tennessee Code 56-13-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(1) In the case of a pure captive insurance company, not less than two hundred fifty thousand dollars ($250,000);
(2) In the case of an association captive insurance company, not less than five hundred thousand dollars ($500,000);
(3) In the case of an industrial insured captive insurance company, not less than five hundred thousand dollars ($500,000);
(4) In the case of a risk retention group, not less than one million dollars ($1,000,000); and
(5) In the case of a protected cell captive insurance company, not less than one hundred thousand dollars ($100,000).
(b) The commissioner may prescribe additional capital and surplus based upon the type, volume, and nature of insurance business to be transacted.
(c)

(1) Capital and surplus required under subsection (a) must be in the form of cash, cash equivalent, marketable securities, or an irrevocable letter of credit issued by a bank approved by the commissioner.
(2) Marketable securities must consist of bonds of the United States, or any agency or instrumentality of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms, bonds of this state, or bonds publicly issued by any solvent institution created or existing under the laws of the United States or any state of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms.
(3) Captive insurance companies using marketable securities to meet the capital and surplus requirements of subsection (a) shall file with the commissioner a certificate of an official with whom the securities are deposited, stating the time and amount, and that the official is satisfied that they are worth the amount required under subsection (a) and that the deposit is made with the official by the company for the protection of all policyholders and creditors.
(4) Notwithstanding subdivision (c)(1), the commissioner may decline to accept as a deposit any specific issue of securities that the commissioner has determined may not provide the necessary protection to policyholders and creditors.
(d) Except as otherwise provided in this chapter, chapter 9 of this title shall apply to captive insurance companies formed under this chapter.
(e) In the case of an agency captive insurance company, not less than two hundred fifty thousand dollars ($250,000).
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