(a) For purposes of this section:

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Terms Used In Tennessee Code 56-13-125

  • 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
  • Foreign: when used without limitation, includes all companies formed by authority of any other state or government. See Tennessee Code 56-1-102
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(1) “Foreign” means outside the United States, its territories, or possessions;
(2) “Foreign currency” means currency issued by a government outside the United States that is recognized by the United States as a legitimate government-issued currency and freely exchangeable with United States currency; and
(3) “Foreign securities” means securities that are ordinarily traded on an exchange outside the United States.
(b) A captive insurance company or an individual cell of a captive insurance company may, with the approval of the commissioner, include within its plan of operation that the company will:

(1) Receive payments of premium in a specified foreign currency or foreign securities and will pay claims on insured losses in a specified currency or foreign securities;
(2) Authorize the payment of claims in a specified foreign currency or foreign securities; and
(3) Hold foreign currency or foreign securities as surplus for the payment of future claims.
(c) In determining the exchange rate between United States currency and the foreign currency or foreign securities, the captive insurance company shall identify in its approved plan of operation a publicly available and reliable exchange rate index. If the exchange rate index identified in the plan of operation is not available, then the commissioner must determine the appropriate exchange rate for the purpose of calculating the amount of premium tax due.
(d) For the purpose of calculating the amount of premium tax due under § 56-13-114, a policy issued by a captive insurance company payable in foreign currency or foreign securities is deemed to be of an equivalent value in United States currency as of the date that coverage is bound and is payable in United States currency when due under § 56-13-114.
(e) For captive insurance companies and protected cells that have received permission pursuant to subsection (b), all reports required to be filed pursuant to § 56-13-108 must be converted to United States currency for the reporting period covered by the annual report.
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