(a) No branch captive insurance company shall be issued a license by the commissioner unless it possesses and maintains, as security for the payment of liabilities attributable to the branch operations:

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Terms Used In Tennessee Code 56-13-303

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Branch captive insurance company: means any alien captive insurance company licensed by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state. See Tennessee Code 56-13-302
  • Branch operations: means any business operations of a branch captive insurance company in this state. See Tennessee Code 56-13-302
  • 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
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • 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
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) An amount equal to the amount set forth in § 56-13-105 as the minimum capital requirement for a pure captive insurance company; and
(2) Reserves on such insurance policies or such reinsurance contracts as may be issued or assumed by the branch captive insurance company through its branch operations, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses, and unearned premiums with regard to business written through the branch operations; provided, however, that, the commissioner may permit a branch captive insurance company to credit against any such reserve requirement any security for loss reserves that the branch captive insurance company may post with a ceding insurer or that may be posted by a reinsurer with the branch captive insurance company, and in either case if such security remains posted.
(b) Subject to the prior approval of the commissioner, the amounts required in subsection (a) may be held in the form of:

(1) A trust formed under a trust agreement and funded by assets acceptable to the commissioner;
(2) An irrevocable letter of credit issued or confirmed by a bank approved by the commissioner;
(3) With respect to the amounts required in subdivision (a)(1) only, cash on deposit with the commissioner; or
(4) Any combination of subdivisions (b)(1)-(3).
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