Mark Wiedeman, director of captive insurance for the Tennessee Department of Commerce and Insurance, answers questions from Captive Review on Tennessee as a captive domicile and how he has found leading the captive unit during his first year in the role
Captive Review (CR): You’ve recently spoken about how companies are opting to establish captives in Tennessee. What has growth been like in Tennessee so far in 2023?
Mark Wiedeman (MW): Tennessee’s growth has again been robust. The Volunteer State can boast of 159 captives and 503 cells, including 24 captives we’ve licensed this year and several more under review. This has made Tennessee the 8th largest domicile in the nation and the 13th largest in the global captive community.
CR: Are you seeing any specific trends in what consumers are looking for when it comes to captives?
MW: A variety of companies across a number of sectors are continuing to re-evaluate their risk-financing options in light of the ongoing hard market. Choosing to establish a captive is a significant alternative risk-financing source for those retained risks.
CR: You were named captive insurance section director in February. With 2023 nearly completed, what separates Tennessee from the other domiciles?
MW: In addition to being one of the first states to establish captive insurance as an option for companies, Tennessee has a growing reputation for our customer service and responsiveness. That is owed in large part to the support we receive from Governor Bill Lee and the Tennessee General Assembly, as well as the dedicated team of professionals we have in place to assist captives that have chosen Tennessee as their domicile of choice. Tennessee has seen some truly exponential growth in the number of cell captives formed in the state. More and more companies are desiring to enter the captive arena and have found the cell captive structure a great way to experience the benefits of a captive without the upfront cost of forming a full captive company. Tennessee has a fi rm knowledge and understanding of these types of risk-bearing entities and a regulatory structure that is favourable. All of which has attracted them to the state. Another thing that has been driving companies to the state is the level of service that is provided by the department through the highly qualified staff we have. Captives get a dedicated analyst who takes the time to get to know the captive, is willing to ask questions, learn and position themselves to provide the best regulatory experience possible. Building on that, one of our analysts was recently overseeing an exam. During one of the interviews, the captive owner expressed great appreciation for our teams’ open communication. He found our staff to be available for questions when he has to give an existing or potential client information. He said: “Tennessee always picks up the phone.” I like telling people that story because it illustrates how we work with our end consumer as a regulator.
CR: What kind of practices does your team employ to remain visible and at the forefront of people’s minds when it comes to choosing a domicile?
MW: We travel to a number of captive insurance and risk management conferences every year. As you probably already know, Tennessee is known worldwide as a capital of music, and we use that. Gibson Guitars is located in Nashville, as is their factory for electric guitar production. I can’t think of a better way to lean into our reputation as a music state than to give away a home-state product, a Gibson Les Paul, at our booth! Having such an iconic instrument on display allows our staff to make personal connections with captive professionals and owners as they come by. We really want people weighing captive domiciles to have the opportunity to meet our team in person.
