NU Online News Service, March 2, 2:49 p.m.EST

With a new insurance commissioner and the governor standingbehind Tennessee's captive insurance program, the state has most ofwhat it needs to be a leader in the region, according to a captiveexpert.

Tennessee, a captive domicile since the 1970s, will soon replaceits statute with a "cutting-edge" law, said Kevin M. Doherty, anattorney with Burr Forman LLP in Nashville, Tenn.

"To have a successful domicile," he said, "you need athree-legged stool. You need the law, a commissioner and adepartment that will advocate and handle it. And third, you need agovernor who is committed to it. Right now, we have two out ofthree and if we get the law, we've got all three."

What's driving the charge, he said, is that his formercolleague, Julie McPeak, has become commissioner of the TennesseeDepartment of Commerce and Insurance, taking office on Jan. 15. Shewas appointed by Governor-elect Bill Haslam.

Ms. McPeak previously served as an insurance regulatory attorneyfor Burr & Forman, LLP in Nashville, Tenn. She also served asthe Executive Director of the Kentucky Office of Insurance(KOI).

In the 1970s, Mr. Doherty said Tennessee was the second domicilein the U.S., after Colorado, to have a captive law.

"But over the years Tennessee lost interest and discouragedformations," he added, noting there are about five licensedcaptives in Tennessee.

"We will replace the law with a cutting-edge law modeled onseveral other domiciles," Mr. Doherty said. "I drafted the bill,gave it to Julie, she submitted it to the governor, who decided tomake it part of his Legislative package. It's the number-one billthat's coming through her department as part of the legislativeprocess."

The bill was introduced in late February, he said, "and we thinkit has a good chance. It could be passed soon, or at the end of thesession, which will go until May or June."

Of the surrounding states that are captive domiciles, he said,"South Carolina has faltered and Kentucky has not really promotedcaptives like they thought they were going to. If Tennessee does itright, it could become the regional go-to domicile."