Gary Osborne, president of the USA Risk Group, says his company is seeing interest in Tennessee from companies based there thanks to a provision in the state's new captives law that could make a big difference for some companies.
"Basically," Osborne explains, "you can directly write workers' comp for your Tennessee-based risk—as opposed to being just self-insured, that can get you tax deductibility."
Also, by direct-writing, companies can potentially eliminate some collateral and "look at slightly better Tennessee taxes," Osborne adds.
So for the "large Tennessee corporations, it can be quite beneficial, either to form a branch captive, re-domesticate or start a new one," Osborne says.
He is aware of six or seven captive owners who are actively looking to re-domesticate to Tennessee.
Another client, he adds, is considering New Jersey, which adopted captive statutes this year and offers similar workers' comp benefits as Tennessee to organizations based in the state.
"I've said this for a long time: the regionalization of captives is getting more pronounced," Osborne says.
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