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From YouTube: House Insurance Committee- March 2, 2021
Description
House Insurance Committee- March 2, 2021
A
A
B
A
B
Our
agenda
today
is
a
presentation
by
the
department
of
insurance
led
by
commissioner
carter
lawrence
we're
grateful
to
have
this
presentation
and
we
hope
that
it'll
enhance
our
and
the
members
baseline
understanding
of
insurance.
Some
of
us
need
it,
others,
don't
the
constant
concept
of
insurance
is
complex,
but
we
hope
to
understand
the
big
picture
and
get
a
good
view
on
the
department
and
the
industry
itself.
B
It
is
a
wide
industry
covering
the
fields
of
health,
property,
casualty,
finance,
etc,
and
we
hope
to
learn
again
about
the
industry
and
the
department.
We
are
pleased
to
have
the
top
authorities
in
our
state,
commissioner
and
assistant
commissioner
here
and
we'll
go
out
of
session
and
welcome
them
for
their.
C
Thank
you
so
much
chair,
and
also
vice
chair
and
the
entire
committee
for
the
invitation
to
be
here.
My
name
is
carter
lawrence.
I
am
the
commissioner
of
the
tennessee
department
of
commerce
and
insurance
and
again
very
happy
to
be
here
with
you
today.
Also
with
me
to
my
immediate
right
is
toby
compton,
who
is
deputy
commissioner
at
the
department
and
then
seated
at
the
other
table
first
bill
huddleston,
the
assistant
commissioner
for
insurance
and
then
patrick
merkel,
who
is
the
director
for
insurance?
C
I
do
also
want
to
note
we
have
a
few
of
our
other
staff
in
the
room
today,
alex
lewis,
who
is
our
assistant
commissioner
for
policy
and
legislation,
and
our
senior
advisor
jim
tracy
is
also
here
with
us
today,
and
I
also
see
david
combs
director
for
us
as
well.
So
again,
thank
you
so
much
for
the
opportunity
to
be
here
with
you
today
we
have
a
brief
presentation
and
an
accompanying
slide
deck,
which
I
will
get
started
with
for
us.
So
first
before
I
dive
in
a
little
bit
deeper
to
the
insurance
division.
C
I
did
just
want
to
mention
about
the
tennessee
department
of
commerce
insurance,
as
the
name
suggests.
We
have
multiple
functions,
not
just
insurance,
not
just
commerce.
We
actually
have
seven
distinct
divisions
from
insurance
regulatory
boards,
securities,
fire
prevention,
which
is
also
the
state
fire
marshal's
office,
the
tennessee
law
enforcement
training
academy
and
the
peace
officer,
standards,
training,
commission,
tenncare
oversight
and
finally,
administratively
attached
to
us
is
the
tennessee
emergency
communications
board,
which
is
commonly
known
as
e-911.
C
Also,
one
final
note:
before
moving
into
our
mission
vision,
values
of
those
seven
divisions,
we
have
a
total
of
828
positions,
612
of
those
are
full-time
and
the
remaining
part
time.
This
is
a
decrease
from
the
crest
in
2011
of
985
positions
in
the
years
since
we've
had
a
departure
of
three
sections
within
the
department,
fire
investigative
services,
consumer
affairs
and
the
tennessee
corrections
institute.
C
We
got
it
thanks.
Okay,
I
want
to
focus
a
little
bit
on
the
economic
impact
of
insurance
in
the
state
of
tennessee,
because
it
is
tough
to
understate
how
impactful
it
is
for
all
tennesseans
in
our
daily
lives.
So,
first
a
few
numbers
to
hit
since
2019
tennessee's
added
seven
new
insurance
companies,
so
the
assets
held
by
the
64
traditional
insurance
companies
that
are
domiciled
in
tennessee
are
nearly
100
billion
dollars.
You
can
see
on
the
screen.
C
They're
99.5
billion
and
over
45
billion
of
insurance
premiums
are
written
in
tennessee
each
year
by
the
1907
companies
that
are
licensed
in
tennessee.
So
that
puts
us
in
terms
of
premium
as
the
16th
largest
in
the
country
and
the
33rd
largest
in
the
world
which,
just
to
contextualize,
means
that
tennessee's
insurance
market
is
larger
than
the
country
of
mexico.
C
And
then
just
a
final
number
to
hit
on
is
that,
according
to
our
most
recent
survey,
there
are
more
than
50
000
tennesseans
that
are
employed
in
the
insurance
industry
in
tennessee,
move
into
the
insurance
division
and
talk
about
the
six
sections
that
make
up
the
insurance
division.
And
I
also
want
to
note
that,
while
I'm
running
through
this,
please
stop
me
at
any
time.
C
Finally,
the
captives
insurance
center
is
the
is
the
newest
of
our
sections,
and
captive
insurance
is
essentially
another
risk
mitigation
tool
that
allows
someone
to
own
their
own
risk
and,
as
of
january
of
this
year,
we
have
over.
We
have
well
now
over
720
risk
bearing
entities
in
tennessee.
212
of
those
are
pure
captives
and
they're
reigning
our
cells
and
we'll
talk
a
little
bit
more
about
captives
later
on
thanks.
C
C
Turning
next
to
pnc,
once
again,
our
authority
does
come
through
statute
and
regulations,
and
the
department
ensures
that
the
personal
lines
and
commercial
lines
of
insurance
policies
contain
the
required
provisions
and
offerings
specified
in
statute
and
regulation,
and
once
again,
we
contract
out
for
an
actuarial
firm
that
ultimately
makes
recommendation
to
us
and
finally,
life
again,
no
surprise.
Our
authority
comes
from
statute
and
regulation
and
actually
have
a
little
bit
of
a
typo.
We
do
not
use
an
actuarial
firm.
C
I
think
we
use
a
little
bit
too
much
control
paste
and
it
bled
over
into
this
one
as
well,
but
it's
only
forms
over
which
we
have
authority
here,
not
for
the
rates
themselves.
So
it's
not.
We
do
not
use
an
actuary
here
all
right.
Turning
next
to
our
captives,
section
that
I
highlighted
briefly
earlier
so
captives
have
been
a
rapidly
growing
part
of
the
risk
mitigation
tool.
In
fact,
according
to
our
most
recent
information
over
90
percent
of
fortune,
100
companies
are
either
have
or
are
exploring
captive
insurance
solutions.
C
Like
I
mentioned
earlier,
it
is
a
tool
for
mitigating
both
traditional,
such
as
pnc
and
liability,
and
also
non-traditional
risk.
So
pandemic
is
going
to
be
one
thing
that
we
expect
to
be
especially
important
in
the
captive
space
moving
forward,
so
captives
may
allow
for
better
control
and
consistency
when
procuring
tailored
insurance
products
to
meet
the
needs
of
businesses
that
traditional
markets
may
not
offer
or
may
have
hardened
and
become
more
expensive
in
recent
years.
C
I
want
to
highlight
the
achievement
that
we've
had
in
tennessee,
so
tennessee
has
been
recognized
as
a
top
domicile
and
the
number
is
beared
out.
We
are
seventh
in
the
united
states
and
we're
proud
to
say
that
we're
also
13th
nationally,
because,
unlike
most
other
sections
of
state
government,
we
are
directly
competing
not
just
against
other
states
but
against
the
bahamas
against
bermuda
and
many
other
foreign
domiciles,
where
captives
can
pick
up
and
leave
from
one
to
another.
C
So
I
mentioned
earlier,
we
have
720
licensed
risk
parent
entities
and
that's
212
for
pure
captives
and
508
cells.
So
you
can
see
the
numbers
broken
down
in
front
of
you.
That's
a
64
increase
since
just
2019
on
pure
captives
and
a
32
increase
since
2019
for
sales,
so
that
raises
a
little
bit
over
three
million
dollars
in
premium
taxes
and
fees
per
year.
C
C
So
it's
really
important
that
we
work
with
fellow
commissioners
and
with
our
other
jurisdictions
across
the
country
in
order
to
create
uniformity
that
creates
reliability
for
our
domiciles,
but
also
for
our
external
companies,
insurance
regulators,
establish
standards
and
best
practices.
We
conduct
peer
review
and
coordinate
regulatory
oversight
and,
like
I
mentioned
earlier
in
so
doing,
we
reduce
redundancy
and
repetitiveness,
which
is
not
only
a
saver
in
terms
of
paperwork
and
time,
but
ultimately
for
money
as
well
for
the
companies
which
is
able
to
be
passed
on
to
the
consumers.
C
C
So
thanks
to
the
naic
and
to
the
reaccreditation
department,
because
of
that
it
means
that
we
have
adequately
adequate
solvency
laws
and
regulations
to
protect
consumers
and
the
guarantee
fund
that
acts
as
a
backstop.
We
have
effective
and
efficient
financial
analysis
and
examination
processes,
appropriate
organizational
and
personnel
practices
and
last
effective
and
efficient
processes
regarding
the
review
of
organization,
licensing
and
change
of
control
of
domestic
insurers.
C
B
Thank
you,
mr
commissioner,
for
an
overall
view
as
rep
as
representatives
of
the
people,
the
most
common
question
we
get
of
insurance
is
that
I
haven't
had
an
accident.
I
haven't
had
a
claim
and
my
premiums
went
up.
20
percent,
it's
understandable
from
the
public
point
of
view,
and
we
do
also
understand
that
there
are
other
forces
involved,
such
as
the
risk
with
the
group
and
and
the
problems
that
they
have
faced
or
the
management
in
the
company.
But
they
also
believe
that
somehow
the
state
or
us,
or
especially
you
can't
control
those
interest
rates.
B
C
Certainly,
thank
you
chairman
for
the
question
and
I
will
hand
over
to
assistant
commissioner
bill
huddleston
to
talk
through
and
to
reference
the
specific
statute.
That
is
the
limitation
for
us,
but
broadly
like
we
talked
about
earlier.
We
have
the
authority,
that's
provided
to
us
by
statute
and
the
actuarial
firm
makes
a
recommendation
to
us
as
to
the
soundness
of
it,
and
we
have
to
accept
that
recommendation
and
bill.
Can
you
maybe
go
into
a
little
bit
more
of
the
specifics.
D
Bill
huddleston
assistant,
commissioner
for
insurance.
Thank
you,
mr
chairman
and
committee
for
your
time
this
morning.
That
is
a
good
question.
I
mean
it's
happened
to
me
before
too
I'm
sitting
there
with
a
increased
insurance
bill
that
I'm
going.
You
know
why,
but
I
do
think
it's
important
to
understand.
D
As
commissioner
said,
the
statutory
authority
is
that
we
review
those
actuary
review
the
rates
based
on
actuarial
opinion,
what
is
submitted
to
us,
and
we
have
our
own
contractor-
that
reviews
that
as
well.
The
purpose
of
that
is
for
solvency
in
the
greater
market
across
the
state
to
protect
consumers
so
that
companies
can
pay.
D
D
D
We
have
pretty
large
contracts
with
actuaries
that
are
outside
actuaries
between
pnc
and
health.
It's
about
three
and
a
half
million
dollars
over
the
next
five
years
in
our
contracts,
they're
pretty
expensive
contracts,
because
that
expertise
is
really
I
mean
it's.
It's
really
really
expensive
expertise
and
it's
really
hard
to
come
by.
D
B
E
So
when
you're,
looking
at
rate
changes,
you're
looking
at
a
broader
industry
and
and
the
loss
of
the
losses
total
based
on
all
of
the
all
of
the
people
that
are
insured
for
that
particular
company
or
that
industry,
so
it
is
a
spread
risk.
We
call
it,
but
yeah
I've
been
doing
it
for
32
years,
and
I
want
to
thank
you
all
because
you
all
have
been
very
helpful
to
me.
Anytime.
I've
called
anytime
I've
had
a
problem.
I
really
appreciate
it.
C
We
always
encourage
consumers
if
there's
any
sort
of
question
to
file
a
complaint
with
us,
and
we
have
a
great
complaint
process
and
the
mediation
process
that
I
talked
about
earlier,
that
we
can
circle
back
to
and
unless
patrick
who,
until
very
recently,
was
an
attorney
with
us
unless
he
is
going
to
correct
me
for
being
wrong,
which
does
happen
from
time
to
time.
I
don't
believe
that
a
non-compete
would
be
within
our
statutory
authority
for
anything
that
we
could
that
we
could
do.
C
That
said,
I
understand
issues
of
employment,
especially
given
what
we
talked
about
with
how
many
tennesseans
are
employed
by
the
insurance
industry,
that
a
profusion
of
non-competes
would
be
harmful
for
a
lot
of
tennesseans
in
the
industry.
So
if
it's
okay,
I'll
pause
there
and
just
make
sure
patrick,
if
I
stated
that
right,
that
would
not
be
within
our
authority.
A
F
Thank
you,
mr
chairman,
and
I
do
have
a
couple
of
questions
but
I'll
acknowledge
the
chair.
Welcome
it's
good
to
see
you,
commissioner,
and
congratulations
you're
doing
a
terrific
job
in
a
very
consequential
time.
You
just
mentioned
complaints
and
mediation
kind
of
walk
us
through,
particularly
on
the
health
side.
F
What
you
see
as
far
as
the
types
of
complaints
that
may
be
coming
in
from
consumers-
and
I
know
we
anticipate
many
of
those-
are
going
to
be
about
rates,
but
I
know
from
hearing
from
providers
many
times
I
hear
complaints
verbally
about
maybe
loopholes,
interpretation
of
law,
kind
of
walk
us
through.
Maybe
a
couple
of
complaints
that
you
hear
and
have
there
been
fines
that
have
been
levied?
You
know
what
kind
of
actionable
things
do.
F
C
Absolutely
yeah,
thank
you
so
much
so
I'll.
Let
bill
huddleston.
Our
assistant
commissioner
bill.
Hudson
talk
through
the
specifics.
I
do
want
to
take
the
opportunity
to
say
we
always
like
I
mentioned
earlier.
We
always
want
people
to
file
complaints
with
us
to
give
us
an
option,
the
opportunity
to
look
into
it,
so
that,
of
course,
is
consumers,
but
that's
also
providers,
and
when
I
spoke
to
the
tma
relatively
recently,
I
stress
that
to
them
that
providers
are
not
excluded
from
the
complaint
process
and
we
welcome.
C
In
fact,
we
encourage
complaints
to
be
filed
with
us
so
that
we
have
things
to
look
into
because
some
there
are
some
things
that
we
hear
about
from
time
to
time
about
when
they're
recriminations,
and
when
we
only
hear
rumors
about
it,
it
doesn't
allow
us
to
do
anything.
We
need
to
actually
have
the
complaint,
so
we
have
the
opportunity
to
ask
questions
and
to
look
into
it.
D
D
G
D
Broadly
speaking,
so
that's
the
landscape,
we're
looking
at,
I
think.
As
far
as
the
question
about
providers-
I
I
don't,
I
haven't
seen
anything
really
specific.
I
I
am
aware
that
there
are
rumors.
I
too
have
spoken
with
tma.
I
actually
was
on
the
phone
with
them
yesterday
and
we've
been
I've
participated
in
some
working
groups
with
them
that
I
think
have
been
really
productive
about
other
issues.
D
D
D
F
You're
recognized,
thank
you,
mr
chairman.
Thank
you
both
and,
and
I
appreciate
you
being
honest
and
forthcoming,
there
are
recriminations.
That's
one
of
the
probably
the
the
most
common
thing
that
I
hear
from
providers
is
having
a
fear
that
if
they,
if
they
bring
forward
a
complaint,
that
they
will
soon
be,
maybe
encouraged
to
find
another
network.
So
I
appreciate
but
a
follow-up
question
on
premiums
that
dr
kumar
brought
up
our
chairman.
F
You
know
all
throughout
the
year
of
2020
we
kept
hearing
about
the
delay
in
in
the
world
of
health
care
of
elective
procedures,
and
then
there
were
soon
headlines
to
follow
that
there
was
some
covet.
You
know
there
was
a
a
lot
of
cash
in
the
industry
because
of
delayed
care,
and
yet
my
next
door
neighbor,
whose
property
adjoins
mine,
is
a
small
business
owner.
He
employs
fewer
than
20
people.
F
He
had
not
one
single
significant
health
event
in
his
employment
and
yet
his
rates
went
up
almost
27,
and-
and
so
I
do
understand
and
I'll
be
happy
to
take
a
response.
But
you
know
just
understand
that
you
know
rate
increases
are,
are
understandable,
but
last
year
was
a
little
unique,
knowing
that
there
were
about
seven
months
of
delayed
care
that
was
put
off
to
this
year,
and
so,
if
you
want
to
speak
to
that,
I'd
be
glad
to
hear
it.
F
C
Yeah,
thank
you
so
much
for
the
question
and
I
I
to
return
to
something
you
mentioned
earlier
about
a
difference
between
profitability
and
solvency
absolutely
understand
and
our
role
as
the
regulator
is
not
to
ensure
profitability.
Our
role
is
to
ensure
solvency
to
make
sure
that
claims
are
paid
when
tennesseans
have
had
a
claim.
Experience
make
sure
that
happens.
C
So
we
are
aware
of
2020
and
of
the
plan
year
and
what
that
meant
for
a
delay
at
times
and
in
places
and
electives,
and
what
that
has
meant
for
the
overall
claims
experiences
for
insurance
companies.
We
also
know
that
to
use
the
cliche,
these
have
been
unprecedented
times
and
there's
been
difficulty
in
forecasting
into
the
future
as
to
what
claims
experiences
are
going
to
look
like
moving
forward.
C
D
Thanks,
commissioner,
the
the
thing
I
would
add
to
that
is
in
in
our
rate
filings.
We
do
see
some
detail
and
that
the
what
the
actuary
the
actuary
turns
a
memo
into
us
with
each
right
submission-
and
I
know
this
is
maybe
getting
in
the
weeds
a
little
bit
but
part
of
that
memo
is
them
outlining
present
present
dollar
benefits
versus
present
dollar
premium.
So
that's
how
they
try
to
measure
that
to
to
to
make
it
justifiable
to
make
it
reasonable.
D
So
that's
what
we
see-
and
I
I
don't
know
you
know
the
specifics
to
the
to
the
person
that
you
were
speaking
about,
but
I
do
know
that
in
a
lot
of
cases
too,
that
the
carrier
is
kind
of
pinned
into
that
80
medical
loss
ratio.
So
some
premiums
have
to
be
returned
to
some
to
some
policyholders
at
the
end
of
the
year.
So
that's
that's
one
thing
that
kind
of
limits
that
and
or
can
make
that
80
medical
loss
ratio
attainable.
D
F
We
are
aware,
most
of
us
that
we'll
see
a
very
significant
pharmacy
benefit
managers
reform
bill
come
through
this
legislative
session
and
for
the
record,
would
you
offer
testimony,
commissioner,
as
to
how
pharmacy
benefit
managers
are
treated
in
the
state
of
tennessee?
Are
they
viewed
as
an
insurance
entity?
Are
they
viewed
as
an
intermediary
of
an
insurance
entity
and
and
to
whom
do
they
owe
a
fiduci
fiduciary
response
again?
Thank
you,
mr
chairman,
for
your
industries.
May.
B
C
Yeah,
thank
you
chairman,
and
I
believe,
as
the
members
of
this
committee
know,
we
never
want
to
get
in
front
of
the
governor.
So
I
I
do
want
to
caveat
with
that.
As
to
the
specifics,
when
you
ask
about
the
fiduciary
and
some
of
the
other
requirements,
I
think
I
would
be
best
you
would
be
best
informed
if
I
turn
that
over
to
let
either
bill
or
patrick
speak
to
some
of
the
specifics
about
how
pbms
are
viewed
under
the
law
into
the
fiduciary
relationship.
D
A
B
Thank
you,
chairman
smith,
for
especially
reinforcing
the
most
common
questions.
We
are
asked
in
the
districts.
That
is
what
happened
to
my
premiums
and
why,
if
a
constituent
or
a
citizen
was
to
file
a
complaint,
I
assume
their
options
available
are
online
or
by
hotline.
In
how
much
time
can
the
expected
response
from
your
department.
C
Great
question
I'll:
let
bill
talk
through
that
and
actually
bill
if
you
would
walk
through
the
complaint
process
itself,
so
that
they
have
a
little
bit
more
information
to
talk
about
with
their
constituents.
But
I
do
want
to
be
clear:
we
we
absolutely
have
online
option
and
we
we
love
that
for
the
efficiency
that
it
provides,
but
we
also
know
that
not
all
of
our
all
tennesseans
either
want
to
or
can
use
internet
services.
So
we
certainly
do
have
a
phone
option,
that's
available
and
we're
constantly
putting
on
social
media
and
on
printed
materials.
C
D
D
D
D
You
know,
but
a
lot
more
times
than
not
it's
not
even
a
complaint
that
ends
up
getting
opened
up
a
lot
of
times
the
complainant,
through
speaking
with
the
people
on
staff,
kind
of
become
a
little
more
educated
and
find
out
that
they
might
not
have
a
valid
cause
against.
So
there
is
a
lot
of
education
in
that
process
and
a
lot
of
communication
between
that
we're
just
kind
of
in
the
middle
of
thank
you.
Thank
you.
E
Thank
you,
mr
chairman,
and
commissioner
and
your
team.
Thank
you
very
much.
We
talk
in
this
committee
that
insurance
does
not
have
a
lot
of
comedy
into
it,
but
you've
proven
there
is
by
bringing
jim
tracy
on
staff.
So
thank
you
very
much
for
that
that,
for
that
smile
that
you've
given
us,
we
appreciate
that
I
do
want
to
thank
you.
Steph,
graham
tudor's,
done
a
great
job,
helping
me
on
some
issues
most
recently.
I
really
appreciate
that.
E
If
I
could,
mr
chairman,
a
couple
of
questions,
I
want
to
go
down
further:
go
down
the
rabbit
hole
with
the
actuarial
firm
that
we
retain
what
is
the
push
and
pull
when
that
actual
fir
actual
aerial
firm
comes
back
with
their
recommendations.
I
think
I
heard
you
say,
commissioner,
that
we
have
to
accept
their
recommendations
or,
or
is
that,
is
there
push
and
pull
as
we're
talking
about
rates
going
back
and
forth
there.
Thank
you.
C
Yeah
and
thank
you
for
giving
me
the
opportunity
to
clarify,
because
I
did
miss
speak
when
I
said
that
we
just
have
to
accept
their
recommendations,
carte
blanche
and
also,
I
want
to
pause
real,
quick
and
say
thank
you
for
the
staff
comments
both
for
graham
then
also,
especially
for
jim
as
well.
We
are
thrilled
to
have
him
on
staff
and
he's
a
great
addition
to
the
team
to
the
actuarial
firm
into
the
contract.
C
Bill
spoke
about
some
of
the
numbers
themselves,
and
I
do
just
want
to
pause
real,
quick
to
mention
the
reason
why
we've
contracted
this
third
party,
rather
than
doing
it
in-house,
is
due
to
the
difficulty
in
being
able
to
hire
actuaries
to
the
state.
I
talked
earlier
about
the
neic
and
the
accreditation.
One
of
the
things
they
look
at
is
personnel,
and
they
look
at
your
ability
to
hire
to
retain
staff
actuaries
across
the
country
are
very
difficult
for
insurance
departments
to
be
able
to
hire.
C
C
We've
been
fortunate
to
be
able
to
work
with
a
specific
actuarial
firm
for
a
number
of
years
and
we
have
a
good
relationship
there
I'll
turn
it
back
over
to
bill
again
to
talk
through
both
for
that
firm
and
then
actually
to
the
question
about
how
we
work
within
code
for
accepting
the
recommendations
and
the
pushbacks
which
we
absolutely
do
have
where
we
say.
We
think
that
you
overvalued
this
particular
data
set
and
we
think
it
should
be
adjusted
differently.
But
if
it's
okay
bill
I'll,
let
you
take
those.
D
D
I
do
know
that
we
do
have
communications
with
them
and
that
we
we
there
are
instances
where
we
have
said,
no,
that
that's
too
much
it
that
seems
high.
Our
actuary
has
a
different
opinion
than
the
sub,
then
the
actuary
who's
from
the
carrier
who's
submitting
the
the
rate
filing.
So
we
do
have
those
discussions
there
have
been.
You
know
we
could.
I
don't
know
specifically.
There
have
been
issues,
for
instance,
with
long-term
care.
D
D
That's
created
solvency
issues
again
back
to
solvency.
I
know,
but
it's
created
an
industry
issue
that
we're
maybe
soon
not
even
going
to
have
a
long-term
care
product.
So
that's
what
could
that's?
Ultimately?
What
happens?
We
do
push
back
a
little
bit
in
terms
of
when
they
ask
for
rate
increases
over
certain
amounts.
We
ask
that
those
rate
increases
be
split
over
not
just
one
or
two
years,
but
two
or
three
years,
so
that
it's
not
all
at
once.
D
So
we
we
try
to
work
on
that,
to
make
it
a
little
bit
more
palatable
for
consumers,
and
we
do
we.
We
have
not,
like
I
said
some.
Some
states
you'll
see,
have
a
four
or
five
hundred
percent
rate
increase
and
we
never
ever
have
have
approved
anything
that
high
we've
never
even
been
in
triple
digits.
So
I
think
I
mean
those
are
some
important
just
from
our
from
our
day-to-day
and
how
we
handle
that.
E
Thank
you
if
I
could
follow
up
the
and
I'm
fortunate
I'm
looking
forward
to
sponsoring
the
insurance
modernization
act,
that
we've
got
going
through
the
the
legislative
process
and-
and
we
touched
on
the
captive
insurance
market-
that
that
is
burgeoning
in
tennessee.
Tell
me
a
little
bit
about
about
the
industry
itself
and
and
as
we're
looking
at
all
the
fortune.
500
companies
that
are
that
are
have
already
begun.
C
C
We
we
do
have
requirements,
as
do
the
other
jurisdictions,
about
a
meeting
to
occur
in
the
state
of
tennessee,
and
so
there
is
some
benefit
from
a
tourism
perspective,
and
we
have
seen
that
a
lot
of
our
in
captive
insurance
companies
domicile
in
the
state
of
tennessee,
also
using
local
captive
managers,
and
that's
what
has
led
to
some
of
the
job
creation
that
I
talked
about
earlier
with
the
100
jobs.
You
know
high
paying
jobs
that
have
been
created.
C
I
do
also
want
to
point
out
that
it's
not
just
the
fortune
500s
fortune
1000s
that
can
benefit
from
a
captive
insurance,
but
truly
it
can
owning
your
own
risk
can
be
an
appropriate
tool
for
all
sorts
of
firms
from
the
largest
to
a
smaller
but
a
more
complex
type
of
risk
that
they
have
to
understand
and
write
for
that.
Maybe
traditional
might
not
understand
or
be
able
to
write
as
well.
G
Thank
you,
mr
chairman.
After
all
that
talk
about
actuarials
and
everything,
this
question
is
going
to
seem
kind
of
elementary.
Probably,
I
was
curious,
though,
with
the
retail
environment,
shopping
costs
through
theft
and
other
things
I
was
curious.
Is
there
a
percentage
that
you
could
offer
us
that
we
pay
for
say
fraudulent
insurance
claims
and
or
events
there's
no
shortage
of
tv
commercials
and
billboards
out
there
saying
hey,
call
us
if
you've
been
hurt,
what
kind
of
cost
does
that
add
to
the
everyday
consumer
with
the
theft
and
the
quick
settlements?
C
D
D
A
I
I
regularly
ask
insurance:
why
is
it
one
of
those
that
doesn't
seem
to
follow
a
traditional
economic
process
and
that
it's
not
really
a
market
approach?
It's
really
more
of
a
risk-based
approach,
and
if
it's,
if
it
is
a
risk-based
approach
and
we're
going
to
allow
a
meaningful
percentage
of
businesses,
potentially
anybody
can
pull
out
and
begin
their
own
captive.
C
C
I
I
do
want
to
stress
that
it
may
be
another
tool
in
the
risk
management
risk
mitigation
toolbox
for
companies
it's
not
necessarily
appropriate
for
all,
but
for
those
who
have
a
specific
risk,
that's
hard
to
write
like
I
mentioned
it
can
be
as
far
as
tennessee
and
our
approach
to
captives,
we
do
want
to
make
sure
that
we're
not
just
going
to
say
yes
to
any
captive.
We
want
to
make
sure
that
they
are
financially
sound
and
as
to
the
specifics
of
the
capital
requirements.
I'd
let
bill
talk
about
those
we.
C
We
do
have
a
little
bit
of
difference
in
the
way
that
you're
approaching
for
a
captive
versus
a
traditional,
where
the
risk
of
insolvency
in
a
traditional
is
going
to
impact.
You
know
not
just
the
one
person
whose
claim
isn't
paid,
but
for
all
of
the
other
people
in
the
pool,
whereas
for
the
captive,
it
is
the
only
company
that
owns
its
risk,
so
the
risk
from
an
insolvency
and
a
captive
is
very
different
and
the
capital
requirements
it
might.
C
A
company
might
not
put
all
of
its
risk
management
into
a
captive,
but
one
particular
piece
of
it.
So
a
a
livery
company
might
put
one
component
of
its
livery
operations
into
the
captive
while
maintaining
traditional
insurance
for
the
other
pieces.
So
if
it's
okay,
if
I've,
hopefully
gotten
a
good
bite
of
that
I'll
turn
over
to
bill,
if
you
maybe
want
to
talk
about
some
of
the
capital
requirements
that
we
have.
Thank
you.
D
Thing
so
we
do
have
minimum
capital
requirements
for
for
a
captive
to
start
up.
There
are
several
different
types
of
captives
so
that
minimum
amount
can
be
different
right
now.
It's
you
know.
I
think
you
know,
on
a
for
a
protected
sel
for
a
small,
pure
captive,
it's
250,
250
000,
minimum
capital
requirements
additionally
to
those
minimum
capital
requirements.
You
know
we
look
at
each
captive
they're
all
different,
like
I
said
their
reserves
every
year.
D
They
do
have
to
have
back
to
the
actuaries
I
know,
but
they
have
to
file
they
have
to
con.
Even
though
it's
owned
risk
they
still
have
to
have
actuarial
opinion
on
if
they
have
proper
reserves.
So
that's
that's
another
important
thing
to
remember
and
then
the
one
other
thing
I
think,
commissioner,
you
know
talked
about
you
know
the
the
market.
D
A
Thank
you.
Thank
you
for
the
answer.
Yeah.
I
I
guess
the
one
that
I'm
seeing
a
lot
is
the
the
dramatic
increase
in
property
and
casualty,
and
people
are
deciding
that
it's
it's
actually
cheaper
for
them
to
to
begin
a
captive
than
to
pay
the
the
pretty
extreme
increases
in
property
and
casualties.
So
anyway,
I
appreciate
your
answer.
H
H
H
So
if
y'all,
you
guys
could
clarify
that,
but
secondarily
tennessee
is
becoming
a
leader
in
this
industry
and
if
we
don't
keep
up,
we
fall
behind
and
you
know
right
now.
There's
a
couple
of
northeastern
states-
they're,
probably
a
little
ahead
of
us,
but
we've
got
states
like
alabama
right
now
who
are
trying
to
get
in
the
ball
game
in
our
area
and
surpass
us.
H
So
with
that
being
said,
if
you
can
clarify
the
sales-
and
you
know
just
who
can
participate
in
the
captive
like
he
said
it's
p
and
c,
I
think
mostly
it
started
in
this
state
workers,
comp
and
now
with
the
health
industry.
You
know
it's
it's
going
gangbusters
in
health
insurance
in
this
state.
So
thank
you.
C
Yes,
thank
you
so
much
for
the
opportunity
to
emphasize
what
you
just
mentioned,
that
it's
not
just
the
fortune
500s
and
1000.
Like
I
said
earlier,
it
can
be
an
appropriate
tool
for
all
sorts
of
sized
entities
and
thanks
also
for
highlighting
the
cells,
we're
really
appreciative
of
the
cell
legislation
that
we
have.
That
gives
us
another
tool
to
be
able
to
provide.
Like
you
correctly
identified.
C
You
know
for
the
smaller
to
join
a
cell
rather
than
creating
a
pure
captive
and
having
the
capital
requirements
that
assistant
commissioner
hudson
was
talking
about
earlier,
and
the
cell
growth
has
been
phenomenal.
There
was
about
a
two
week
period
where
I
felt
that
every
single
day
I
was
signing
off
on
a
new
cell
application,
so
we're
really
proud
of
that
and
kind
of
more
broadly
to
what
you're
talking
about
about
maintaining
the
positive
work
that
has
happened
in
captives.
C
We're
really
appreciative
for
all
the
new
legislation
that
we've
been
able
to
get
on,
maybe
not
a
yearly
but
every
other
year
type
basis,
because,
like
you
noted
this
is
a
quickly
evolving
industry
and,
as
I
mentioned
earlier,
we
don't
just
compete
against
alabama
against
north
carolina
vermont,
but
we
compete
internationally
and
these
they
can
be
very
easily
redomiciled.
Any.
H
You're
recognized
yeah.
Thank
you,
mr
chairman,
and,
like
you
said,
you
know,
you
recognize
the
amount
of
time
that
each
one
of
these
is
coming
for
your
signature
each
day
and
as
this
grows,
if
your
department
is
not
structured
in
a
fashion
in
which
that
speed
can
happen,
if,
unfortunately,
the
guy
after
you
or
maybe
during
your
time,
it
starts
lagging,
you
know,
let's
make
sure
they
don't
go
somewhere
else.
So
you
know
that's
where
the
department's
got
to
understand
hey.
Maybe
our
processes
aren't
keeping
up
with
this
industry.
H
C
And
thank
you
and
we're.
We
are
proud
of
the
one
of
the
silver
linings
over
the
last
year
was
the
move
to
remote
work
and
to
e-signatures,
because
a
document
that
previously
could
have
taken
three
weeks
to
move
its
way
up
from
the
originating
desk.
All
the
way
up
to
the
commissioner's
desk
is
now
customarily
moving
forward
in
two
days,
because
there's
no
physical
walking
it
around
getting
stuck
under
a
pile,
there's,
a
lot
more
accountability
in
making
sure
that
documents
are
being
seen,
reviewed
and
signed
off
on
in
a
timely
manner.
C
So
this
is
th.
This
is
one
particular
area
that
has
benefited
immensely
from
the
e-signature
move
and
we're
proud
of
how
we've
been
able
to
adapt
to
that
and
they've
certainly
been
beneficiaries
in
the
industry,
and
thank
you
and
we're
absolutely
keeping
focused
on
maintaining
the
good
work
that
we've
done
and
carrying
it
forward.
B
B
Former
senator
tracy,
but
he
was
visiting
my
district,
that
borders
on
kentucky
and
we
had
made
some
water
arrangements
to
get
the
water
from
kentucky
for
the
original
use,
and
we
were
lamenting
some
of
us
for
lamenting
the
use
of
kentucky
water.
He
told
us
that
we
will
be
better
basketball
players.
I
was
in
the
audience.