The New York State insurance Department announced that a license has been issued to TSI Insurance Incorporated as a captive insurance company in the state. The new captive, previously incorporated by the Department, will be insuring the risks of Town Sports International (TSI).
NYSID Superintendent Gregory V. Serio explained that “After hearing of the difficulties TSI was having obtaining meaningful and affordable coverage at the Assembly public hearing on insurance affordability last October, the Department met with TSI to discuss other alternatives to the traditional insurance markets.”
He was pleased that the company chose to create a NY-based captive, and noted that “With the contraction of the commercial insurance market, the formations of captives is a valuable and more flexible option for companies in managing their insurance needs. Since 1997, New York’s businesses are no longer forced to look outside of the State to implement their risk management strategies.”
TSI operates a network of health and fitness clubs, the largest in the northeastern states, and third largest in the U.S. with membership totaling more than 340,000. It conducts business under four brand names: New York Sports Clubs, Washington Sports Clubs, Boston Sports Clubs and Philadelphia Sports Clubs. There are also three locations in Switzerland: two in Basel and one in Zurich.
TSI seemed equally pleased. with its new insurance company. CFO Richard Pyle commented, “We are delighted that the State Insurance Department has made the registration process so easy. In a difficult insurance market environment, enabling our company to enhance our risk management process, and supporting New York State at the same time becomes a win-win for TSI.”
The bulletin noted that “TSI is the fifth corporation to take advantage of legislation signed into law in August 1997 by Governor George E. Pataki that permits captives to become licensed in New York State. The law became effective December 5, 1997.” Legislation was introduced last March to broaden the scope of the regulations involving captive formation in the state “to allow a wider range of businesses the opportunity to utilize captive insurance companies.” The NYSID supports reintroducing the proposals in this year’s session “so New York’s businesses can be provided the necessary flexibility for their risk management.”
“By allowing corporations such as TSI to set up their insurance programs here, we are addressing the critical needs of business in New York, namely, cutting costs for corporations–who in the past had to maintain separate staff and offices in other jurisdictions. This is a win for New York State as well as our business community,” stated Serio.
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