Memphis-based global fiber-based packaging, pulp and paper products leader International Paper has relocated its captive insurance company from Vermont to Tennessee, according to a statement from The Tennessee Department of Commerce & Insurance’s (TDCI) Captive Insurance Section.
International Paper has manufacturing operations in North America, Latin America, Europe, North Africa and Russia. It produces corrugated packaging products; pulp for diapers, tissue and other personal hygiene products; and paper. It employs more than 48,000 colleagues and serve more than 25,000 customers in 150 countries. Its net sales in 2019 were $22 billion.
“We have worked with the state for the past six years on our second captive and have a lot of confidence in the state as a fair and effective regulator. As a Memphis-based company, moving our captive to Tennessee will streamline administration and reduce operating costs,” said David Arick, International Paper Assistant Treasurer, Global Risk Management.
The arrival of International Paper’s captive insurance company represents Tennessee’s 700th risk-bearing captive insurance entity. Tennessee now has 211 standalone captives and 489 cell captives. Tennessee is currently ranked as the 7th largest captive domicile in the United States and 12th largest domicile in the world.
Tennessee modernized the state’s captive rules in 2011. Tennessee captives have written over $6.4 billion in premium and collected over $16 million in taxes and fees. The captive insurance sector has an estimated economic impact in Tennessee of $31 million in direct annual spending and employs more than 100 full-time professionals, TDCI said.
Captive insurance companies, which are regulated by TDCI, are formed primarily as a financing vehicle to self-insure the related or affiliated business risks of its owners. A risk-bearing entity is any formation type of a captive insurance company, including cell captives.
Source: Tennessee Department of Commerce & Insurance
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