FOR IMMEDIATE RELEASE
DEPARTMENT ANNOUNCES LICENSING OF TOWN SPORTS CAPTIVE
1997 Captive Law Encourages Corporations to Form Self-Insurance Entities
Superintendent of Insurance Gregory V. Serio today announced that the State Insurance Department has licensed TSI Insurance Incorporated as a captive insurance company in New York. The new captive, previously incorporated by the Department, will be insuring the risks of Town Sports International (TSI). Captive insurance companies are traditionally used by large corporations as a risk management strategy to insure their own risks.
"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. I am both pleased and gratified to announce that TSI has created a captive here in New York State," said Serio. "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 Yorks businesses are no longer forced to look outside of the State to implement their risk management strategies."
"We are delighted that the State Insurance Department has made the registration process so easy," said Richard Pyle, the Chief Financial Officer for TSI. "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."
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. In March of last year, under the leadership of Governor Pataki, legislation, S.6591, was introduced by the Department to allow a wider range of businesses the opportunity to utilize captive insurance companies. The Department is advocating for the legislation to be re-introduced and passed in this years Legislative Session so New Yorks 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," said Serio.
Prior to 1997, captives were not permitted in New York and had been headquartered in a small number of states or off-shore in jurisdictions such as Bermuda. These companies had avoided larger states like New York whose complex regulatory rules and lengthy approval procedures of the past had stymied innovative alternative insurance programs such as captives.
The Town Sports International (TSI) network of health and fitness clubs is the largest in the northeastern United States, and third largest in the US. Since 1974, the TSI network has grown to include more than 125 health and fitness facilities in four major metropolitan areas-New York, Washington, D.C., Boston and Philadelphia-with membership totaling more than 340,000. The TSI network includes clubs operating 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.
All the information necessary to become licensed as a captive is available by calling the Departments captive group toll-free at 1-866-NYSCAPTives or by visiting its Web site at www.nycaptives.com. Companies can quickly download the licensing forms as well as a copy of the law from the site. The approval process for licensing of a captive insurer is estimated to be only 30 days.
TSI Insurance Inc. joins New Yorks five other licensed captives, Moodys, the Metropolitan Transportation Authoritys First Mutual Transportation Assurance Co., Columbus-McKennon Inc.s CM Insurance Company, Inc., and GVP Risk Management Insurance Incorporated, which insured the risks of MasterCard International Incorporated, its affiliates and subsidiaries.