What's driving the charge, he said, is that his former colleague, Julie McPeak, has become commissioner of the Tennessee Department of Commerce and Insurance, taking office on Jan. 15. She was appointed by Governor-elect Bill Haslam.

Ms. McPeak previously served as an insurance regulatory attorney for Burr & Forman, LLP in Nashville, Tenn. She also served as the Executive Director of the Kentucky Office of Insurance (KOI).

In the 1970s, Mr. Doherty said Tennessee was the second domicile in the U.S., after Colorado, to have a captive law.

"But over the years Tennessee lost interest and discouraged formations," he added, noting there are about five licensed captives in Tennessee.

"We will replace the law with a cutting-edge law modeled on several other domiciles," Mr. Doherty said. "I drafted the bill, gave it to Julie, she submitted it to the governor, who decided to make it part of his Legislative package. It's the number-one bill that's coming through her department as part of the legislative process."

The bill was introduced in late February, he said, "and we think it has a good chance. It could be passed soon, or at the end of the session, which will go until May or June."

Of the surrounding states that are captive domiciles, he said, "South Carolina has faltered and Kentucky has not really promoted captives like they thought they were going to. If Tennessee does it right, it could become the regional go-to domicile."