Tenn. Code Ann. § 56-13-209 — TN Code / Title 56 / Chapter 13 / Section 56-13-209
Conversion, disaffiliation, or merger of protected cell - Conversion to protected cell captive insurance company
Status: in_force

(a) (1) Upon the application of a protected cell captive insurance company, one of its protected cells may be converted to any form of captive insurance company authorized pursuant to this chapter with the consent of the commissioner. Upon compliance with part 1 of this chapter, the commissioner may issue to the converting protected cell a certificate of authority with an effective date of its original date of formation as a protected cell. (2) If the converting protected cell is a series of a limited liability company, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable. The organizational documents shall include the date of formation as a series. Upon conversion, the formation date of the series shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor series. (3) If the converting protected cell is any other type of incorporated protected cell entity, then the converting protected cell shall submit amended organizational documents to the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable. (4) If the converting protected cell is neither a series of a limited liability company nor an incorporated protected cell, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter, titles 48 and 61 as applicable, or any other applicable provision governing formation of that type of entity. The organizational documents shall include the date of formation as a cell. Upon conversion, the formation date of the cell shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor cell. (b) A captive insurance company may apply to the commissioner for conversion to become a protected cell captive insurance company under any form permitted under this part. Upon compliance with this part, approval by the commissioner, and the filing of amended organizational documents with the secretary of state, the captive insurance company shall be issued a revised certificate of authority. The effective date of the revised protected cell captive insurance company's certificate of authority shall remain the same as the effective date of the prior captive insurance company. (c) With the consent of both the affected protected cell captive insurance companies and the commissioner, an individual protected cell of a captive insurance company may disaffiliate from one protected cell captive insurance company and affiliate with another protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cell to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that affiliates with another protected cell captive insurance company shall be the date of its original formation with the prior protected cell captive insurance company. A protected cell shall maintain and carry over all assets and liabilities, including outstanding insurance liabilities, to the new protected cell captive insurance company. (d) With the consent of the affected protected cell captive insurance company or companies, the owners or the participants of the protected cells, and the commissioner, an individual protected cell of a captive insurance company may merge or otherwise combine assets and liabilities with another individual protected cell of a protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cells to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that merges or otherwise combines assets and liabilities with another protected cell captive insurance company is the date of the original formation of the surviving protected cell. The surviving protected cell must acquire all of the assets and liabilities, including outstanding insurance liabilities, of the merging protected cell. A hearing is not required for mergers of protected cells effectuated under this section. (e) Solely for the purposes of §§ 56-13-108 , 56-13-109 , and 56-13-114 , the date of final conversion or disaffiliation of a protected cell shall be deemed a termination of that cell from the prior entity. The prior entity shall be responsible for the accounting, oversight, and premium tax on any transactions prior to the date of final conversion or disaffiliation. The successor entity shall be responsible for the accounting, oversight, and premium tax on any transactions on or after the date of final conversion or disaffiliation. Amended by 2019 Tenn. Acts, ch. 452,s 11, eff. 5/22/2019. Added by 2017 Tenn. Acts, ch. 354,s 5, eff. 5/11/2017.
(a) (1) Upon the application of a protected cell captive insurance company, one of its protected cells may be converted to any form of captive insurance company authorized pursuant to this chapter with the consent of the commissioner. Upon compliance with part 1 of this chapter, the commissioner may issue to the converting protected cell a certificate of authority with an effective date of its original date of formation as a protected cell. (2) If the converting protected cell is a series of a limited liability company, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable. The organizational documents shall include the date of formation as a series. Upon conversion, the formation date of the series shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor series. (3) If the converting protected cell is any other type of incorporated protected cell entity, then the converting protected cell shall submit amended organizational documents to the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable. (4) If the converting protected cell is neither a series of a limited liability company nor an incorporated protected cell, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter, titles 48 and 61 as applicable, or any other applicable provision governing formation of that type of entity. The organizational documents shall include the date of formation as a cell. Upon conversion, the formation date of the cell shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor cell.
(1) Upon the application of a protected cell captive insurance company, one of its protected cells may be converted to any form of captive insurance company authorized pursuant to this chapter with the consent of the commissioner. Upon compliance with part 1 of this chapter, the commissioner may issue to the converting protected cell a certificate of authority with an effective date of its original date of formation as a protected cell.
(2) If the converting protected cell is a series of a limited liability company, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable. The organizational documents shall include the date of formation as a series. Upon conversion, the formation date of the series shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor series.
(3) If the converting protected cell is any other type of incorporated protected cell entity, then the converting protected cell shall submit amended organizational documents to the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable.
(4) If the converting protected cell is neither a series of a limited liability company nor an incorporated protected cell, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter, titles 48 and 61 as applicable, or any other applicable provision governing formation of that type of entity. The organizational documents shall include the date of formation as a cell. Upon conversion, the formation date of the cell shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor cell.
(b) A captive insurance company may apply to the commissioner for conversion to become a protected cell captive insurance company under any form permitted under this part. Upon compliance with this part, approval by the commissioner, and the filing of amended organizational documents with the secretary of state, the captive insurance company shall be issued a revised certificate of authority. The effective date of the revised protected cell captive insurance company's certificate of authority shall remain the same as the effective date of the prior captive insurance company.
(c) With the consent of both the affected protected cell captive insurance companies and the commissioner, an individual protected cell of a captive insurance company may disaffiliate from one protected cell captive insurance company and affiliate with another protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cell to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that affiliates with another protected cell captive insurance company shall be the date of its original formation with the prior protected cell captive insurance company. A protected cell shall maintain and carry over all assets and liabilities, including outstanding insurance liabilities, to the new protected cell captive insurance company.
(d) With the consent of the affected protected cell captive insurance company or companies, the owners or the participants of the protected cells, and the commissioner, an individual protected cell of a captive insurance company may merge or otherwise combine assets and liabilities with another individual protected cell of a protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cells to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that merges or otherwise combines assets and liabilities with another protected cell captive insurance company is the date of the original formation of the surviving protected cell. The surviving protected cell must acquire all of the assets and liabilities, including outstanding insurance liabilities, of the merging protected cell. A hearing is not required for mergers of protected cells effectuated under this section.
(e) Solely for the purposes of §§ 56-13-108 , 56-13-109 , and 56-13-114 , the date of final conversion or disaffiliation of a protected cell shall be deemed a termination of that cell from the prior entity. The prior entity shall be responsible for the accounting, oversight, and premium tax on any transactions prior to the date of final conversion or disaffiliation. The successor entity shall be responsible for the accounting, oversight, and premium tax on any transactions on or after the date of final conversion or disaffiliation.
Amended by 2019 Tenn. Acts, ch. 452,s 11, eff. 5/22/2019.
Added by 2017 Tenn. Acts, ch. 354,s 5, eff. 5/11/2017.
Tenn. Code Ann. § 56-14-106 — TN Code / Title 56 / Chapter 14 / Section 56-14-106
Verified report of surplus lines insurance transactions - Procedure for effecting surplus lines contracts
Status: in_force

(a) On a quarterly basis, the surplus lines agent shall promptly file with the commissioner on or before February 15 for the quarter ending the preceding December 31, on or before May 15 for the quarter ending the preceding March 31, on or before August 15 for the quarter ending the preceding June 30, and on or before November 15 for the quarter ending the preceding September 30, on forms and in the manner prescribed by the commissioner, a verified report of all surplus lines insurance transactions during the preceding quarter placed, procured, or effected for, or on behalf of, an insured whose home state is this state, showing: (1) Aggregate gross premiums written; (2) Aggregate return premiums; (3) Amount of tax remitted to this state; and (4) Except for insurance placed or procured on behalf of an exempt commercial purchaser, a sworn statement by the agent with regard to the coverages described in the report that, to the best of the agent's knowledge and belief, the agent could not reasonably procure such coverages from an admitted insurer. (b) Within thirty (30) days of placing any new or renewal surplus lines contracts or endorsements to surplus lines contracts, the surplus lines agent shall make an affidavit for every new or renewed surplus lines insurance contract placed, procured, or effected for, or on behalf of, an insured whose home state is this state in the form prescribed by the commissioner. The affidavit shall be promptly filed with the commissioner or the commissioner's designee and shall include an affirmation that the agent is, after diligent effort, unable to procure from an admitted company or admitted companies the full amount of insurance required to protect the interest of the insured for each surplus lines insurance transaction except those procured or placed for exempt commercial purchasers. (c) Upon placing a new or renewed surplus lines insurance coverage, the surplus lines agent shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if the policy is not then available, a certificate, cover note or other confirmation of insurance. (d) No surplus lines agent shall deliver the document required by subsection (c), or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer, unless: (1) The agent has prior written authority from the insurer for the insurance; (2) The agent has received information from the insurer in the regular course of business that the insurance has been granted; or (3) An insurance policy providing the insurance actually has been issued by the insurer and delivered to the insured. (e) If, after the delivery of the document required by subsection (c), there is any change as to the identity of the insurers, or the proportion of the direct risk assumed by the insurer as stated in the original certificate, cover note or confirmation, or in any other material respect as to the insurance coverage evidenced by the document, the surplus lines agent shall promptly deliver to the insured a substitute certificate, cover note, confirmation or endorsement for the original document, accurately showing the current status of the coverage and the insurers responsible under the coverage. No such change shall result in a coverage or insurance contract that would be in violation of this part if originally issued on that basis. (f) If a policy issued by the insurer is not available upon placement of the insurance and the surplus lines agent has delivered a certificate, cover note, or confirmation upon request by the insured, the surplus lines agent shall as soon as reasonably possible procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the certificate, cover note or confirmation that was previously issued. Amended by 2015 Tenn. Acts, ch. 155,s 16, eff. 1/1/2016. Amended by 2015 Tenn. Acts, ch. 155,s 15, eff. 3/1/2016. Acts 1969, ch. 270, § 6; T.C.A., § 56-3806; Acts 2001, ch. 220, § 4; 2011, ch. 446, § 1.
(a) On a quarterly basis, the surplus lines agent shall promptly file with the commissioner on or before February 15 for the quarter ending the preceding December 31, on or before May 15 for the quarter ending the preceding March 31, on or before August 15 for the quarter ending the preceding June 30, and on or before November 15 for the quarter ending the preceding September 30, on forms and in the manner prescribed by the commissioner, a verified report of all surplus lines insurance transactions during the preceding quarter placed, procured, or effected for, or on behalf of, an insured whose home state is this state, showing: (1) Aggregate gross premiums written; (2) Aggregate return premiums; (3) Amount of tax remitted to this state; and (4) Except for insurance placed or procured on behalf of an exempt commercial purchaser, a sworn statement by the agent with regard to the coverages described in the report that, to the best of the agent's knowledge and belief, the agent could not reasonably procure such coverages from an admitted insurer.
(1) Aggregate gross premiums written;
(2) Aggregate return premiums;
(3) Amount of tax remitted to this state; and
(4) Except for insurance placed or procured on behalf of an exempt commercial purchaser, a sworn statement by the agent with regard to the coverages described in the report that, to the best of the agent's knowledge and belief, the agent could not reasonably procure such coverages from an admitted insurer.
(b) Within thirty (30) days of placing any new or renewal surplus lines contracts or endorsements to surplus lines contracts, the surplus lines agent shall make an affidavit for every new or renewed surplus lines insurance contract placed, procured, or effected for, or on behalf of, an insured whose home state is this state in the form prescribed by the commissioner. The affidavit shall be promptly filed with the commissioner or the commissioner's designee and shall include an affirmation that the agent is, after diligent effort, unable to procure from an admitted company or admitted companies the full amount of insurance required to protect the interest of the insured for each surplus lines insurance transaction except those procured or placed for exempt commercial purchasers.
(c) Upon placing a new or renewed surplus lines insurance coverage, the surplus lines agent shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if the policy is not then available, a certificate, cover note or other confirmation of insurance.
(d) No surplus lines agent shall deliver the document required by subsection (c), or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer, unless: (1) The agent has prior written authority from the insurer for the insurance; (2) The agent has received information from the insurer in the regular course of business that the insurance has been granted; or (3) An insurance policy providing the insurance actually has been issued by the insurer and delivered to the insured.
(1) The agent has prior written authority from the insurer for the insurance;
(2) The agent has received information from the insurer in the regular course of business that the insurance has been granted; or
(3) An insurance policy providing the insurance actually has been issued by the insurer and delivered to the insured.
(e) If, after the delivery of the document required by subsection (c), there is any change as to the identity of the insurers, or the proportion of the direct risk assumed by the insurer as stated in the original certificate, cover note or confirmation, or in any other material respect as to the insurance coverage evidenced by the document, the surplus lines agent shall promptly deliver to the insured a substitute certificate, cover note, confirmation or endorsement for the original document, accurately showing the current status of the coverage and the insurers responsible under the coverage. No such change shall result in a coverage or insurance contract that would be in violation of this part if originally issued on that basis.
(f) If a policy issued by the insurer is not available upon placement of the insurance and the surplus lines agent has delivered a certificate, cover note, or confirmation upon request by the insured, the surplus lines agent shall as soon as reasonably possible procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the certificate, cover note or confirmation that was previously issued.
Amended by 2015 Tenn. Acts, ch. 155,s 16, eff. 1/1/2016.
Amended by 2015 Tenn. Acts, ch. 155,s 15, eff. 3/1/2016.
Acts 1969, ch. 270, § 6; T.C.A., § 56-3806; Acts 2001, ch. 220, § 4; 2011, ch. 446, § 1.
Tenn. Code Ann. § 56-24-104 — TN Code / Title 56 / Chapter 24 / Section 56-24-104
Fees to be paid state
Status: in_force

The commissioner shall collect and pay into the state treasury the fees prescribed by § 56-4-101 for issuing each new certificate of authority, for filing the company's annual statement and for amendments to the company's certificate of authority. Acts 1897, ch. 127, § 15; Shan., § 3350a15; Code 1932, § 6232; Acts 1979, ch. 298, § 5; T.C.A. (orig. ed.), § 56-2324.
The commissioner shall collect and pay into the state treasury the fees prescribed by § 56-4-101 for issuing each new certificate of authority, for filing the company's annual statement and for amendments to the company's certificate of authority.
Acts 1897, ch. 127, § 15; Shan., § 3350a15; Code 1932, § 6232; Acts 1979, ch. 298, § 5; T.C.A. (orig. ed.), § 56-2324.
Tenn. Code Ann. § 56-9-103 — TN Code / Title 56 / Chapter 9 / Section 56-9-103
Chapter definitions
Status: in_force

As used in this chapter, unless the context otherwise requires: (1) "Ancillary state" means any state other than a domiciliary state; (2) "Commissioner" means the commissioner of commerce and insurance; (3) "Creditor" is a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed or contingent; (4) "Delinquency proceeding" means any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing or conserving the insurer, and any summary proceeding under § 56-9-201 ; (5) "Doing business" includes any of the following acts, whether effected by mail or otherwise: (A) The issuance or delivery of contracts of insurance to persons resident in this state; (B) The solicitation of applications for the contracts, or other negotiations preliminary to the execution of the contracts; (C) The collection of premiums, membership fees, assessments or other consideration for the contracts; (D) The transaction of matters subsequent to execution of the contracts and arising out of them; or (E) Operating under a license or certificate of authority, as an insurer, issued by the department of commerce and insurance; (6) "Domiciliary state" means the state in which an insurer is incorporated or organized, or, in the case of an alien insurer, its state of entry; (7) "Fair consideration" is given for property or an obligation: (A) When in exchange for the property or obligation, as a fair equivalent therefor, and in good faith, property is conveyed or services are rendered or an obligation is incurred or an antecedent debt is satisfied; or (B) When the property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation obtained; (8) "Federal home loan bank" means an institution chartered under the Federal Home Loan Bank Act ( 12 U.S.C. § 1421 , et seq.), as amended, or its successor statute; (9) "Foreign country" means any other jurisdiction not in any state; (10) "Foreign guaranty association" means any entities similar to a guaranty association now in existence in or hereafter created by the legislature of any other state; (11) "Formal delinquency proceeding" means any liquidation or rehabilitation proceeding; (12) "General assets" means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, "general assets" includes all the property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders or all policyholders and creditors, in more than a single state, shall be treated as general assets; (13) "Guaranty association" means the Tennessee insurance guaranty association created by chapter 12, part 1 of this title, the life and health insurance guaranty association created by chapter 12, part 2 of this title, and any other similar entity now or hereafter created by the general assembly of this state for the payment of claims of insolvent insurers; (14) "Insolvency" or "insolvent" means: (A) For an insurer issuing only assessable fire insurance policies: (i) The inability to pay any obligation within thirty (30) days after it becomes payable; or (ii) If an assessment is made within thirty (30) days after the date, the inability to pay the obligation thirty (30) days following the date specified in the first assessment notice issued after the date of loss pursuant to § 56-20-106 ; (B) For any other insurer, that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities, plus the greater of: (i) Any capital and surplus required by law for its organization; or (ii) The total par or stated value of its authorized and issued capital stock; (C) As to any insurer licensed to do business in this state as of July 1, 1991, that does not meet the standard established under subdivision (14)(B), "insolvency" or "insolvent" means, for a period not to exceed three (3) years from July 1, 1991, that it is unable to pay its obligations when they are due or that its admitted assets do not exceed its liabilities, plus any required capital contribution ordered by the commissioner under the insurance law; and (D) For purposes of this subdivision (14), "liabilities" include, but are not limited to, reserves required by statute or by department general regulations or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto; (15) "Insurer" means any person who has done, purports to do, is doing or is licensed to do an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision, or conservation by, any insurance commissioner. For purposes of this chapter, any other persons included under § 56-9-102 are deemed to be insurers; (16) "Netting agreement" means: (A) A contract or agreement, including terms and conditions incorporated by reference in it, including a master agreement, which master agreement, together with all schedules, confirmations, definitions, and addenda to it and transactions under any of them, shall be treated as one (1) netting agreement, that documents one (1) or more transactions between the parties to the agreement for or involving one (1) or more qualified financial contracts and that provides for the netting, liquidation, setoff, termination, acceleration, or close-out, under or in connection with one (1) or more qualified financial contracts or present or future payment or delivery obligations or payment or delivery entitlements under one (1) or more qualified financial contracts, including liquidation or close-out values relating to those obligations or entitlements, among the parties to the netting agreement; (B) Any master agreement or bridge agreement for one (1) or more master agreements described in subdivision (16)(A); or (C) Any security agreement or arrangement or other credit enhancement or guarantee or reimbursement obligation related to any contract or agreement described in subdivision (16)(A) or (16)(B); provided, that any contract or agreement described in subdivision (16)(A) or (16)(B) relating to agreements or transactions that are not qualified financial contracts shall be deemed to be a netting agreement only with respect to those agreements or transactions that are qualified financial contracts; (17) "Preferred claim" means any claim with respect to which the terms of this chapter accord priority of payment from the general assets of the insurer; (18) (A) "Qualified financial contract" means any commodity contract, forward contract, repurchase agreement, securities contract, swap agreement, and any similar agreement that the commissioner determines to be a qualified financial contract for the purposes of this chapter; provided, that the insurer entered into such contract or agreement in accordance with: (i) Section 56-3-303(a)(21) ; and (ii) The insurer's derivative instruments use plan that has been approved by the commissioner pursuant to § 56-3-303(a)(21) ; (B) As used in subdivision (18)(A), "commodity contract" means: (i) A contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the Commodity Exchange Act ( 7 U.S.C. § 1 et seq.), or a board of trade outside the United States; (ii) An agreement that is subject to regulation under § 23 of the Commodity Exchange Act ( 7 U.S.C. § 23 ), as amended from time to time, and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract; (iii) An agreement or transaction that is subject to regulation under § 6c(b) of the Commodity Exchange Act ( 7 U.S.C. § 6c(b) ), as amended from time to time, and that is commonly known to the commodities trade as a commodity option; (iv) Any combination of the agreements or transactions referred to in this subdivision (18)(B); or (v) Any option to enter into an agreement or transaction referred to in this subdivision (18)(B); (C) As used in subdivision (18)(A), "forward contract," "repurchase agreement," "securities contract," and "swap agreement" have the meanings set forth in the Federal Deposit Insurance Act ( 12 U.S.C. § 1821(e)(8)(D) ), as amended from time to time; (19) "Receiver" means receiver, liquidator, rehabilitator or conservator as the context requires; (20) "Reciprocal state" means any state other than this state in which in substance and effect §§ 56-9-307(a) , 56-9-404 , 56-9-405 and 56-9-407 - 56-9-409 are in force, and in which provisions are in force requiring that the commissioner or equivalent official be the receiver of a delinquent insurer, and in which some provision exists for the avoidance of fraudulent conveyances and preferential transfers; (21) (A) "Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets. (B) "Secured claim" also includes claims that have become liens upon specific assets by reason of judicial process; (22) "Special deposit claim" means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by general assets; (23) "State" means any state, district or territory of the United States and the Panama Canal Zone; and (24) "Transfer" includes the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein, or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by the debtor. Amended by 2019 Tenn. Acts, ch. 430,s 1, eff. 5/21/2019. Acts 1991, ch. 142, § 4; 2012, ch. 540, § 1.
As used in this chapter, unless the context otherwise requires:
(1) "Ancillary state" means any state other than a domiciliary state;
(2) "Commissioner" means the commissioner of commerce and insurance;
(3) "Creditor" is a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed or contingent;
(4) "Delinquency proceeding" means any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing or conserving the insurer, and any summary proceeding under § 56-9-201 ;
(5) "Doing business" includes any of the following acts, whether effected by mail or otherwise: (A) The issuance or delivery of contracts of insurance to persons resident in this state; (B) The solicitation of applications for the contracts, or other negotiations preliminary to the execution of the contracts; (C) The collection of premiums, membership fees, assessments or other consideration for the contracts; (D) The transaction of matters subsequent to execution of the contracts and arising out of them; or (E) Operating under a license or certificate of authority, as an insurer, issued by the department of commerce and insurance;
(A) The issuance or delivery of contracts of insurance to persons resident in this state;
(B) The solicitation of applications for the contracts, or other negotiations preliminary to the execution of the contracts;
(C) The collection of premiums, membership fees, assessments or other consideration for the contracts;
(D) The transaction of matters subsequent to execution of the contracts and arising out of them; or
(E) Operating under a license or certificate of authority, as an insurer, issued by the department of commerce and insurance;
(6) "Domiciliary state" means the state in which an insurer is incorporated or organized, or, in the case of an alien insurer, its state of entry;
(7) "Fair consideration" is given for property or an obligation: (A) When in exchange for the property or obligation, as a fair equivalent therefor, and in good faith, property is conveyed or services are rendered or an obligation is incurred or an antecedent debt is satisfied; or (B) When the property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation obtained;
(A) When in exchange for the property or obligation, as a fair equivalent therefor, and in good faith, property is conveyed or services are rendered or an obligation is incurred or an antecedent debt is satisfied; or
(B) When the property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation obtained;
(8) "Federal home loan bank" means an institution chartered under the Federal Home Loan Bank Act ( 12 U.S.C. § 1421 , et seq.), as amended, or its successor statute;
(9) "Foreign country" means any other jurisdiction not in any state;
(10) "Foreign guaranty association" means any entities similar to a guaranty association now in existence in or hereafter created by the legislature of any other state;
(11) "Formal delinquency proceeding" means any liquidation or rehabilitation proceeding;
(12) "General assets" means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, "general assets" includes all the property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders or all policyholders and creditors, in more than a single state, shall be treated as general assets;
(13) "Guaranty association" means the Tennessee insurance guaranty association created by chapter 12, part 1 of this title, the life and health insurance guaranty association created by chapter 12, part 2 of this title, and any other similar entity now or hereafter created by the general assembly of this state for the payment of claims of insolvent insurers;
(14) "Insolvency" or "insolvent" means: (A) For an insurer issuing only assessable fire insurance policies: (i) The inability to pay any obligation within thirty (30) days after it becomes payable; or (ii) If an assessment is made within thirty (30) days after the date, the inability to pay the obligation thirty (30) days following the date specified in the first assessment notice issued after the date of loss pursuant to § 56-20-106 ; (B) For any other insurer, that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities, plus the greater of: (i) Any capital and surplus required by law for its organization; or (ii) The total par or stated value of its authorized and issued capital stock; (C) As to any insurer licensed to do business in this state as of July 1, 1991, that does not meet the standard established under subdivision (14)(B), "insolvency" or "insolvent" means, for a period not to exceed three (3) years from July 1, 1991, that it is unable to pay its obligations when they are due or that its admitted assets do not exceed its liabilities, plus any required capital contribution ordered by the commissioner under the insurance law; and (D) For purposes of this subdivision (14), "liabilities" include, but are not limited to, reserves required by statute or by department general regulations or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto;
(A) For an insurer issuing only assessable fire insurance policies: (i) The inability to pay any obligation within thirty (30) days after it becomes payable; or (ii) If an assessment is made within thirty (30) days after the date, the inability to pay the obligation thirty (30) days following the date specified in the first assessment notice issued after the date of loss pursuant to § 56-20-106 ;
(i) The inability to pay any obligation within thirty (30) days after it becomes payable; or
(ii) If an assessment is made within thirty (30) days after the date, the inability to pay the obligation thirty (30) days following the date specified in the first assessment notice issued after the date of loss pursuant to § 56-20-106 ;
(B) For any other insurer, that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities, plus the greater of: (i) Any capital and surplus required by law for its organization; or (ii) The total par or stated value of its authorized and issued capital stock;
(i) Any capital and surplus required by law for its organization; or
(ii) The total par or stated value of its authorized and issued capital stock;
(C) As to any insurer licensed to do business in this state as of July 1, 1991, that does not meet the standard established under subdivision (14)(B), "insolvency" or "insolvent" means, for a period not to exceed three (3) years from July 1, 1991, that it is unable to pay its obligations when they are due or that its admitted assets do not exceed its liabilities, plus any required capital contribution ordered by the commissioner under the insurance law; and
(D) For purposes of this subdivision (14), "liabilities" include, but are not limited to, reserves required by statute or by department general regulations or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto;
(15) "Insurer" means any person who has done, purports to do, is doing or is licensed to do an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision, or conservation by, any insurance commissioner. For purposes of this chapter, any other persons included under § 56-9-102 are deemed to be insurers;
(16) "Netting agreement" means: (A) A contract or agreement, including terms and conditions incorporated by reference in it, including a master agreement, which master agreement, together with all schedules, confirmations, definitions, and addenda to it and transactions under any of them, shall be treated as one (1) netting agreement, that documents one (1) or more transactions between the parties to the agreement for or involving one (1) or more qualified financial contracts and that provides for the netting, liquidation, setoff, termination, acceleration, or close-out, under or in connection with one (1) or more qualified financial contracts or present or future payment or delivery obligations or payment or delivery entitlements under one (1) or more qualified financial contracts, including liquidation or close-out values relating to those obligations or entitlements, among the parties to the netting agreement; (B) Any master agreement or bridge agreement for one (1) or more master agreements described in subdivision (16)(A); or (C) Any security agreement or arrangement or other credit enhancement or guarantee or reimbursement obligation related to any contract or agreement described in subdivision (16)(A) or (16)(B); provided, that any contract or agreement described in subdivision (16)(A) or (16)(B) relating to agreements or transactions that are not qualified financial contracts shall be deemed to be a netting agreement only with respect to those agreements or transactions that are qualified financial contracts;
(A) A contract or agreement, including terms and conditions incorporated by reference in it, including a master agreement, which master agreement, together with all schedules, confirmations, definitions, and addenda to it and transactions under any of them, shall be treated as one (1) netting agreement, that documents one (1) or more transactions between the parties to the agreement for or involving one (1) or more qualified financial contracts and that provides for the netting, liquidation, setoff, termination, acceleration, or close-out, under or in connection with one (1) or more qualified financial contracts or present or future payment or delivery obligations or payment or delivery entitlements under one (1) or more qualified financial contracts, including liquidation or close-out values relating to those obligations or entitlements, among the parties to the netting agreement;
(B) Any master agreement or bridge agreement for one (1) or more master agreements described in subdivision (16)(A); or
(C) Any security agreement or arrangement or other credit enhancement or guarantee or reimbursement obligation related to any contract or agreement described in subdivision (16)(A) or (16)(B); provided, that any contract or agreement described in subdivision (16)(A) or (16)(B) relating to agreements or transactions that are not qualified financial contracts shall be deemed to be a netting agreement only with respect to those agreements or transactions that are qualified financial contracts;
(17) "Preferred claim" means any claim with respect to which the terms of this chapter accord priority of payment from the general assets of the insurer;
(18) (A) "Qualified financial contract" means any commodity contract, forward contract, repurchase agreement, securities contract, swap agreement, and any similar agreement that the commissioner determines to be a qualified financial contract for the purposes of this chapter; provided, that the insurer entered into such contract or agreement in accordance with: (i) Section 56-3-303(a)(21) ; and (ii) The insurer's derivative instruments use plan that has been approved by the commissioner pursuant to § 56-3-303(a)(21) ; (B) As used in subdivision (18)(A), "commodity contract" means: (i) A contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the Commodity Exchange Act ( 7 U.S.C. § 1 et seq.), or a board of trade outside the United States; (ii) An agreement that is subject to regulation under § 23 of the Commodity Exchange Act ( 7 U.S.C. § 23 ), as amended from time to time, and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract; (iii) An agreement or transaction that is subject to regulation under § 6c(b) of the Commodity Exchange Act ( 7 U.S.C. § 6c(b) ), as amended from time to time, and that is commonly known to the commodities trade as a commodity option; (iv) Any combination of the agreements or transactions referred to in this subdivision (18)(B); or (v) Any option to enter into an agreement or transaction referred to in this subdivision (18)(B); (C) As used in subdivision (18)(A), "forward contract," "repurchase agreement," "securities contract," and "swap agreement" have the meanings set forth in the Federal Deposit Insurance Act ( 12 U.S.C. § 1821(e)(8)(D) ), as amended from time to time;
(A) "Qualified financial contract" means any commodity contract, forward contract, repurchase agreement, securities contract, swap agreement, and any similar agreement that the commissioner determines to be a qualified financial contract for the purposes of this chapter; provided, that the insurer entered into such contract or agreement in accordance with: (i) Section 56-3-303(a)(21) ; and (ii) The insurer's derivative instruments use plan that has been approved by the commissioner pursuant to § 56-3-303(a)(21) ;
(i) Section 56-3-303(a)(21) ; and
(ii) The insurer's derivative instruments use plan that has been approved by the commissioner pursuant to § 56-3-303(a)(21) ;
(B) As used in subdivision (18)(A), "commodity contract" means: (i) A contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the Commodity Exchange Act ( 7 U.S.C. § 1 et seq.), or a board of trade outside the United States; (ii) An agreement that is subject to regulation under § 23 of the Commodity Exchange Act ( 7 U.S.C. § 23 ), as amended from time to time, and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract; (iii) An agreement or transaction that is subject to regulation under § 6c(b) of the Commodity Exchange Act ( 7 U.S.C. § 6c(b) ), as amended from time to time, and that is commonly known to the commodities trade as a commodity option; (iv) Any combination of the agreements or transactions referred to in this subdivision (18)(B); or (v) Any option to enter into an agreement or transaction referred to in this subdivision (18)(B);
(i) A contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the Commodity Exchange Act ( 7 U.S.C. § 1 et seq.), or a board of trade outside the United States;
(ii) An agreement that is subject to regulation under § 23 of the Commodity Exchange Act ( 7 U.S.C. § 23 ), as amended from time to time, and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract;
(iii) An agreement or transaction that is subject to regulation under § 6c(b) of the Commodity Exchange Act ( 7 U.S.C. § 6c(b) ), as amended from time to time, and that is commonly known to the commodities trade as a commodity option;
(iv) Any combination of the agreements or transactions referred to in this subdivision (18)(B); or
(v) Any option to enter into an agreement or transaction referred to in this subdivision (18)(B);
(C) As used in subdivision (18)(A), "forward contract," "repurchase agreement," "securities contract," and "swap agreement" have the meanings set forth in the Federal Deposit Insurance Act ( 12 U.S.C. § 1821(e)(8)(D) ), as amended from time to time;
(19) "Receiver" means receiver, liquidator, rehabilitator or conservator as the context requires;
(20) "Reciprocal state" means any state other than this state in which in substance and effect §§ 56-9-307(a) , 56-9-404 , 56-9-405 and 56-9-407 - 56-9-409 are in force, and in which provisions are in force requiring that the commissioner or equivalent official be the receiver of a delinquent insurer, and in which some provision exists for the avoidance of fraudulent conveyances and preferential transfers;
(21) (A) "Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets. (B) "Secured claim" also includes claims that have become liens upon specific assets by reason of judicial process;
(A) "Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets.
(B) "Secured claim" also includes claims that have become liens upon specific assets by reason of judicial process;
(22) "Special deposit claim" means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by general assets;
(23) "State" means any state, district or territory of the United States and the Panama Canal Zone; and
(24) "Transfer" includes the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein, or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by the debtor.
Amended by 2019 Tenn. Acts, ch. 430,s 1, eff. 5/21/2019.
Acts 1991, ch. 142, § 4; 2012, ch. 540, § 1.
Tenn. Code Ann. § 56-7-3112 — TN Code / Title 56 / Chapter 7 / Section 56-7-3112
Fair Disclosure of State Funded Payments for Pharmacists' Services Act
Status: in_force

(a) This section shall be known and may be cited as the "Fair Disclosure of State Funded Payments for Pharmacists' Services Act". (b) As used in this section: (1) "Pharmacist" means a pharmacist as defined in § 63-10-204 ; (2) "Pharmacist services" means products, goods, or services provided as a part of the practice of pharmacy as defined in § 63-10-204 to individuals who reside or are employed in this state; (3) "Pharmacy" means the same as defined in § 63-10-204 ; (4) "Pharmacy benefits manager" or "PBM" means an entity that administers or manages a pharmacy benefits plan or program; and (5) "Pharmacy benefits plan or program" means any plan or program that is funded by state dollars to furnish, cover the cost of, or otherwise provide for pharmacist services to individuals who reside or are employed in this state. (c) A PBM, when seeking payment or reimbursement for pharmacist services provided in connection with a pharmacy benefits plan or program or reporting expenditures for pharmacist services provided in connection with a pharmacy benefits plan or program, shall itemize by individual claim: (1) The amount actually paid or to be paid to the pharmacy or pharmacist for the pharmacist services; (2) The identity of the pharmacy or pharmacist actually paid or to be paid; and (3) The prescription number or other identifier of the pharmacist services. (d) A PBM shall pay the amounts it receives for pharmacist services provided in connection with a pharmacy benefits plan or program to the pharmacies or pharmacists that provided the pharmacist services. (e) This section does not: (1) Require a PBM to set specific fees, rates, or schedules for payment for pharmacist services; (2) Prohibit a PBM from charging for any services in addition to pharmacist services; or (3) Require a PBM to pay a pharmacy or pharmacist more on any claim than the amount disclosed under subdivision (c)(1). (f) A violation of this section is an unfair trade practice under the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title. (g) All documents containing individual claim and payment information specified in subsections (c) and (d) shall be confidential records and not subject to the requirements of title 10, chapter 7, relating to public inspection of records. (h) A state agency administering a PBM contract may provide the information described in subsections (c) and (d) to a qualified independent auditor in accordance with § 4-3-1021 ; provided, the information is relevant to an audit authorized under § 4-3-1021 , and the independent auditor has agreed to maintain the confidentiality of the information. Acts 2014, ch. 896, § 1.
(a) This section shall be known and may be cited as the "Fair Disclosure of State Funded Payments for Pharmacists' Services Act".
(b) As used in this section: (1) "Pharmacist" means a pharmacist as defined in § 63-10-204 ; (2) "Pharmacist services" means products, goods, or services provided as a part of the practice of pharmacy as defined in § 63-10-204 to individuals who reside or are employed in this state; (3) "Pharmacy" means the same as defined in § 63-10-204 ; (4) "Pharmacy benefits manager" or "PBM" means an entity that administers or manages a pharmacy benefits plan or program; and (5) "Pharmacy benefits plan or program" means any plan or program that is funded by state dollars to furnish, cover the cost of, or otherwise provide for pharmacist services to individuals who reside or are employed in this state.
(1) "Pharmacist" means a pharmacist as defined in § 63-10-204 ;
(2) "Pharmacist services" means products, goods, or services provided as a part of the practice of pharmacy as defined in § 63-10-204 to individuals who reside or are employed in this state;
(3) "Pharmacy" means the same as defined in § 63-10-204 ;
(4) "Pharmacy benefits manager" or "PBM" means an entity that administers or manages a pharmacy benefits plan or program; and
(5) "Pharmacy benefits plan or program" means any plan or program that is funded by state dollars to furnish, cover the cost of, or otherwise provide for pharmacist services to individuals who reside or are employed in this state.
(c) A PBM, when seeking payment or reimbursement for pharmacist services provided in connection with a pharmacy benefits plan or program or reporting expenditures for pharmacist services provided in connection with a pharmacy benefits plan or program, shall itemize by individual claim: (1) The amount actually paid or to be paid to the pharmacy or pharmacist for the pharmacist services; (2) The identity of the pharmacy or pharmacist actually paid or to be paid; and (3) The prescription number or other identifier of the pharmacist services.
(1) The amount actually paid or to be paid to the pharmacy or pharmacist for the pharmacist services;
(2) The identity of the pharmacy or pharmacist actually paid or to be paid; and
(3) The prescription number or other identifier of the pharmacist services.
(d) A PBM shall pay the amounts it receives for pharmacist services provided in connection with a pharmacy benefits plan or program to the pharmacies or pharmacists that provided the pharmacist services.
(e) This section does not: (1) Require a PBM to set specific fees, rates, or schedules for payment for pharmacist services; (2) Prohibit a PBM from charging for any services in addition to pharmacist services; or (3) Require a PBM to pay a pharmacy or pharmacist more on any claim than the amount disclosed under subdivision (c)(1).
(1) Require a PBM to set specific fees, rates, or schedules for payment for pharmacist services;
(2) Prohibit a PBM from charging for any services in addition to pharmacist services; or
(3) Require a PBM to pay a pharmacy or pharmacist more on any claim than the amount disclosed under subdivision (c)(1).
(f) A violation of this section is an unfair trade practice under the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title.
(g) All documents containing individual claim and payment information specified in subsections (c) and (d) shall be confidential records and not subject to the requirements of title 10, chapter 7, relating to public inspection of records.
(h) A state agency administering a PBM contract may provide the information described in subsections (c) and (d) to a qualified independent auditor in accordance with § 4-3-1021 ; provided, the information is relevant to an audit authorized under § 4-3-1021 , and the independent auditor has agreed to maintain the confidentiality of the information.
Acts 2014, ch. 896, § 1.
Tenn. Code Ann. § 56-11-119 — TN Code / Title 56 / Chapter 11 / Section 56-11-119
Severability
Status: in_force

If any provision of this part or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this part which can be given effect without the invalid provisions or application, and for this purpose the provisions of this part are severable. Acts 2014, ch. 583, § 25.
If any provision of this part or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this part which can be given effect without the invalid provisions or application, and for this purpose the provisions of this part are severable.
Acts 2014, ch. 583, § 25.
Tenn. Code Ann. § 56-3-402 — TN Code / Title 56 / Chapter 3 / Section 56-3-402
Investment of assets by certain domestic insurance companies
Status: in_force

Domestic insurance companies may invest their assets only as follows: (1) In bonds or other evidences of indebtedness, not in default as to principal or interest, that are valid and legally authorized obligations issued, assumed or guaranteed by the United States or by any state of the United States, by any county, city, town, village, municipality or district in the state, or by any political subdivision of the state, by any civil division or public instrumentality of one (1) or more of the governmental units, if, by statutory or other legal requirements applicable to the entity, the obligations are payable, as to both principal and interest, from taxes levied, or by the law required to be levied, upon all taxable property or all taxable income within the jurisdiction of the governmental unit or from adequate special revenues pledged or otherwise appropriated or by the law required to be provided for the purpose of the payment, but not including any obligations payable solely out of special assessments on properties benefited by local improvements; (2) In interest-bearing bonds, debentures, notes or other evidences of indebtedness, or in commercial paper or bankers' acceptances, or similar evidences of indebtedness customarily issued at a discount from principal value, issued, assumed, or guaranteed by any solvent institution created or existing under the laws of the United States or any state of the United States, that are not in default as to principal or interest; provided, that either: (A) The net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period, if during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; or (B) The issuing, assuming or guaranteeing institution's or institutions' long-term obligations are included in the four (4) highest grades by any of the recognized rating agencies; (3) (A) In preferred stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that: (i) If the stock or shares are cumulative, dividends on the stock or shares are not in arrears, or, if noncumulative, full dividends have been paid in each of the three (3) fiscal years next preceding the date of acquisition by the insurance company; (ii) The aggregate net earnings of the issuing institution available for its fixed charges and dividends for a period of three (3) fiscal years next preceding the date of acquisition is at least equal to one and one fourth (1.25) times the sum of its aggregate fixed charges, full contingent interest and preferred dividend requirements for the same period; and (iii) The investments made under the authority of this subdivision (3) shall not at any time cause the insurance company's holdings: (a) Of the preferred stock or shares of any one (1) institution to exceed three percent (3%) of the admitted assets of the insurance company; or (b) Of the preferred stock or shares of all institutions to exceed twenty-five percent (25%) of the admitted assets of the insurance company; (B) For purposes of determining the holdings of the preferred stock or shares pursuant to subdivision (3)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value of that date, whichever is lower; (4) (A) In common stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that: (i) The institution has earned, during the period of five (5) fiscal years next preceding the date of acquisition by the insurance company, an aggregate sum available for dividends upon its common stock or shares equal at least to an aggregate sum that would have been sufficient to pay dividends of six percent (6%) per annum upon the par or stated value of all its common stock or shares outstanding during the period; (ii) If the stock or shares are in a real estate company, §§ 56-3-405 and 56-3-406 shall apply with respect to the stock or shares and to the real property owned by the real estate company, and the amount invested in the stock or shares of the real estate company shall be included with the aggregate of all of the insurance company's holdings and investments for the purposes of § 56-3-405(6) ; (iii) Investments made under the authority of this subdivision (4) shall not at any time cause the insurance company's holdings: (a) Of common stock or shares of any one (1) institution to exceed five percent (5%) of the admitted assets of the insurance company; or (b) Of common stock of all institutions to exceed either the larger of thirty percent (30%) of the assets of the insurance company or one hundred percent (100%) of the amount by which the capital and surplus of the insurance company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state; (B) For purposes of determining the holdings of the common stock or shares pursuant to subdivision (4)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value on that date, whichever is lower; (5) Upon security of promissory notes amply secured by pledge of any bonds or other securities in which the companies are authorized to invest their funds; (6) Upon security of promissory notes amply secured by pledge of unearned premiums of their own policies; (7) In the obligations, and/or stock where stated, of the following agencies of the government of the United States, whether or not the obligations are guaranteed by the United States government: (A) Commodity credit corporation; (B) Federal intermediate credit banks; (C) Federal land banks; (D) Banks for cooperatives; (E) Federal home loan banks, and stock of such banks; (F) The Federal National Mortgage Association, and stock of the Federal National Mortgage Association when acquired in connection with sale of mortgage loans to the association; and (G) Any other similar agency of the government of the United States and of similar financial quality; (8) In lawfully authorized bonds or other evidences of indebtedness issued or guaranteed by the International Bank for Reconstruction and Development, or the Inter-American Development Bank, the African Development Bank, or the Asian Development Bank; (9) In shares in federally insured building and loan and savings and loan institutions; (10) In other good and solvent securities, in addition to those authorized by this section or other sections of the code, subject to the approval of the commissioner; (11) In loans secured by mortgages upon improved, unencumbered real property, or upon leasehold estates in improved real property in the United States, not exceeding, however, seventy-five percent (75%) of the value of the property or leasehold estate, repayable in not more than thirty (30) years. All loans secured by leasehold estates must provide for amortization of principal at least once in each year in amounts sufficient to completely amortize the loan at least twenty-one (21) years prior to expiration of the lease term, inclusive of the term or terms that may be provided by an enforceable option or options of renewal. Real property and leasehold estates shall not be deemed to be encumbered within the meaning of this section by reason of the existence of unpaid assessments and taxes not delinquent, mineral, oil or timber rights, easements or rights-of-way for public highways, private roads, railroads, telegraph, telephone, electric light and power lines, drains, sewers or other similar easements or rights-of-way, liens for service and maintenance of water rights when not delinquent, party wall agreements, building restrictions, or other restrictive covenants or conditions, or leases under which rents or profits are reserved to the owner, if in any event the security for the loan is a first lien upon the real property or leasehold estate and if there is no condition or right of re-entry or forfeiture under which, in the case of real property other than leaseholds, the lien can be cut off, subordinated or otherwise disturbed, or under which, in the case of leaseholds, the insurance company is unable to continue the lease in force for the duration of the loan. A loan guaranteed or insured in full by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 ), may be subject to a prior encumbrance insured by the federal housing administrator or commissioner, and the foregoing limitations in respect to value and repayment shall not apply to a loan that is: (A) Insured by, or for which a commitment to insure has been made by, the federal housing administrator or commissioner pursuant to the National Housing Act ( 12 U.S.C. § 371 et seq.); (B) Guaranteed by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 ), except that, if only a portion of a loan is so guaranteed, the limitation of value shall apply to the portion not so guaranteed; or (C) Insured by the administrator pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 ); (12) In purchase money mortgages or like securities received by the insurance company upon the sale or exchange of real property acquired pursuant to § 56-3-405 ; (13) In bonds, debentures, notes or other evidences of indebtedness of persons or corporations organized under the laws of the United States, or any state of the United States, secured by assignment of lease or leases, or the rentals payable under the leases, of real or personal property or both to the United States, or any state of the United States, or any county, city, town, village, municipality or district in the state or any political subdivision of the county, city, town, village, municipality or district or any civil division or public instrumentality of one (1) or more of the governmental units, or one (1) or more institutions created or existing under the laws of the United States, or of any state; provided, that: (A) The fixed rentals assigned shall be sufficient to repay the indebtedness within the unexpired term of the lease, exclusive of the term that may be provided by an enforceable option of renewal; (B) The lessee has not defaulted in payment of principal of and interest on any of its bonds, notes, debentures, or other evidences of indebtedness during the five (5) fiscal years immediately preceding the date of the investment; (C) The net earnings of each lessee under this subdivision (13) available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period and during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; and (D) A first lien on the interest of the lessor in the unencumbered property so leased shall be obtained as additional security for the indebtedness; (14) In the purchase and ownership of vessels, vehicles, or rolling stock used or useful for the transportation of persons, goods, products or commodities, or of machinery or equipment used by manufacturing, processing or financial establishments, or of communications equipment used by radio or television stations, or of store fixtures used by retail establishments, which transportation equipment, or machinery or equipment or communications equipment or store fixtures are or will become subject to contracts for the sale or use thereof under which contractual payments are to be made which may reasonably be expected to return the principal of, and provide earnings on, the investment within the anticipated useful life of the property, the anticipated useful life to not be less than five (5) years; (15) In loans or investments in addition to those permitted in other subdivisions of this section or under other sections of the code, notwithstanding any limitations or prohibitions contained in § 56-3-405(a)(5) that might otherwise be applicable; provided, that for the purposes of subdivision (11) and this subdivision (15), the portion of a loan secured by a mortgage upon real property that does not exceed seventy-five percent (75%) of the value of the property shall be deemed to be a permitted investment under subdivision (11) and the remainder of the loan may be deemed to be made under this subdivision (15); and provided, further, for the purposes of § 56-3-405 , that the portion of an investment in a single piece or adjoining pieces of real property acquired or held under the authority of § 56-3-405(5) that does not exceed two percent (2%) of the insurance company's admitted assets shall be deemed to be a permitted investment under § 56-3-404 , and the remainder of the investment shall be deemed to be made under this subdivision (15). Any loan or investment originally made under this subdivision (15) that would subsequently, if it were then being made, qualify as a permitted investment under another subdivision of this section or under another section of the code shall thenceforth be deemed to be a permitted investment under the other subdivision or section. The aggregate of the insurance company's loans and investments under this subdivision (15) shall not exceed five percent (5%) of the company's admitted assets; and (16) In electronic computer or data processing machines or systems purchased for use in connection with the business of the insurer; provided, that the machine or system shall have an original cost of at least fifty thousand dollars ($50,000), and that the amortized value of the machine or system at the end of any calendar year shall not be greater than the original purchase price less ten percent (10%) for each completed year after purchase. Acts 1979, ch. 305, § 1; T.C.A., § 56-362; Acts 1981, ch. 270, § 2; 1984, ch. 957, § 2.
Domestic insurance companies may invest their assets only as follows:
(1) In bonds or other evidences of indebtedness, not in default as to principal or interest, that are valid and legally authorized obligations issued, assumed or guaranteed by the United States or by any state of the United States, by any county, city, town, village, municipality or district in the state, or by any political subdivision of the state, by any civil division or public instrumentality of one (1) or more of the governmental units, if, by statutory or other legal requirements applicable to the entity, the obligations are payable, as to both principal and interest, from taxes levied, or by the law required to be levied, upon all taxable property or all taxable income within the jurisdiction of the governmental unit or from adequate special revenues pledged or otherwise appropriated or by the law required to be provided for the purpose of the payment, but not including any obligations payable solely out of special assessments on properties benefited by local improvements;
(2) In interest-bearing bonds, debentures, notes or other evidences of indebtedness, or in commercial paper or bankers' acceptances, or similar evidences of indebtedness customarily issued at a discount from principal value, issued, assumed, or guaranteed by any solvent institution created or existing under the laws of the United States or any state of the United States, that are not in default as to principal or interest; provided, that either: (A) The net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period, if during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; or (B) The issuing, assuming or guaranteeing institution's or institutions' long-term obligations are included in the four (4) highest grades by any of the recognized rating agencies;
(A) The net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period, if during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; or
(B) The issuing, assuming or guaranteeing institution's or institutions' long-term obligations are included in the four (4) highest grades by any of the recognized rating agencies;
(3) (A) In preferred stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that: (i) If the stock or shares are cumulative, dividends on the stock or shares are not in arrears, or, if noncumulative, full dividends have been paid in each of the three (3) fiscal years next preceding the date of acquisition by the insurance company; (ii) The aggregate net earnings of the issuing institution available for its fixed charges and dividends for a period of three (3) fiscal years next preceding the date of acquisition is at least equal to one and one fourth (1.25) times the sum of its aggregate fixed charges, full contingent interest and preferred dividend requirements for the same period; and (iii) The investments made under the authority of this subdivision (3) shall not at any time cause the insurance company's holdings: (a) Of the preferred stock or shares of any one (1) institution to exceed three percent (3%) of the admitted assets of the insurance company; or (b) Of the preferred stock or shares of all institutions to exceed twenty-five percent (25%) of the admitted assets of the insurance company; (B) For purposes of determining the holdings of the preferred stock or shares pursuant to subdivision (3)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value of that date, whichever is lower;
(A) In preferred stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that: (i) If the stock or shares are cumulative, dividends on the stock or shares are not in arrears, or, if noncumulative, full dividends have been paid in each of the three (3) fiscal years next preceding the date of acquisition by the insurance company; (ii) The aggregate net earnings of the issuing institution available for its fixed charges and dividends for a period of three (3) fiscal years next preceding the date of acquisition is at least equal to one and one fourth (1.25) times the sum of its aggregate fixed charges, full contingent interest and preferred dividend requirements for the same period; and (iii) The investments made under the authority of this subdivision (3) shall not at any time cause the insurance company's holdings: (a) Of the preferred stock or shares of any one (1) institution to exceed three percent (3%) of the admitted assets of the insurance company; or (b) Of the preferred stock or shares of all institutions to exceed twenty-five percent (25%) of the admitted assets of the insurance company;
(i) If the stock or shares are cumulative, dividends on the stock or shares are not in arrears, or, if noncumulative, full dividends have been paid in each of the three (3) fiscal years next preceding the date of acquisition by the insurance company;
(ii) The aggregate net earnings of the issuing institution available for its fixed charges and dividends for a period of three (3) fiscal years next preceding the date of acquisition is at least equal to one and one fourth (1.25) times the sum of its aggregate fixed charges, full contingent interest and preferred dividend requirements for the same period; and
(iii) The investments made under the authority of this subdivision (3) shall not at any time cause the insurance company's holdings: (a) Of the preferred stock or shares of any one (1) institution to exceed three percent (3%) of the admitted assets of the insurance company; or (b) Of the preferred stock or shares of all institutions to exceed twenty-five percent (25%) of the admitted assets of the insurance company;
(a) Of the preferred stock or shares of any one (1) institution to exceed three percent (3%) of the admitted assets of the insurance company; or
(b) Of the preferred stock or shares of all institutions to exceed twenty-five percent (25%) of the admitted assets of the insurance company;
(B) For purposes of determining the holdings of the preferred stock or shares pursuant to subdivision (3)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value of that date, whichever is lower;
(4) (A) In common stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that: (i) The institution has earned, during the period of five (5) fiscal years next preceding the date of acquisition by the insurance company, an aggregate sum available for dividends upon its common stock or shares equal at least to an aggregate sum that would have been sufficient to pay dividends of six percent (6%) per annum upon the par or stated value of all its common stock or shares outstanding during the period; (ii) If the stock or shares are in a real estate company, §§ 56-3-405 and 56-3-406 shall apply with respect to the stock or shares and to the real property owned by the real estate company, and the amount invested in the stock or shares of the real estate company shall be included with the aggregate of all of the insurance company's holdings and investments for the purposes of § 56-3-405(6) ; (iii) Investments made under the authority of this subdivision (4) shall not at any time cause the insurance company's holdings: (a) Of common stock or shares of any one (1) institution to exceed five percent (5%) of the admitted assets of the insurance company; or (b) Of common stock of all institutions to exceed either the larger of thirty percent (30%) of the assets of the insurance company or one hundred percent (100%) of the amount by which the capital and surplus of the insurance company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state; (B) For purposes of determining the holdings of the common stock or shares pursuant to subdivision (4)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value on that date, whichever is lower;
(A) In common stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that: (i) The institution has earned, during the period of five (5) fiscal years next preceding the date of acquisition by the insurance company, an aggregate sum available for dividends upon its common stock or shares equal at least to an aggregate sum that would have been sufficient to pay dividends of six percent (6%) per annum upon the par or stated value of all its common stock or shares outstanding during the period; (ii) If the stock or shares are in a real estate company, §§ 56-3-405 and 56-3-406 shall apply with respect to the stock or shares and to the real property owned by the real estate company, and the amount invested in the stock or shares of the real estate company shall be included with the aggregate of all of the insurance company's holdings and investments for the purposes of § 56-3-405(6) ; (iii) Investments made under the authority of this subdivision (4) shall not at any time cause the insurance company's holdings: (a) Of common stock or shares of any one (1) institution to exceed five percent (5%) of the admitted assets of the insurance company; or (b) Of common stock of all institutions to exceed either the larger of thirty percent (30%) of the assets of the insurance company or one hundred percent (100%) of the amount by which the capital and surplus of the insurance company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state;
(i) The institution has earned, during the period of five (5) fiscal years next preceding the date of acquisition by the insurance company, an aggregate sum available for dividends upon its common stock or shares equal at least to an aggregate sum that would have been sufficient to pay dividends of six percent (6%) per annum upon the par or stated value of all its common stock or shares outstanding during the period;
(ii) If the stock or shares are in a real estate company, §§ 56-3-405 and 56-3-406 shall apply with respect to the stock or shares and to the real property owned by the real estate company, and the amount invested in the stock or shares of the real estate company shall be included with the aggregate of all of the insurance company's holdings and investments for the purposes of § 56-3-405(6) ;
(iii) Investments made under the authority of this subdivision (4) shall not at any time cause the insurance company's holdings: (a) Of common stock or shares of any one (1) institution to exceed five percent (5%) of the admitted assets of the insurance company; or (b) Of common stock of all institutions to exceed either the larger of thirty percent (30%) of the assets of the insurance company or one hundred percent (100%) of the amount by which the capital and surplus of the insurance company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state;
(a) Of common stock or shares of any one (1) institution to exceed five percent (5%) of the admitted assets of the insurance company; or
(b) Of common stock of all institutions to exceed either the larger of thirty percent (30%) of the assets of the insurance company or one hundred percent (100%) of the amount by which the capital and surplus of the insurance company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state;
(B) For purposes of determining the holdings of the common stock or shares pursuant to subdivision (4)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value on that date, whichever is lower;
(5) Upon security of promissory notes amply secured by pledge of any bonds or other securities in which the companies are authorized to invest their funds;
(6) Upon security of promissory notes amply secured by pledge of unearned premiums of their own policies;
(7) In the obligations, and/or stock where stated, of the following agencies of the government of the United States, whether or not the obligations are guaranteed by the United States government: (A) Commodity credit corporation; (B) Federal intermediate credit banks; (C) Federal land banks; (D) Banks for cooperatives; (E) Federal home loan banks, and stock of such banks; (F) The Federal National Mortgage Association, and stock of the Federal National Mortgage Association when acquired in connection with sale of mortgage loans to the association; and (G) Any other similar agency of the government of the United States and of similar financial quality;
(A) Commodity credit corporation;
(B) Federal intermediate credit banks;
(C) Federal land banks;
(D) Banks for cooperatives;
(E) Federal home loan banks, and stock of such banks;
(F) The Federal National Mortgage Association, and stock of the Federal National Mortgage Association when acquired in connection with sale of mortgage loans to the association; and
(G) Any other similar agency of the government of the United States and of similar financial quality;
(8) In lawfully authorized bonds or other evidences of indebtedness issued or guaranteed by the International Bank for Reconstruction and Development, or the Inter-American Development Bank, the African Development Bank, or the Asian Development Bank;
(9) In shares in federally insured building and loan and savings and loan institutions;
(10) In other good and solvent securities, in addition to those authorized by this section or other sections of the code, subject to the approval of the commissioner;
(11) In loans secured by mortgages upon improved, unencumbered real property, or upon leasehold estates in improved real property in the United States, not exceeding, however, seventy-five percent (75%) of the value of the property or leasehold estate, repayable in not more than thirty (30) years. All loans secured by leasehold estates must provide for amortization of principal at least once in each year in amounts sufficient to completely amortize the loan at least twenty-one (21) years prior to expiration of the lease term, inclusive of the term or terms that may be provided by an enforceable option or options of renewal. Real property and leasehold estates shall not be deemed to be encumbered within the meaning of this section by reason of the existence of unpaid assessments and taxes not delinquent, mineral, oil or timber rights, easements or rights-of-way for public highways, private roads, railroads, telegraph, telephone, electric light and power lines, drains, sewers or other similar easements or rights-of-way, liens for service and maintenance of water rights when not delinquent, party wall agreements, building restrictions, or other restrictive covenants or conditions, or leases under which rents or profits are reserved to the owner, if in any event the security for the loan is a first lien upon the real property or leasehold estate and if there is no condition or right of re-entry or forfeiture under which, in the case of real property other than leaseholds, the lien can be cut off, subordinated or otherwise disturbed, or under which, in the case of leaseholds, the insurance company is unable to continue the lease in force for the duration of the loan. A loan guaranteed or insured in full by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 ), may be subject to a prior encumbrance insured by the federal housing administrator or commissioner, and the foregoing limitations in respect to value and repayment shall not apply to a loan that is: (A) Insured by, or for which a commitment to insure has been made by, the federal housing administrator or commissioner pursuant to the National Housing Act ( 12 U.S.C. § 371 et seq.); (B) Guaranteed by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 ), except that, if only a portion of a loan is so guaranteed, the limitation of value shall apply to the portion not so guaranteed; or (C) Insured by the administrator pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 );
(A) Insured by, or for which a commitment to insure has been made by, the federal housing administrator or commissioner pursuant to the National Housing Act ( 12 U.S.C. § 371 et seq.);
(B) Guaranteed by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 ), except that, if only a portion of a loan is so guaranteed, the limitation of value shall apply to the portion not so guaranteed; or
(C) Insured by the administrator pursuant to the Servicemen's Readjustment Act of 1944 ( 38 U.S.C. §§ 3701 -3725 );
(12) In purchase money mortgages or like securities received by the insurance company upon the sale or exchange of real property acquired pursuant to § 56-3-405 ;
(13) In bonds, debentures, notes or other evidences of indebtedness of persons or corporations organized under the laws of the United States, or any state of the United States, secured by assignment of lease or leases, or the rentals payable under the leases, of real or personal property or both to the United States, or any state of the United States, or any county, city, town, village, municipality or district in the state or any political subdivision of the county, city, town, village, municipality or district or any civil division or public instrumentality of one (1) or more of the governmental units, or one (1) or more institutions created or existing under the laws of the United States, or of any state; provided, that: (A) The fixed rentals assigned shall be sufficient to repay the indebtedness within the unexpired term of the lease, exclusive of the term that may be provided by an enforceable option of renewal; (B) The lessee has not defaulted in payment of principal of and interest on any of its bonds, notes, debentures, or other evidences of indebtedness during the five (5) fiscal years immediately preceding the date of the investment; (C) The net earnings of each lessee under this subdivision (13) available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period and during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; and (D) A first lien on the interest of the lessor in the unencumbered property so leased shall be obtained as additional security for the indebtedness;
(A) The fixed rentals assigned shall be sufficient to repay the indebtedness within the unexpired term of the lease, exclusive of the term that may be provided by an enforceable option of renewal;
(B) The lessee has not defaulted in payment of principal of and interest on any of its bonds, notes, debentures, or other evidences of indebtedness during the five (5) fiscal years immediately preceding the date of the investment;
(C) The net earnings of each lessee under this subdivision (13) available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period and during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; and
(D) A first lien on the interest of the lessor in the unencumbered property so leased shall be obtained as additional security for the indebtedness;
(14) In the purchase and ownership of vessels, vehicles, or rolling stock used or useful for the transportation of persons, goods, products or commodities, or of machinery or equipment used by manufacturing, processing or financial establishments, or of communications equipment used by radio or television stations, or of store fixtures used by retail establishments, which transportation equipment, or machinery or equipment or communications equipment or store fixtures are or will become subject to contracts for the sale or use thereof under which contractual payments are to be made which may reasonably be expected to return the principal of, and provide earnings on, the investment within the anticipated useful life of the property, the anticipated useful life to not be less than five (5) years;
(15) In loans or investments in addition to those permitted in other subdivisions of this section or under other sections of the code, notwithstanding any limitations or prohibitions contained in § 56-3-405(a)(5) that might otherwise be applicable; provided, that for the purposes of subdivision (11) and this subdivision (15), the portion of a loan secured by a mortgage upon real property that does not exceed seventy-five percent (75%) of the value of the property shall be deemed to be a permitted investment under subdivision (11) and the remainder of the loan may be deemed to be made under this subdivision (15); and provided, further, for the purposes of § 56-3-405 , that the portion of an investment in a single piece or adjoining pieces of real property acquired or held under the authority of § 56-3-405(5) that does not exceed two percent (2%) of the insurance company's admitted assets shall be deemed to be a permitted investment under § 56-3-404 , and the remainder of the investment shall be deemed to be made under this subdivision (15). Any loan or investment originally made under this subdivision (15) that would subsequently, if it were then being made, qualify as a permitted investment under another subdivision of this section or under another section of the code shall thenceforth be deemed to be a permitted investment under the other subdivision or section. The aggregate of the insurance company's loans and investments under this subdivision (15) shall not exceed five percent (5%) of the company's admitted assets; and
(16) In electronic computer or data processing machines or systems purchased for use in connection with the business of the insurer; provided, that the machine or system shall have an original cost of at least fifty thousand dollars ($50,000), and that the amortized value of the machine or system at the end of any calendar year shall not be greater than the original purchase price less ten percent (10%) for each completed year after purchase.
Acts 1979, ch. 305, § 1; T.C.A., § 56-362; Acts 1981, ch. 270, § 2; 1984, ch. 957, § 2.
Tenn. Code Ann. § 56-1-911 — TN Code / Title 56 / Chapter 1 / Section 56-1-911
Reserve calculation - Valuation net premium exceeding the gross premium charged
Status: in_force

(a) If in any contract year the gross premium charged by a company on a policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest and method actually used for the policy or contract; or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in §§ 56-1-904 and 56-1-906 . (b) For a life insurance policy issued on or after January 1, 1986, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value, or a combination, in an amount greater than the excess premium, subsection (a) shall be applied as if the method actually used in calculating the reserve for the policy were the method described in § 56-1-907 , without consideration of § 56-1-907(b) . The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with § 56-1-907 , including § 56-1-907(b) , and the minimum reserve calculated in accordance with this section. Added by 2013 Tenn. Acts, ch. 260,s 3, eff. 7/1/2013.
(a) If in any contract year the gross premium charged by a company on a policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest and method actually used for the policy or contract; or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in §§ 56-1-904 and 56-1-906 .
(b) For a life insurance policy issued on or after January 1, 1986, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value, or a combination, in an amount greater than the excess premium, subsection (a) shall be applied as if the method actually used in calculating the reserve for the policy were the method described in § 56-1-907 , without consideration of § 56-1-907(b) . The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with § 56-1-907 , including § 56-1-907(b) , and the minimum reserve calculated in accordance with this section.
Added by 2013 Tenn. Acts, ch. 260,s 3, eff. 7/1/2013.
Tenn. Code Ann. § 56-7-907 — TN Code / Title 56 / Chapter 7 / Section 56-7-907
Initial amount - Commencement and term of insurance - Discharge of indebtedness
Status: in_force

(a) The initial amount of credit life insurance issued in connection with a specific loan or other credit transaction shall not exceed the total amount repayable under the contract of indebtedness, which amount repayable may include the amount of the loan commitment by the creditor. (b) (1) The term of any credit life insurance shall, subject to acceptance by the insurer, if required, and unless otherwise permitted pursuant to § 56-7-906(c) , commence on the date when the debtor becomes obligated to the creditor. Where a group policy provides coverage with respect to existing obligations, the credit life insurance on a debtor with respect to the indebtedness, unless otherwise expressly authorized by the commissioner, shall commence on the effective date of the policy. The term of an individual policy of credit life insurance shall not extend more than fifteen (15) days beyond the scheduled maturity date of the indebtedness unless extended at no cost to the debtor. If insurance on the life of a debtor is provided under a group policy, the term of the insurance shall not be continued for a period greater than the duration of the indebtedness. (2) Evidence of insurability in the form of answers to questions regarding the debtor's health may be required: (A) If a debtor requests coverage more than thirty (30) days after the extension of credit for which coverage is sought; or (B) If the amount of life insurance applied for is twenty-five thousand dollars ($25,000) or more. (3) Where evidence of insurability is required and the evidence is furnished more than thirty (30) days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for the insurance. (c) If the indebtedness is discharged due to prepayment, the credit life insurance in force shall be terminated. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in § 56-7-909 . Acts 1985, ch. 107, § 3.
(a) The initial amount of credit life insurance issued in connection with a specific loan or other credit transaction shall not exceed the total amount repayable under the contract of indebtedness, which amount repayable may include the amount of the loan commitment by the creditor.
(b) (1) The term of any credit life insurance shall, subject to acceptance by the insurer, if required, and unless otherwise permitted pursuant to § 56-7-906(c) , commence on the date when the debtor becomes obligated to the creditor. Where a group policy provides coverage with respect to existing obligations, the credit life insurance on a debtor with respect to the indebtedness, unless otherwise expressly authorized by the commissioner, shall commence on the effective date of the policy. The term of an individual policy of credit life insurance shall not extend more than fifteen (15) days beyond the scheduled maturity date of the indebtedness unless extended at no cost to the debtor. If insurance on the life of a debtor is provided under a group policy, the term of the insurance shall not be continued for a period greater than the duration of the indebtedness. (2) Evidence of insurability in the form of answers to questions regarding the debtor's health may be required: (A) If a debtor requests coverage more than thirty (30) days after the extension of credit for which coverage is sought; or (B) If the amount of life insurance applied for is twenty-five thousand dollars ($25,000) or more. (3) Where evidence of insurability is required and the evidence is furnished more than thirty (30) days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for the insurance.
(1) The term of any credit life insurance shall, subject to acceptance by the insurer, if required, and unless otherwise permitted pursuant to § 56-7-906(c) , commence on the date when the debtor becomes obligated to the creditor. Where a group policy provides coverage with respect to existing obligations, the credit life insurance on a debtor with respect to the indebtedness, unless otherwise expressly authorized by the commissioner, shall commence on the effective date of the policy. The term of an individual policy of credit life insurance shall not extend more than fifteen (15) days beyond the scheduled maturity date of the indebtedness unless extended at no cost to the debtor. If insurance on the life of a debtor is provided under a group policy, the term of the insurance shall not be continued for a period greater than the duration of the indebtedness.
(2) Evidence of insurability in the form of answers to questions regarding the debtor's health may be required: (A) If a debtor requests coverage more than thirty (30) days after the extension of credit for which coverage is sought; or (B) If the amount of life insurance applied for is twenty-five thousand dollars ($25,000) or more.
(A) If a debtor requests coverage more than thirty (30) days after the extension of credit for which coverage is sought; or
(B) If the amount of life insurance applied for is twenty-five thousand dollars ($25,000) or more.
(3) Where evidence of insurability is required and the evidence is furnished more than thirty (30) days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for the insurance.
(c) If the indebtedness is discharged due to prepayment, the credit life insurance in force shall be terminated. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in § 56-7-909 .
Acts 1985, ch. 107, § 3.
Tenn. Code Ann. § 56-7-1007 — TN Code / Title 56 / Chapter 7 / Section 56-7-1007
Market conduct examination of health insurance carrier for compliance with coverage requirements for mental health or alcoholism or drug dependency services
Status: in_force

(a) Whenever the commissioner performs a market conduct examination of a health insurance carrier that issues a health benefit plan under the jurisdiction of the department of commerce and insurance for compliance with § 56-7-2360 , the examination shall include, but not be limited to, the following information: (1) A description of the process used to develop or select the medical necessity criteria for mental health or alcoholism or drug dependency benefits and the process used to develop or select the medical necessity criteria for medical and surgical benefits; (2) Identification of all non-quantitative treatment limitations (NQTLs) that are applied to both mental health or alcoholism or drug dependency benefits and medical and surgical benefits; and (3) The results of any analysis that may have been performed by a health insurance carrier that demonstrates that for the medical necessity criteria described in subdivision (a)(1) and for each NQTL identified in subdivision (a)(2), as written and in operation, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL to mental health or alcoholism or drug dependency benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL, as written and in operation, to medical and surgical benefits. The results of the analysis may: (A) Identify the factors used to determine that an NQTL will apply to a benefit, including factors that were considered but rejected; (B) Identify and define the specific evidentiary standards used to define the factors and any other evidentiary standards relied upon in designing each NQTL; (C) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that the processes and strategies used to design each NQTL as written for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes and strategies used to design each NQTL as written for medical and surgical benefits; (D) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that processes and strategies used to apply each NQTL in operation for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes or strategies used to apply each NQTL in operation for medical and surgical benefits; (E) Disclose the specific findings and conclusions reached by the health insurance carrier that the results of any relevant analyses under this subsection (a) indicate that the health insurance carrier is in compliance with this section and the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (Pub.L. No. 110-343), and its implementing regulations, including 45 CFR 146.136 and any other applicable regulations; and (F) Identify any other information necessary to clarify data provided in accordance with this section requested by the commissioner, including information that may be "proprietary" or have "commercial value." Any information submitted that is proprietary shall not be made a public record under title 10, chapter 7. (b) The health insurance carrier's chief executive officer and chief medical officer shall sign a certification that affirms that the health insurance carrier has completed a comprehensive review of its administrative practices for the prior calendar year for compliance with the necessary provisions of this section and §§ 56-7-2601 and 56-7-2602 , and the MHPAEA. (c) Separate NQTLs that apply to mental health or alcohol or drug dependency benefits but do not apply to medical and surgical benefits within any classification of benefits are not permitted. Acts 2018 , ch. 1012, § 2.
(a) Whenever the commissioner performs a market conduct examination of a health insurance carrier that issues a health benefit plan under the jurisdiction of the department of commerce and insurance for compliance with § 56-7-2360 , the examination shall include, but not be limited to, the following information: (1) A description of the process used to develop or select the medical necessity criteria for mental health or alcoholism or drug dependency benefits and the process used to develop or select the medical necessity criteria for medical and surgical benefits; (2) Identification of all non-quantitative treatment limitations (NQTLs) that are applied to both mental health or alcoholism or drug dependency benefits and medical and surgical benefits; and (3) The results of any analysis that may have been performed by a health insurance carrier that demonstrates that for the medical necessity criteria described in subdivision (a)(1) and for each NQTL identified in subdivision (a)(2), as written and in operation, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL to mental health or alcoholism or drug dependency benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL, as written and in operation, to medical and surgical benefits. The results of the analysis may: (A) Identify the factors used to determine that an NQTL will apply to a benefit, including factors that were considered but rejected; (B) Identify and define the specific evidentiary standards used to define the factors and any other evidentiary standards relied upon in designing each NQTL; (C) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that the processes and strategies used to design each NQTL as written for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes and strategies used to design each NQTL as written for medical and surgical benefits; (D) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that processes and strategies used to apply each NQTL in operation for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes or strategies used to apply each NQTL in operation for medical and surgical benefits; (E) Disclose the specific findings and conclusions reached by the health insurance carrier that the results of any relevant analyses under this subsection (a) indicate that the health insurance carrier is in compliance with this section and the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (Pub.L. No. 110-343), and its implementing regulations, including 45 CFR 146.136 and any other applicable regulations; and (F) Identify any other information necessary to clarify data provided in accordance with this section requested by the commissioner, including information that may be "proprietary" or have "commercial value." Any information submitted that is proprietary shall not be made a public record under title 10, chapter 7.
(1) A description of the process used to develop or select the medical necessity criteria for mental health or alcoholism or drug dependency benefits and the process used to develop or select the medical necessity criteria for medical and surgical benefits;
(2) Identification of all non-quantitative treatment limitations (NQTLs) that are applied to both mental health or alcoholism or drug dependency benefits and medical and surgical benefits; and
(3) The results of any analysis that may have been performed by a health insurance carrier that demonstrates that for the medical necessity criteria described in subdivision (a)(1) and for each NQTL identified in subdivision (a)(2), as written and in operation, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL to mental health or alcoholism or drug dependency benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL, as written and in operation, to medical and surgical benefits. The results of the analysis may: (A) Identify the factors used to determine that an NQTL will apply to a benefit, including factors that were considered but rejected; (B) Identify and define the specific evidentiary standards used to define the factors and any other evidentiary standards relied upon in designing each NQTL; (C) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that the processes and strategies used to design each NQTL as written for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes and strategies used to design each NQTL as written for medical and surgical benefits; (D) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that processes and strategies used to apply each NQTL in operation for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes or strategies used to apply each NQTL in operation for medical and surgical benefits; (E) Disclose the specific findings and conclusions reached by the health insurance carrier that the results of any relevant analyses under this subsection (a) indicate that the health insurance carrier is in compliance with this section and the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (Pub.L. No. 110-343), and its implementing regulations, including 45 CFR 146.136 and any other applicable regulations; and (F) Identify any other information necessary to clarify data provided in accordance with this section requested by the commissioner, including information that may be "proprietary" or have "commercial value." Any information submitted that is proprietary shall not be made a public record under title 10, chapter 7.
(A) Identify the factors used to determine that an NQTL will apply to a benefit, including factors that were considered but rejected;
(B) Identify and define the specific evidentiary standards used to define the factors and any other evidentiary standards relied upon in designing each NQTL;
(C) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that the processes and strategies used to design each NQTL as written for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes and strategies used to design each NQTL as written for medical and surgical benefits;
(D) Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that processes and strategies used to apply each NQTL in operation for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes or strategies used to apply each NQTL in operation for medical and surgical benefits;
(E) Disclose the specific findings and conclusions reached by the health insurance carrier that the results of any relevant analyses under this subsection (a) indicate that the health insurance carrier is in compliance with this section and the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (Pub.L. No. 110-343), and its implementing regulations, including 45 CFR 146.136 and any other applicable regulations; and
(F) Identify any other information necessary to clarify data provided in accordance with this section requested by the commissioner, including information that may be "proprietary" or have "commercial value." Any information submitted that is proprietary shall not be made a public record under title 10, chapter 7.
(b) The health insurance carrier's chief executive officer and chief medical officer shall sign a certification that affirms that the health insurance carrier has completed a comprehensive review of its administrative practices for the prior calendar year for compliance with the necessary provisions of this section and §§ 56-7-2601 and 56-7-2602 , and the MHPAEA.
(c) Separate NQTLs that apply to mental health or alcohol or drug dependency benefits but do not apply to medical and surgical benefits within any classification of benefits are not permitted.
Acts 2018 , ch. 1012, § 2.
Tenn. Code Ann. § 56-7-702 — TN Code / Title 56 / Chapter 7 / Section 56-7-702
Definitions - Provisions required in all industrial life insurance policies
Status: in_force

(a) Definitions. As used in this section: (1) "Insurer" means any person, firm, corporation, partnership, association, trust, or other entity of any type engaged as a principal in the business of insurance in this state; (2) "Policyowner," absent any policy provision to the contrary, means the person who, according to the insurer's records, has the right to change the beneficiary under the policy; provided, that nothing in this section shall be construed to limit the rights of any assignee of a small insurance policy to enforce any assignment pursuant to its terms, or to prohibit an insurer from recognizing the assignment according to its terms; and (3) "Small policy," "small insurance policy," or "small insurance" means any life insurance policy issued after April 1, 1980, that meets the definition of "industrial life insurance" in § 56-7-701 . For the purposes of this subdivision (a)(3), "face amount" does not include payments contingent upon: (A) Time elapsing before the insured's death; (B) Cause of the insured's death; or (C) Circumstances of the insured's death. (b) Small Insurance Policy Law of 1979. After April 1, 1980, except the provisions required by subdivision (b)(15), all industrial life insurance policies delivered or issued for delivery in this state shall contain provisions not less favorable to the policyowner than the following: (1) A provision that the insured is entitled to a grace period of four (4) weeks within which the payment of any premium after the first may be made, except that in policies for which premiums are payable monthly, the period of grace shall be either one (1) month or thirty (30) days; during which period of grace the policy shall continue in full force; but in case the policy becomes a claim within the grace period before the overdue premiums are paid, the amount of the overdue premiums may be deducted in any settlement under the policy; (2) A provision that the policy constitutes the entire contract between the parties, or a provision that the policy and the application for the policy constitute the entire contract between the parties; and in the latter case the policy must contain a provision that all statements made by the insured shall, in the absence of fraud, be deemed to be representations and not warranties. No statement in the application shall be used to avoid the policy unless a copy of the application has been attached to and made a part of the policy when issued; (3) A provision that the policy shall be incontestable after it has been in force during the lifetime of the insured for a specified period, not more than two (2) years from its date except for nonpayment of premiums and except for violations of conditions of the policy relating to naval and military services in time of war; (4) A provision that if it is found that the age of the person insured, or the age of any other person considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium paid would have purchased at the correct age or ages; (5) If a participating policy, a provision indicating the conditions under which the company shall periodically ascertain and apportion any divisible surplus accruing on the policy; (6) A provision that will provide for a stipulated form of insurance in the event of default of premium payments after premiums have been paid for three (3) full years; and a provision that, in the event of default in premium payments after premiums have been paid for three (3) full years, there shall be a specified cash surrender value available in lieu of the stipulated form of insurance, and the amount of which stipulated cash value shall not be less than the reserve on the policy and any dividend additions thereto, if any, at the end of the last completed quarter of the policy year for which premiums have been paid, the policy to specify a mortality table, rate of interest and method of valuation adopted to compute such reserve, exclusive of any reserve on disability benefits and accidental death benefits, less a maximum percentage of not more than two and one half percent (2.5%) of the maximum cash amount insured by the policy and dividend addition thereto, if any, when the issue age is under ten (10) years, and less a maximum percentage of not more than two and one half percent (2.5%) of the current cash amount insured by the policy and dividend additions thereto, if any, if the issue age is ten (10) years or older, and less any existing indebtedness to the company on or secured by the policy; (7) A provision, if the policy provides for more than one (1) stipulated form of insurance, for a period of not less than sixty (60) days from date of defaulted premium within which the insured shall be entitled to notify the company in writing of the insured's election of an option, it being expressly stated as to which option will automatically apply in the event of the insured's failure to notify the company of the selection within the stipulated period; (8) A provision that the policy may be surrendered to the company at its home office within a period of not less than sixty (60) days after the due date of the defaulted premium for the specified cash value; provided, that the insurer may defer payment for not more than six (6) months after the application for the payment is made; (9) A provision that if, in the event of default in premium payments, the value of the policy shall be applied to the purchase of other insurance; and if the insurance is in force and the original policy has not been surrendered to the company and cancelled, the policy may be reinstated within three (3) years from the default upon evidence of insurability satisfactory to the company and payment of arrears of premiums, with interest; (10) A table showing in figures the nonforfeiture options and loan values available under the policy every year upon default in payment of premiums during at least the first twenty (20) years of the policy, the table to begin with the year in which the values become available, and a provision that the company will furnish upon request an extension of the table beyond the years shown in the policy; (11) A provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and not later than two (2) months after receipt of proof; (12) A title on the face of the policy briefly describing its form; (13) A provision that no agent shall have the power or authority to waive, change or alter any of the terms or conditions of any contract delivered or issued for delivery; (14) A space on the front or back page of the policy for the name of the beneficiary designated, with a reservation of the right to designate or change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured. The policy may also contain a provision that if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than thirty (30) days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured or is not legally competent to give valid release, then the insurer may make payment under the policy to the executor or administrator of the insured, or to any of the insured's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled to the payment by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention or burial of the insured; (15) A provision in policies issued after July 1, 1980, that after three (3) full years' premiums have been paid the company at any time while the policy is in force will advance on proper assignment of the policy and on the sole security of the policy, at a specified rate of interest, a sum equal to, or, at the option of the policyowner, less than the amount required by § 56-7-2309 under the conditions specified by § 56-7-2309 ; and that the company will deduct from the loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year; provided, that nothing in this subdivision (b)(15) shall require a policy loan in an amount less than twenty-five dollars ($25.00). It shall be further stipulated in the policy that failure to repay the advance or to pay interest shall not void the policy unless the total indebtedness on the policy to the company equals or exceeds the loan value at the time of the failure, nor until one (1) month after written notice has been mailed or otherwise delivered by the company to the last known address of the policyowner and of the assignee, if any. No condition other than as provided in this subdivision (b)(15) or in § 56-7-2309 shall be exacted as a prerequisite to the advance. This provision shall not be required in term insurances; (16) A provision that all premiums shall be payable in advance either at the home office of the company or to any agent of the company upon delivery of a receipt signed by one (1) or more of the officers who shall be named in the policy; (17) A provision stating clearly, understandably and conspicuously in substance that the policyowner shall be permitted to return it within a period of not less than ten (10) days of its delivery to the policyowner and to have the premium paid by the policyowner refunded if the policyowner so elects. If the policyowner returns the policy to the insurer, the policy shall be void from the beginning, the parties shall be in the same position as if no policy had been issued and the insurer shall promptly refund any premiums collected in connection with the policy; (18) (A) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of their due date by not fewer than fifty-two (52) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures a refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least fifty-two (52) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that the insurer shall determine not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than fifty-two (52) weeks; (B) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of the due date of the premiums by not fewer than twenty-six (26) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; and provided, further, that nothing in this subsection (b) shall require the insurer to provide any discount in an amount of less than four dollars ($4.00); or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least twenty-six (26) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that shall be determined by the insurer not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than twenty-six (26) weeks; provided, that nothing in this subsection (b) shall require the insurer to provide any refund in an amount less than four dollars ($4.00). (c) Requirements and Prohibitions. (1) No insurer shall offer, sell, issue, or deliver within this state any small insurance policy unless and until there has been compliance as to the policy with each provision of this section and the regulations adopted pursuant to this section; (2) (A) No small insurance policy shall contain any of the provisions prohibited by § 56-7-2308 ; (B) No small insurance policy shall exclude or restrict the payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another; (3) Every small insurance policy shall be subject to the requirements of § 56-7-2311 , and as a part of the approval, the insurer shall be required to sustain the burden of satisfying the commissioner that the policy complies with this section. The commissioner shall disapprove any form if it contains provisions that are misleading, deceptive or encourage misrepresentation of the coverage or are contrary to this title or of any rule or regulation promulgated under this title; (4) Each of the optional benefits and charges provided under a small insurance policy shall be separately priced, and the prices shall be set forth in the policy in a clear, conspicuous and understandable manner; (5) No small insurance policy shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, or application be used in connection with the policy until a copy of the form and of the premium rates for the policy have been filed with the commissioner; (6) No insurer shall deliver a small policy in this state unless the company has first taken the written application of the insured or proposed policyowner on an application form theretofore approved by the commissioner. The application shall contain an acknowledgment by the applicant that the applicant has reviewed the life insurance program, disclosures by the applicant of the total face amount of insurance and the number of policies on the life of the applicant and the proposed insured, if the proposed insured is a person other than the applicant, and an acknowledgment that the applicant is aware of the relationship of the cost of the insurance program to the applicant's total income. (d) Enforcement. (1) Any insurer who fails to comply with any requirement imposed under this section with respect to any person is liable to the person, in a private right of action, in an amount equal to the sum of: (A) Any actual damage sustained by the person as a result of the failure; and (B) The court may grant equitable and declaratory relief necessary to enforce the requirements of this section; (2) In addition to other applicable provisions, compliance with this section shall also be enforced by the commissioner. A violation of this section shall be punishable by a civil penalty not to exceed five hundred dollars ($500) for each offense; (3) The failure of an insurer to comply with this section shall not invalidate the policy, and the violation shall not provide a defense to the insurer as to any claim brought by the holder. (e) Miscellaneous Provisions. (1) Approvals heretofore granted all small insurance policies filed and approved under § 56-7-2311 , or any predecessor, shall be withdrawn on April 1, 1980, and no policy form shall be issued after that date unless the policy has first been filed and approved in accordance with law; (2) When any small insurance policy provides for weekly premium payments, there may be a provision that upon proper notice to the insurer, while premiums on the policy are not in default beyond the grace period, of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for the purpose, the insurer will, at the end of each period of a year from the due date of the first premium so paid, for which period the premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount that fairly represents the savings in collection expense. Acts 1945, ch. 27, § 2; mod. C. Supp. 1950, § 6447.2; Acts 1979, ch. 398, §§ 1-6; T.C.A. (orig. ed.), § 56-1129.
(a) Definitions. As used in this section: (1) "Insurer" means any person, firm, corporation, partnership, association, trust, or other entity of any type engaged as a principal in the business of insurance in this state; (2) "Policyowner," absent any policy provision to the contrary, means the person who, according to the insurer's records, has the right to change the beneficiary under the policy; provided, that nothing in this section shall be construed to limit the rights of any assignee of a small insurance policy to enforce any assignment pursuant to its terms, or to prohibit an insurer from recognizing the assignment according to its terms; and (3) "Small policy," "small insurance policy," or "small insurance" means any life insurance policy issued after April 1, 1980, that meets the definition of "industrial life insurance" in § 56-7-701 . For the purposes of this subdivision (a)(3), "face amount" does not include payments contingent upon: (A) Time elapsing before the insured's death; (B) Cause of the insured's death; or (C) Circumstances of the insured's death.
(1) "Insurer" means any person, firm, corporation, partnership, association, trust, or other entity of any type engaged as a principal in the business of insurance in this state;
(2) "Policyowner," absent any policy provision to the contrary, means the person who, according to the insurer's records, has the right to change the beneficiary under the policy; provided, that nothing in this section shall be construed to limit the rights of any assignee of a small insurance policy to enforce any assignment pursuant to its terms, or to prohibit an insurer from recognizing the assignment according to its terms; and
(3) "Small policy," "small insurance policy," or "small insurance" means any life insurance policy issued after April 1, 1980, that meets the definition of "industrial life insurance" in § 56-7-701 . For the purposes of this subdivision (a)(3), "face amount" does not include payments contingent upon: (A) Time elapsing before the insured's death; (B) Cause of the insured's death; or (C) Circumstances of the insured's death.
(A) Time elapsing before the insured's death;
(B) Cause of the insured's death; or
(C) Circumstances of the insured's death.
(b) Small Insurance Policy Law of 1979. After April 1, 1980, except the provisions required by subdivision (b)(15), all industrial life insurance policies delivered or issued for delivery in this state shall contain provisions not less favorable to the policyowner than the following: (1) A provision that the insured is entitled to a grace period of four (4) weeks within which the payment of any premium after the first may be made, except that in policies for which premiums are payable monthly, the period of grace shall be either one (1) month or thirty (30) days; during which period of grace the policy shall continue in full force; but in case the policy becomes a claim within the grace period before the overdue premiums are paid, the amount of the overdue premiums may be deducted in any settlement under the policy; (2) A provision that the policy constitutes the entire contract between the parties, or a provision that the policy and the application for the policy constitute the entire contract between the parties; and in the latter case the policy must contain a provision that all statements made by the insured shall, in the absence of fraud, be deemed to be representations and not warranties. No statement in the application shall be used to avoid the policy unless a copy of the application has been attached to and made a part of the policy when issued; (3) A provision that the policy shall be incontestable after it has been in force during the lifetime of the insured for a specified period, not more than two (2) years from its date except for nonpayment of premiums and except for violations of conditions of the policy relating to naval and military services in time of war; (4) A provision that if it is found that the age of the person insured, or the age of any other person considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium paid would have purchased at the correct age or ages; (5) If a participating policy, a provision indicating the conditions under which the company shall periodically ascertain and apportion any divisible surplus accruing on the policy; (6) A provision that will provide for a stipulated form of insurance in the event of default of premium payments after premiums have been paid for three (3) full years; and a provision that, in the event of default in premium payments after premiums have been paid for three (3) full years, there shall be a specified cash surrender value available in lieu of the stipulated form of insurance, and the amount of which stipulated cash value shall not be less than the reserve on the policy and any dividend additions thereto, if any, at the end of the last completed quarter of the policy year for which premiums have been paid, the policy to specify a mortality table, rate of interest and method of valuation adopted to compute such reserve, exclusive of any reserve on disability benefits and accidental death benefits, less a maximum percentage of not more than two and one half percent (2.5%) of the maximum cash amount insured by the policy and dividend addition thereto, if any, when the issue age is under ten (10) years, and less a maximum percentage of not more than two and one half percent (2.5%) of the current cash amount insured by the policy and dividend additions thereto, if any, if the issue age is ten (10) years or older, and less any existing indebtedness to the company on or secured by the policy; (7) A provision, if the policy provides for more than one (1) stipulated form of insurance, for a period of not less than sixty (60) days from date of defaulted premium within which the insured shall be entitled to notify the company in writing of the insured's election of an option, it being expressly stated as to which option will automatically apply in the event of the insured's failure to notify the company of the selection within the stipulated period; (8) A provision that the policy may be surrendered to the company at its home office within a period of not less than sixty (60) days after the due date of the defaulted premium for the specified cash value; provided, that the insurer may defer payment for not more than six (6) months after the application for the payment is made; (9) A provision that if, in the event of default in premium payments, the value of the policy shall be applied to the purchase of other insurance; and if the insurance is in force and the original policy has not been surrendered to the company and cancelled, the policy may be reinstated within three (3) years from the default upon evidence of insurability satisfactory to the company and payment of arrears of premiums, with interest; (10) A table showing in figures the nonforfeiture options and loan values available under the policy every year upon default in payment of premiums during at least the first twenty (20) years of the policy, the table to begin with the year in which the values become available, and a provision that the company will furnish upon request an extension of the table beyond the years shown in the policy; (11) A provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and not later than two (2) months after receipt of proof; (12) A title on the face of the policy briefly describing its form; (13) A provision that no agent shall have the power or authority to waive, change or alter any of the terms or conditions of any contract delivered or issued for delivery; (14) A space on the front or back page of the policy for the name of the beneficiary designated, with a reservation of the right to designate or change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured. The policy may also contain a provision that if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than thirty (30) days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured or is not legally competent to give valid release, then the insurer may make payment under the policy to the executor or administrator of the insured, or to any of the insured's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled to the payment by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention or burial of the insured; (15) A provision in policies issued after July 1, 1980, that after three (3) full years' premiums have been paid the company at any time while the policy is in force will advance on proper assignment of the policy and on the sole security of the policy, at a specified rate of interest, a sum equal to, or, at the option of the policyowner, less than the amount required by § 56-7-2309 under the conditions specified by § 56-7-2309 ; and that the company will deduct from the loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year; provided, that nothing in this subdivision (b)(15) shall require a policy loan in an amount less than twenty-five dollars ($25.00). It shall be further stipulated in the policy that failure to repay the advance or to pay interest shall not void the policy unless the total indebtedness on the policy to the company equals or exceeds the loan value at the time of the failure, nor until one (1) month after written notice has been mailed or otherwise delivered by the company to the last known address of the policyowner and of the assignee, if any. No condition other than as provided in this subdivision (b)(15) or in § 56-7-2309 shall be exacted as a prerequisite to the advance. This provision shall not be required in term insurances; (16) A provision that all premiums shall be payable in advance either at the home office of the company or to any agent of the company upon delivery of a receipt signed by one (1) or more of the officers who shall be named in the policy; (17) A provision stating clearly, understandably and conspicuously in substance that the policyowner shall be permitted to return it within a period of not less than ten (10) days of its delivery to the policyowner and to have the premium paid by the policyowner refunded if the policyowner so elects. If the policyowner returns the policy to the insurer, the policy shall be void from the beginning, the parties shall be in the same position as if no policy had been issued and the insurer shall promptly refund any premiums collected in connection with the policy; (18) (A) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of their due date by not fewer than fifty-two (52) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures a refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least fifty-two (52) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that the insurer shall determine not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than fifty-two (52) weeks; (B) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of the due date of the premiums by not fewer than twenty-six (26) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; and provided, further, that nothing in this subsection (b) shall require the insurer to provide any discount in an amount of less than four dollars ($4.00); or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least twenty-six (26) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that shall be determined by the insurer not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than twenty-six (26) weeks; provided, that nothing in this subsection (b) shall require the insurer to provide any refund in an amount less than four dollars ($4.00).
(1) A provision that the insured is entitled to a grace period of four (4) weeks within which the payment of any premium after the first may be made, except that in policies for which premiums are payable monthly, the period of grace shall be either one (1) month or thirty (30) days; during which period of grace the policy shall continue in full force; but in case the policy becomes a claim within the grace period before the overdue premiums are paid, the amount of the overdue premiums may be deducted in any settlement under the policy;
(2) A provision that the policy constitutes the entire contract between the parties, or a provision that the policy and the application for the policy constitute the entire contract between the parties; and in the latter case the policy must contain a provision that all statements made by the insured shall, in the absence of fraud, be deemed to be representations and not warranties. No statement in the application shall be used to avoid the policy unless a copy of the application has been attached to and made a part of the policy when issued;
(3) A provision that the policy shall be incontestable after it has been in force during the lifetime of the insured for a specified period, not more than two (2) years from its date except for nonpayment of premiums and except for violations of conditions of the policy relating to naval and military services in time of war;
(4) A provision that if it is found that the age of the person insured, or the age of any other person considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium paid would have purchased at the correct age or ages;
(5) If a participating policy, a provision indicating the conditions under which the company shall periodically ascertain and apportion any divisible surplus accruing on the policy;
(6) A provision that will provide for a stipulated form of insurance in the event of default of premium payments after premiums have been paid for three (3) full years; and a provision that, in the event of default in premium payments after premiums have been paid for three (3) full years, there shall be a specified cash surrender value available in lieu of the stipulated form of insurance, and the amount of which stipulated cash value shall not be less than the reserve on the policy and any dividend additions thereto, if any, at the end of the last completed quarter of the policy year for which premiums have been paid, the policy to specify a mortality table, rate of interest and method of valuation adopted to compute such reserve, exclusive of any reserve on disability benefits and accidental death benefits, less a maximum percentage of not more than two and one half percent (2.5%) of the maximum cash amount insured by the policy and dividend addition thereto, if any, when the issue age is under ten (10) years, and less a maximum percentage of not more than two and one half percent (2.5%) of the current cash amount insured by the policy and dividend additions thereto, if any, if the issue age is ten (10) years or older, and less any existing indebtedness to the company on or secured by the policy;
(7) A provision, if the policy provides for more than one (1) stipulated form of insurance, for a period of not less than sixty (60) days from date of defaulted premium within which the insured shall be entitled to notify the company in writing of the insured's election of an option, it being expressly stated as to which option will automatically apply in the event of the insured's failure to notify the company of the selection within the stipulated period;
(8) A provision that the policy may be surrendered to the company at its home office within a period of not less than sixty (60) days after the due date of the defaulted premium for the specified cash value; provided, that the insurer may defer payment for not more than six (6) months after the application for the payment is made;
(9) A provision that if, in the event of default in premium payments, the value of the policy shall be applied to the purchase of other insurance; and if the insurance is in force and the original policy has not been surrendered to the company and cancelled, the policy may be reinstated within three (3) years from the default upon evidence of insurability satisfactory to the company and payment of arrears of premiums, with interest;
(10) A table showing in figures the nonforfeiture options and loan values available under the policy every year upon default in payment of premiums during at least the first twenty (20) years of the policy, the table to begin with the year in which the values become available, and a provision that the company will furnish upon request an extension of the table beyond the years shown in the policy;
(11) A provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and not later than two (2) months after receipt of proof;
(12) A title on the face of the policy briefly describing its form;
(13) A provision that no agent shall have the power or authority to waive, change or alter any of the terms or conditions of any contract delivered or issued for delivery;
(14) A space on the front or back page of the policy for the name of the beneficiary designated, with a reservation of the right to designate or change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured. The policy may also contain a provision that if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than thirty (30) days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured or is not legally competent to give valid release, then the insurer may make payment under the policy to the executor or administrator of the insured, or to any of the insured's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled to the payment by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention or burial of the insured;
(15) A provision in policies issued after July 1, 1980, that after three (3) full years' premiums have been paid the company at any time while the policy is in force will advance on proper assignment of the policy and on the sole security of the policy, at a specified rate of interest, a sum equal to, or, at the option of the policyowner, less than the amount required by § 56-7-2309 under the conditions specified by § 56-7-2309 ; and that the company will deduct from the loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year; provided, that nothing in this subdivision (b)(15) shall require a policy loan in an amount less than twenty-five dollars ($25.00). It shall be further stipulated in the policy that failure to repay the advance or to pay interest shall not void the policy unless the total indebtedness on the policy to the company equals or exceeds the loan value at the time of the failure, nor until one (1) month after written notice has been mailed or otherwise delivered by the company to the last known address of the policyowner and of the assignee, if any. No condition other than as provided in this subdivision (b)(15) or in § 56-7-2309 shall be exacted as a prerequisite to the advance. This provision shall not be required in term insurances;
(16) A provision that all premiums shall be payable in advance either at the home office of the company or to any agent of the company upon delivery of a receipt signed by one (1) or more of the officers who shall be named in the policy;
(17) A provision stating clearly, understandably and conspicuously in substance that the policyowner shall be permitted to return it within a period of not less than ten (10) days of its delivery to the policyowner and to have the premium paid by the policyowner refunded if the policyowner so elects. If the policyowner returns the policy to the insurer, the policy shall be void from the beginning, the parties shall be in the same position as if no policy had been issued and the insurer shall promptly refund any premiums collected in connection with the policy;
(18) (A) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of their due date by not fewer than fifty-two (52) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures a refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least fifty-two (52) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that the insurer shall determine not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than fifty-two (52) weeks; (B) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of the due date of the premiums by not fewer than twenty-six (26) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; and provided, further, that nothing in this subsection (b) shall require the insurer to provide any discount in an amount of less than four dollars ($4.00); or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least twenty-six (26) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that shall be determined by the insurer not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than twenty-six (26) weeks; provided, that nothing in this subsection (b) shall require the insurer to provide any refund in an amount less than four dollars ($4.00).
(A) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of their due date by not fewer than fifty-two (52) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures a refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least fifty-two (52) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that the insurer shall determine not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than fifty-two (52) weeks;
(i) That if the policyowner pays in one (1) sum premiums in advance of their due date by not fewer than fifty-two (52) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures a refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; or
(ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least fifty-two (52) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that the insurer shall determine not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than fifty-two (52) weeks;
(B) One (1) of the following provisions: (i) That if the policyowner pays in one (1) sum premiums in advance of the due date of the premiums by not fewer than twenty-six (26) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; and provided, further, that nothing in this subsection (b) shall require the insurer to provide any discount in an amount of less than four dollars ($4.00); or (ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least twenty-six (26) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that shall be determined by the insurer not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than twenty-six (26) weeks; provided, that nothing in this subsection (b) shall require the insurer to provide any refund in an amount less than four dollars ($4.00).
(i) That if the policyowner pays in one (1) sum premiums in advance of the due date of the premiums by not fewer than twenty-six (26) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; and provided, further, that nothing in this subsection (b) shall require the insurer to provide any discount in an amount of less than four dollars ($4.00); or
(ii) That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least twenty-six (26) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that shall be determined by the insurer not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than twenty-six (26) weeks; provided, that nothing in this subsection (b) shall require the insurer to provide any refund in an amount less than four dollars ($4.00).
(c) Requirements and Prohibitions. (1) No insurer shall offer, sell, issue, or deliver within this state any small insurance policy unless and until there has been compliance as to the policy with each provision of this section and the regulations adopted pursuant to this section; (2) (A) No small insurance policy shall contain any of the provisions prohibited by § 56-7-2308 ; (B) No small insurance policy shall exclude or restrict the payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another; (3) Every small insurance policy shall be subject to the requirements of § 56-7-2311 , and as a part of the approval, the insurer shall be required to sustain the burden of satisfying the commissioner that the policy complies with this section. The commissioner shall disapprove any form if it contains provisions that are misleading, deceptive or encourage misrepresentation of the coverage or are contrary to this title or of any rule or regulation promulgated under this title; (4) Each of the optional benefits and charges provided under a small insurance policy shall be separately priced, and the prices shall be set forth in the policy in a clear, conspicuous and understandable manner; (5) No small insurance policy shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, or application be used in connection with the policy until a copy of the form and of the premium rates for the policy have been filed with the commissioner; (6) No insurer shall deliver a small policy in this state unless the company has first taken the written application of the insured or proposed policyowner on an application form theretofore approved by the commissioner. The application shall contain an acknowledgment by the applicant that the applicant has reviewed the life insurance program, disclosures by the applicant of the total face amount of insurance and the number of policies on the life of the applicant and the proposed insured, if the proposed insured is a person other than the applicant, and an acknowledgment that the applicant is aware of the relationship of the cost of the insurance program to the applicant's total income.
(1) No insurer shall offer, sell, issue, or deliver within this state any small insurance policy unless and until there has been compliance as to the policy with each provision of this section and the regulations adopted pursuant to this section;
(2) (A) No small insurance policy shall contain any of the provisions prohibited by § 56-7-2308 ; (B) No small insurance policy shall exclude or restrict the payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another;
(A) No small insurance policy shall contain any of the provisions prohibited by § 56-7-2308 ;
(B) No small insurance policy shall exclude or restrict the payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another;
(3) Every small insurance policy shall be subject to the requirements of § 56-7-2311 , and as a part of the approval, the insurer shall be required to sustain the burden of satisfying the commissioner that the policy complies with this section. The commissioner shall disapprove any form if it contains provisions that are misleading, deceptive or encourage misrepresentation of the coverage or are contrary to this title or of any rule or regulation promulgated under this title;
(4) Each of the optional benefits and charges provided under a small insurance policy shall be separately priced, and the prices shall be set forth in the policy in a clear, conspicuous and understandable manner;
(5) No small insurance policy shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, or application be used in connection with the policy until a copy of the form and of the premium rates for the policy have been filed with the commissioner;
(6) No insurer shall deliver a small policy in this state unless the company has first taken the written application of the insured or proposed policyowner on an application form theretofore approved by the commissioner. The application shall contain an acknowledgment by the applicant that the applicant has reviewed the life insurance program, disclosures by the applicant of the total face amount of insurance and the number of policies on the life of the applicant and the proposed insured, if the proposed insured is a person other than the applicant, and an acknowledgment that the applicant is aware of the relationship of the cost of the insurance program to the applicant's total income.
(d) Enforcement. (1) Any insurer who fails to comply with any requirement imposed under this section with respect to any person is liable to the person, in a private right of action, in an amount equal to the sum of: (A) Any actual damage sustained by the person as a result of the failure; and (B) The court may grant equitable and declaratory relief necessary to enforce the requirements of this section; (2) In addition to other applicable provisions, compliance with this section shall also be enforced by the commissioner. A violation of this section shall be punishable by a civil penalty not to exceed five hundred dollars ($500) for each offense; (3) The failure of an insurer to comply with this section shall not invalidate the policy, and the violation shall not provide a defense to the insurer as to any claim brought by the holder.
(1) Any insurer who fails to comply with any requirement imposed under this section with respect to any person is liable to the person, in a private right of action, in an amount equal to the sum of: (A) Any actual damage sustained by the person as a result of the failure; and (B) The court may grant equitable and declaratory relief necessary to enforce the requirements of this section;
(A) Any actual damage sustained by the person as a result of the failure; and
(B) The court may grant equitable and declaratory relief necessary to enforce the requirements of this section;
(2) In addition to other applicable provisions, compliance with this section shall also be enforced by the commissioner. A violation of this section shall be punishable by a civil penalty not to exceed five hundred dollars ($500) for each offense;
(3) The failure of an insurer to comply with this section shall not invalidate the policy, and the violation shall not provide a defense to the insurer as to any claim brought by the holder.
(e) Miscellaneous Provisions. (1) Approvals heretofore granted all small insurance policies filed and approved under § 56-7-2311 , or any predecessor, shall be withdrawn on April 1, 1980, and no policy form shall be issued after that date unless the policy has first been filed and approved in accordance with law; (2) When any small insurance policy provides for weekly premium payments, there may be a provision that upon proper notice to the insurer, while premiums on the policy are not in default beyond the grace period, of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for the purpose, the insurer will, at the end of each period of a year from the due date of the first premium so paid, for which period the premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount that fairly represents the savings in collection expense.
(1) Approvals heretofore granted all small insurance policies filed and approved under § 56-7-2311 , or any predecessor, shall be withdrawn on April 1, 1980, and no policy form shall be issued after that date unless the policy has first been filed and approved in accordance with law;
(2) When any small insurance policy provides for weekly premium payments, there may be a provision that upon proper notice to the insurer, while premiums on the policy are not in default beyond the grace period, of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for the purpose, the insurer will, at the end of each period of a year from the due date of the first premium so paid, for which period the premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount that fairly represents the savings in collection expense.
Acts 1945, ch. 27, § 2; mod. C. Supp. 1950, § 6447.2; Acts 1979, ch. 398, §§ 1-6; T.C.A. (orig. ed.), § 56-1129.
Tenn. Code Ann. § 56-42-109 — TN Code / Title 56 / Chapter 42 / Section 56-42-109
Producer training requirements
Status: in_force

(a) (1) An individual may not sell, solicit or negotiate long-term care insurance unless the individual is licensed as an insurance producer for accident and health or sickness or life and has completed a one-time, eight-hour training course. A person currently authorized to sell long-term care insurance may continue to sell the long-term care insurance after July 1, 2008, as long as the person completes a one-time, eight-hour training course by or before July 1, 2009. (2) The training requirements of subsection (b) may be approved as continuing education courses under § 56-6-107(c) and any rules promulgated under § 56-6-107(c) . (b) (1) Continuing education, as established by rule, may be required of all licensed producers who sell, solicit or negotiate long-term care insurance; provided, that they are not otherwise exempt from continuing education pursuant to § 56-6-107(c) . (2) The training required under subdivision (b)(1) shall consist of topics related to long-term care insurance, long-term care services and, if applicable, qualified state long-term care insurance partnership programs, including, but not limited to: (A) State and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including medicaid; (B) Available long-term services and providers; (C) Changes or improvements in long-term care services or providers; (D) Alternatives to the purchase of private long-term care insurance; (E) The effect of inflation on benefits and the importance of inflation protection; and (F) Consumer suitability standards and guidelines. (3) The training required by this section shall not include training that is insurer or company product specific or that includes any sales or marketing information, materials or training, other than those required by state or federal law. (c) (1) Insurers subject to this chapter shall: (A) Obtain verification that a producer receives training as required by subdivisions (a)(1) and (b)(1) prior to selling, soliciting or negotiating the insurer's long-term care insurance products; (B) Maintain a record of such verification subject to the state's record retention requirements; and (C) Make the record available to the commissioner upon request. (2) Insurers subject to this chapter shall maintain records with respect to the training of its producers concerning the distribution of its partnership policies that will allow the department to provide assurance to the state medicaid agency that producers have received the training contained in subdivision (b)(2)(A) as required by subdivision (a)(1), and that producers have demonstrated an understanding of the partnership policies and their relationship to public and private coverage of long-term care, including medicaid, in this state. These records shall be maintained in accordance with the state's record retention requirements and shall be made available to the commissioner upon request. (d) The satisfaction of these training requirements in any state shall be deemed to satisfy the training requirements in this state. Acts 2008, ch. 1058, § 12.
(a) (1) An individual may not sell, solicit or negotiate long-term care insurance unless the individual is licensed as an insurance producer for accident and health or sickness or life and has completed a one-time, eight-hour training course. A person currently authorized to sell long-term care insurance may continue to sell the long-term care insurance after July 1, 2008, as long as the person completes a one-time, eight-hour training course by or before July 1, 2009. (2) The training requirements of subsection (b) may be approved as continuing education courses under § 56-6-107(c) and any rules promulgated under § 56-6-107(c) .
(1) An individual may not sell, solicit or negotiate long-term care insurance unless the individual is licensed as an insurance producer for accident and health or sickness or life and has completed a one-time, eight-hour training course. A person currently authorized to sell long-term care insurance may continue to sell the long-term care insurance after July 1, 2008, as long as the person completes a one-time, eight-hour training course by or before July 1, 2009.
(2) The training requirements of subsection (b) may be approved as continuing education courses under § 56-6-107(c) and any rules promulgated under § 56-6-107(c) .
(b) (1) Continuing education, as established by rule, may be required of all licensed producers who sell, solicit or negotiate long-term care insurance; provided, that they are not otherwise exempt from continuing education pursuant to § 56-6-107(c) . (2) The training required under subdivision (b)(1) shall consist of topics related to long-term care insurance, long-term care services and, if applicable, qualified state long-term care insurance partnership programs, including, but not limited to: (A) State and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including medicaid; (B) Available long-term services and providers; (C) Changes or improvements in long-term care services or providers; (D) Alternatives to the purchase of private long-term care insurance; (E) The effect of inflation on benefits and the importance of inflation protection; and (F) Consumer suitability standards and guidelines. (3) The training required by this section shall not include training that is insurer or company product specific or that includes any sales or marketing information, materials or training, other than those required by state or federal law.
(1) Continuing education, as established by rule, may be required of all licensed producers who sell, solicit or negotiate long-term care insurance; provided, that they are not otherwise exempt from continuing education pursuant to § 56-6-107(c) .
(2) The training required under subdivision (b)(1) shall consist of topics related to long-term care insurance, long-term care services and, if applicable, qualified state long-term care insurance partnership programs, including, but not limited to: (A) State and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including medicaid; (B) Available long-term services and providers; (C) Changes or improvements in long-term care services or providers; (D) Alternatives to the purchase of private long-term care insurance; (E) The effect of inflation on benefits and the importance of inflation protection; and (F) Consumer suitability standards and guidelines.
(A) State and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including medicaid;
(B) Available long-term services and providers;
(C) Changes or improvements in long-term care services or providers;
(D) Alternatives to the purchase of private long-term care insurance;
(E) The effect of inflation on benefits and the importance of inflation protection; and
(F) Consumer suitability standards and guidelines.
(3) The training required by this section shall not include training that is insurer or company product specific or that includes any sales or marketing information, materials or training, other than those required by state or federal law.
(c) (1) Insurers subject to this chapter shall: (A) Obtain verification that a producer receives training as required by subdivisions (a)(1) and (b)(1) prior to selling, soliciting or negotiating the insurer's long-term care insurance products; (B) Maintain a record of such verification subject to the state's record retention requirements; and (C) Make the record available to the commissioner upon request. (2) Insurers subject to this chapter shall maintain records with respect to the training of its producers concerning the distribution of its partnership policies that will allow the department to provide assurance to the state medicaid agency that producers have received the training contained in subdivision (b)(2)(A) as required by subdivision (a)(1), and that producers have demonstrated an understanding of the partnership policies and their relationship to public and private coverage of long-term care, including medicaid, in this state. These records shall be maintained in accordance with the state's record retention requirements and shall be made available to the commissioner upon request.
(1) Insurers subject to this chapter shall: (A) Obtain verification that a producer receives training as required by subdivisions (a)(1) and (b)(1) prior to selling, soliciting or negotiating the insurer's long-term care insurance products; (B) Maintain a record of such verification subject to the state's record retention requirements; and (C) Make the record available to the commissioner upon request.
(A) Obtain verification that a producer receives training as required by subdivisions (a)(1) and (b)(1) prior to selling, soliciting or negotiating the insurer's long-term care insurance products;
(B) Maintain a record of such verification subject to the state's record retention requirements; and
(C) Make the record available to the commissioner upon request.
(2) Insurers subject to this chapter shall maintain records with respect to the training of its producers concerning the distribution of its partnership policies that will allow the department to provide assurance to the state medicaid agency that producers have received the training contained in subdivision (b)(2)(A) as required by subdivision (a)(1), and that producers have demonstrated an understanding of the partnership policies and their relationship to public and private coverage of long-term care, including medicaid, in this state. These records shall be maintained in accordance with the state's record retention requirements and shall be made available to the commissioner upon request.
(d) The satisfaction of these training requirements in any state shall be deemed to satisfy the training requirements in this state.
Acts 2008, ch. 1058, § 12.
Tenn. Code Ann. § 56-60-101 — TN Code / Title 56 / Chapter 60 / Section 56-60-101
Short title
Status: in_force

This chapter shall be known and may be cited as the "Preferred Provider Organization Transparency Act." Acts 2009, ch. 466, § 2.
This chapter shall be known and may be cited as the "Preferred Provider Organization Transparency Act."
Acts 2009, ch. 466, § 2.