Tenn. Code Ann. § 56-7-2902 — TN Code / Title 56 / Chapter 7 / Section 56-7-2902
[For postponed repeal effective 6/30/2025, see T.C.A. 56-7-2916] Part definitions
Status: in_force

As used in this part, unless the context otherwise requires: (1) "Access Tennessee" means the nonprofit entity created pursuant to § 56-7-2903(a) ; (2) "Board" means the Access Tennessee board of directors established pursuant to § 56-7-2903(b) ; (3) "Church plan" has the meaning given the term under ERISA, in 29 U.S.C. § 1002(33) ; (4) "COBRA continuation coverage" refers to continuation of coverage offered pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ( 42 U.S.C. § 300bb-1 et seq.); (5) "Commissioner" means the commissioner of finance and administration; (6) (A) "Creditable coverage" means, with respect to an individual, coverage of the individual that provides the minimum essential coverage required under 26 U.S.C. § 5000A ; (B) A period of creditable coverage shall not be counted, with respect to the enrollment of an individual who seeks coverage under this part, if, after the period and before the enrollment date, the individual experiences a significant break in coverage; (7) "Department" means the department of finance and administration; (8) "ERISA" means the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. § 1001 et seq.); (9) "Federally defined eligible individual" means an individual: (A) For whom, as of the date on which the individual seeks coverage under this part, the aggregate of the periods of creditable coverage is eighteen (18) or more months; (B) Whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan, or plan described in § 56-2-121(a) , or health insurance coverage offered in connection with the plan; (C) Who is not eligible for coverage under a group health plan, medicare, medicaid, or any successor program, and who does not have other health insurance coverage; (D) With respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud; (E) Who, if offered the option of continuation of coverage under a COBRA continuation coverage provision or under a similar state program, elected the coverage; and (F) Who has exhausted the continuation coverage described in subdivision (9)(E); (10) "Fund" means the Access Tennessee health insurance program fund established by § 56-7-2911(d) ; (11) "Governmental plan" has the meaning under ERISA, in 29 U.S.C. § 1002(32) ; (12) "Group health plan" means an employee welfare benefit plan as defined in ERISA, in 29 U.S.C. § 1002(1) , to the extent that the plan provides medical care, as defined in subdivision (19), and including items and services paid for as medical care to employees or their dependents as defined under the terms of the plan directly or through insurance, reimbursement or otherwise; (13) (A) "Health insurance coverage" means any hospital and medical expense incurred policy, nonprofit health care service plan contract, health maintenance organization subscriber contract, or any other health care plan or arrangement that pays for or furnishes medical or health care services, whether by insurance or otherwise; (B) "Health insurance coverage" shall not include one (1) or more, or any combination of, the following: (i) Coverage only for accident or disability income insurance, or any combination of accident and disability income insurance; (ii) Coverage issued as a supplement to liability insurance; (iii) Liability insurance, including general liability insurance and automobile liability insurance; (iv) Workers' compensation or similar insurance; (v) Automobile medical payment insurance; (vi) Credit-only insurance; (vii) Coverage for on-site medical clinics; and (viii) Other similar insurance coverage, specified in federal regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) ( 42 U.S.C. § 1320d et seq.), under which benefits for medical care are secondary or incidental to other insurance benefits; (C) "Health insurance coverage" shall not include the following benefits, if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the coverage: (i) Limited scope dental or vision benefits; (ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or (iii) Other similar, limited benefits specified in federal regulations issued pursuant to HIPAA; (D) "Health insurance coverage" shall not include the following benefits, if the benefits are provided under a separate policy, certificate or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor: (i) Coverage only for a specified disease or illness; or (ii) Hospital indemnity or other fixed indemnity insurance; and (E) "Health insurance coverage" shall not include the following, if offered as a separate policy, certificate or contract of insurance: (i) Medicare supplemental health insurance, as defined under § 1882(g)(1) of the Social Security Act ( 42 U.S.C. § 1395ss(g)(1) ); (ii) Coverage supplemental to the coverage provided under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) ( 10 U.S.C. § 1071 et seq.); or (iii) Similar supplemental coverage provided to coverage under a group health plan; (14) "Health maintenance organization" means an organization as defined in § 56-32-102 ; (15) "Hospital" means a licensed public or private institution as defined in § 68-11-201 ; (16) "Insurance arrangement" means, to the extent permitted by ERISA, any plan, program, contract or other arrangement under which one (1) or more employers, unions or other organizations provide to their employees or members, either directly or indirectly through a trust or third party administration, health care services or benefits other than through an insurer, and shall include any plan described in § 56-2-121(a) ; (17) "Insurer" means any entity that provides health insurance coverage in this state. For the purposes of this part, insurer includes, but is not limited to, an insurance company, a health maintenance organization, a preferred provider organization, a hospital and medical service corporation, a surplus lines insurer, an insurer providing stop-loss or excess loss insurance to a group health plan, a reinsurer reinsuring health insurance in this state, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation; (18) "Medicaid" means the federal- and state-financed, state-run program of medical assistance established pursuant to Title XIX of the Social Security Act ( 42 U.S.C. § 1396 et seq.), and any waivers thereof; (19) "Medical care" means: (A) The diagnosis, care, mitigation, treatment, or prevention of disease; (B) Transportation primarily for and essential to medical care referred to in subdivision (19)(A); and (C) Insurance covering medical care referred to in subdivisions (19)(A) and (B); (20) "Medicare" means coverage under Parts A and/or B of Title XVIII of the Social Security Act ( 42 U.S.C. § 1395 et seq.); (21) "Plan of operation" means the articles, bylaws, and operating rules and procedures adopted by the board pursuant to § 56-7-2903(i) ; (22) "Program" means the Access Tennessee health insurance program, created in § 56-7-2903(a) ; (23) "Resident" means an individual who is legally domiciled in Tennessee; (24) "Significant break in coverage" means a period of sixty-three (63) consecutive days during all of which the individual does not have any creditable coverage, except that neither a waiting period nor an affiliation period is taken into account in determining a significant break in coverage; (25) "Third party administrator" means any entity that, on behalf of an insurer or insurance arrangement, provides health insurance coverage to individuals in this state, receives or collects charges, contributions or premiums for, or adjudicates, processes or settles claims in connection with, any type of health benefit provided in or as an alternative to health insurance coverage; and (26) "Unfair referral" means a referral to the program described in § 56-7-2908(h) . Amended by 2015 Tenn. Acts, ch. 185, s 2, eff. 4/22/2015. Acts 2006, ch. 867, §§ 3, 14.
As used in this part, unless the context otherwise requires:
(1) "Access Tennessee" means the nonprofit entity created pursuant to § 56-7-2903(a) ;
(2) "Board" means the Access Tennessee board of directors established pursuant to § 56-7-2903(b) ;
(3) "Church plan" has the meaning given the term under ERISA, in 29 U.S.C. § 1002(33) ;
(4) "COBRA continuation coverage" refers to continuation of coverage offered pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 ( 42 U.S.C. § 300bb-1 et seq.);
(5) "Commissioner" means the commissioner of finance and administration;
(6) (A) "Creditable coverage" means, with respect to an individual, coverage of the individual that provides the minimum essential coverage required under 26 U.S.C. § 5000A ; (B) A period of creditable coverage shall not be counted, with respect to the enrollment of an individual who seeks coverage under this part, if, after the period and before the enrollment date, the individual experiences a significant break in coverage;
(A) "Creditable coverage" means, with respect to an individual, coverage of the individual that provides the minimum essential coverage required under 26 U.S.C. § 5000A ;
(B) A period of creditable coverage shall not be counted, with respect to the enrollment of an individual who seeks coverage under this part, if, after the period and before the enrollment date, the individual experiences a significant break in coverage;
(7) "Department" means the department of finance and administration;
(8) "ERISA" means the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. § 1001 et seq.);
(9) "Federally defined eligible individual" means an individual: (A) For whom, as of the date on which the individual seeks coverage under this part, the aggregate of the periods of creditable coverage is eighteen (18) or more months; (B) Whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan, or plan described in § 56-2-121(a) , or health insurance coverage offered in connection with the plan; (C) Who is not eligible for coverage under a group health plan, medicare, medicaid, or any successor program, and who does not have other health insurance coverage; (D) With respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud; (E) Who, if offered the option of continuation of coverage under a COBRA continuation coverage provision or under a similar state program, elected the coverage; and (F) Who has exhausted the continuation coverage described in subdivision (9)(E);
(A) For whom, as of the date on which the individual seeks coverage under this part, the aggregate of the periods of creditable coverage is eighteen (18) or more months;
(B) Whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan, or plan described in § 56-2-121(a) , or health insurance coverage offered in connection with the plan;
(C) Who is not eligible for coverage under a group health plan, medicare, medicaid, or any successor program, and who does not have other health insurance coverage;
(D) With respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud;
(E) Who, if offered the option of continuation of coverage under a COBRA continuation coverage provision or under a similar state program, elected the coverage; and
(F) Who has exhausted the continuation coverage described in subdivision (9)(E);
(10) "Fund" means the Access Tennessee health insurance program fund established by § 56-7-2911(d) ;
(11) "Governmental plan" has the meaning under ERISA, in 29 U.S.C. § 1002(32) ;
(12) "Group health plan" means an employee welfare benefit plan as defined in ERISA, in 29 U.S.C. § 1002(1) , to the extent that the plan provides medical care, as defined in subdivision (19), and including items and services paid for as medical care to employees or their dependents as defined under the terms of the plan directly or through insurance, reimbursement or otherwise;
(13) (A) "Health insurance coverage" means any hospital and medical expense incurred policy, nonprofit health care service plan contract, health maintenance organization subscriber contract, or any other health care plan or arrangement that pays for or furnishes medical or health care services, whether by insurance or otherwise; (B) "Health insurance coverage" shall not include one (1) or more, or any combination of, the following: (i) Coverage only for accident or disability income insurance, or any combination of accident and disability income insurance; (ii) Coverage issued as a supplement to liability insurance; (iii) Liability insurance, including general liability insurance and automobile liability insurance; (iv) Workers' compensation or similar insurance; (v) Automobile medical payment insurance; (vi) Credit-only insurance; (vii) Coverage for on-site medical clinics; and (viii) Other similar insurance coverage, specified in federal regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) ( 42 U.S.C. § 1320d et seq.), under which benefits for medical care are secondary or incidental to other insurance benefits; (C) "Health insurance coverage" shall not include the following benefits, if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the coverage: (i) Limited scope dental or vision benefits; (ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or (iii) Other similar, limited benefits specified in federal regulations issued pursuant to HIPAA; (D) "Health insurance coverage" shall not include the following benefits, if the benefits are provided under a separate policy, certificate or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor: (i) Coverage only for a specified disease or illness; or (ii) Hospital indemnity or other fixed indemnity insurance; and (E) "Health insurance coverage" shall not include the following, if offered as a separate policy, certificate or contract of insurance: (i) Medicare supplemental health insurance, as defined under § 1882(g)(1) of the Social Security Act ( 42 U.S.C. § 1395ss(g)(1) ); (ii) Coverage supplemental to the coverage provided under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) ( 10 U.S.C. § 1071 et seq.); or (iii) Similar supplemental coverage provided to coverage under a group health plan;
(A) "Health insurance coverage" means any hospital and medical expense incurred policy, nonprofit health care service plan contract, health maintenance organization subscriber contract, or any other health care plan or arrangement that pays for or furnishes medical or health care services, whether by insurance or otherwise;
(B) "Health insurance coverage" shall not include one (1) or more, or any combination of, the following: (i) Coverage only for accident or disability income insurance, or any combination of accident and disability income insurance; (ii) Coverage issued as a supplement to liability insurance; (iii) Liability insurance, including general liability insurance and automobile liability insurance; (iv) Workers' compensation or similar insurance; (v) Automobile medical payment insurance; (vi) Credit-only insurance; (vii) Coverage for on-site medical clinics; and (viii) Other similar insurance coverage, specified in federal regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) ( 42 U.S.C. § 1320d et seq.), under which benefits for medical care are secondary or incidental to other insurance benefits;
(i) Coverage only for accident or disability income insurance, or any combination of accident and disability income insurance;
(ii) Coverage issued as a supplement to liability insurance;
(iii) Liability insurance, including general liability insurance and automobile liability insurance;
(iv) Workers' compensation or similar insurance;
(v) Automobile medical payment insurance;
(vi) Credit-only insurance;
(vii) Coverage for on-site medical clinics; and
(viii) Other similar insurance coverage, specified in federal regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) ( 42 U.S.C. § 1320d et seq.), under which benefits for medical care are secondary or incidental to other insurance benefits;
(C) "Health insurance coverage" shall not include the following benefits, if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the coverage: (i) Limited scope dental or vision benefits; (ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or (iii) Other similar, limited benefits specified in federal regulations issued pursuant to HIPAA;
(i) Limited scope dental or vision benefits;
(ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or
(iii) Other similar, limited benefits specified in federal regulations issued pursuant to HIPAA;
(D) "Health insurance coverage" shall not include the following benefits, if the benefits are provided under a separate policy, certificate or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor: (i) Coverage only for a specified disease or illness; or (ii) Hospital indemnity or other fixed indemnity insurance; and
(i) Coverage only for a specified disease or illness; or
(ii) Hospital indemnity or other fixed indemnity insurance; and
(E) "Health insurance coverage" shall not include the following, if offered as a separate policy, certificate or contract of insurance: (i) Medicare supplemental health insurance, as defined under § 1882(g)(1) of the Social Security Act ( 42 U.S.C. § 1395ss(g)(1) ); (ii) Coverage supplemental to the coverage provided under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) ( 10 U.S.C. § 1071 et seq.); or (iii) Similar supplemental coverage provided to coverage under a group health plan;
(i) Medicare supplemental health insurance, as defined under § 1882(g)(1) of the Social Security Act ( 42 U.S.C. § 1395ss(g)(1) );
(ii) Coverage supplemental to the coverage provided under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) ( 10 U.S.C. § 1071 et seq.); or
(iii) Similar supplemental coverage provided to coverage under a group health plan;
(14) "Health maintenance organization" means an organization as defined in § 56-32-102 ;
(15) "Hospital" means a licensed public or private institution as defined in § 68-11-201 ;
(16) "Insurance arrangement" means, to the extent permitted by ERISA, any plan, program, contract or other arrangement under which one (1) or more employers, unions or other organizations provide to their employees or members, either directly or indirectly through a trust or third party administration, health care services or benefits other than through an insurer, and shall include any plan described in § 56-2-121(a) ;
(17) "Insurer" means any entity that provides health insurance coverage in this state. For the purposes of this part, insurer includes, but is not limited to, an insurance company, a health maintenance organization, a preferred provider organization, a hospital and medical service corporation, a surplus lines insurer, an insurer providing stop-loss or excess loss insurance to a group health plan, a reinsurer reinsuring health insurance in this state, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation;
(18) "Medicaid" means the federal- and state-financed, state-run program of medical assistance established pursuant to Title XIX of the Social Security Act ( 42 U.S.C. § 1396 et seq.), and any waivers thereof;
(19) "Medical care" means: (A) The diagnosis, care, mitigation, treatment, or prevention of disease; (B) Transportation primarily for and essential to medical care referred to in subdivision (19)(A); and (C) Insurance covering medical care referred to in subdivisions (19)(A) and (B);
(A) The diagnosis, care, mitigation, treatment, or prevention of disease;
(B) Transportation primarily for and essential to medical care referred to in subdivision (19)(A); and
(C) Insurance covering medical care referred to in subdivisions (19)(A) and (B);
(20) "Medicare" means coverage under Parts A and/or B of Title XVIII of the Social Security Act ( 42 U.S.C. § 1395 et seq.);
(21) "Plan of operation" means the articles, bylaws, and operating rules and procedures adopted by the board pursuant to § 56-7-2903(i) ;
(22) "Program" means the Access Tennessee health insurance program, created in § 56-7-2903(a) ;
(23) "Resident" means an individual who is legally domiciled in Tennessee;
(24) "Significant break in coverage" means a period of sixty-three (63) consecutive days during all of which the individual does not have any creditable coverage, except that neither a waiting period nor an affiliation period is taken into account in determining a significant break in coverage;
(25) "Third party administrator" means any entity that, on behalf of an insurer or insurance arrangement, provides health insurance coverage to individuals in this state, receives or collects charges, contributions or premiums for, or adjudicates, processes or settles claims in connection with, any type of health benefit provided in or as an alternative to health insurance coverage; and
(26) "Unfair referral" means a referral to the program described in § 56-7-2908(h) .
Amended by 2015 Tenn. Acts, ch. 185, s 2, eff. 4/22/2015.
Acts 2006, ch. 867, §§ 3, 14.
Tenn. Code Ann. § 56-2-403 — TN Code / Title 56 / Chapter 2 / Section 56-2-403
Penalty for violations
Status: in_force

Any insurance company or other insurance entity that is financially owned or financially controlled by any alien or foreign government outside the continental limits of the United States or the territories of the United States, or any representative or agent of the company or entity, that violates §§ 56-2-401 , 56-2-402 , this section and § 56-2-404 , commits a Class C misdemeanor. Acts 1955, ch. 3, § 3; T.C.A., §§ 56-325, 56-230; Acts 1989, ch. 591, § 113.
Any insurance company or other insurance entity that is financially owned or financially controlled by any alien or foreign government outside the continental limits of the United States or the territories of the United States, or any representative or agent of the company or entity, that violates §§ 56-2-401 , 56-2-402 , this section and § 56-2-404 , commits a Class C misdemeanor.
Acts 1955, ch. 3, § 3; T.C.A., §§ 56-325, 56-230; Acts 1989, ch. 591, § 113.
Tenn. Code Ann. § 56-9-326 — TN Code / Title 56 / Chapter 9 / Section 56-9-326
Third party actions against insureds - Claims by insured - Allowance of claim by insured - Multiple claims under one policy
Status: in_force

(a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator. (b) Whether or not the third party files a claim, the insured may file a claim on the insured's own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within sixty (60) days after mailing of the notice required by § 56-9-311 , whichever is later, the insured is an unexcused late filer. (c) (1) The liquidator shall make the liquidator's recommendations to the court under § 56-9-331 , for the allowance of an insured's claim under subsection (b) after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, the liquidator shall reconsider the claim on the basis of additional information and amend the liquidator's recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. (2) (A) The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of: (i) The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense; or (ii) The amount allowed on the claims by the court. (B) After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection (c) is not a reason for unreasonable delay of final distribution and discharge of the liquidator. (d) If several claims founded upon one (1) policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection (c). If any insured's claim is subsequently reduced under subsection (c), the amount thus freed shall be apportioned ratably among the claims that have been reduced under this subsection (d). (e) No claim may be presented under this section if it is or may be covered by any guaranty association or foreign guaranty association. Acts 1991, ch. 142, § 4.
(a) Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.
(b) Whether or not the third party files a claim, the insured may file a claim on the insured's own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within sixty (60) days after mailing of the notice required by § 56-9-311 , whichever is later, the insured is an unexcused late filer.
(c) (1) The liquidator shall make the liquidator's recommendations to the court under § 56-9-331 , for the allowance of an insured's claim under subsection (b) after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, the liquidator shall reconsider the claim on the basis of additional information and amend the liquidator's recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination. (2) (A) The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of: (i) The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense; or (ii) The amount allowed on the claims by the court. (B) After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection (c) is not a reason for unreasonable delay of final distribution and discharge of the liquidator.
(1) The liquidator shall make the liquidator's recommendations to the court under § 56-9-331 , for the allowance of an insured's claim under subsection (b) after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, the liquidator shall reconsider the claim on the basis of additional information and amend the liquidator's recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination.
(2) (A) The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of: (i) The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense; or (ii) The amount allowed on the claims by the court. (B) After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection (c) is not a reason for unreasonable delay of final distribution and discharge of the liquidator.
(A) The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of: (i) The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense; or (ii) The amount allowed on the claims by the court.
(i) The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense; or
(ii) The amount allowed on the claims by the court.
(B) After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection (c) is not a reason for unreasonable delay of final distribution and discharge of the liquidator.
(d) If several claims founded upon one (1) policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection (c). If any insured's claim is subsequently reduced under subsection (c), the amount thus freed shall be apportioned ratably among the claims that have been reduced under this subsection (d).
(e) No claim may be presented under this section if it is or may be covered by any guaranty association or foreign guaranty association.
Acts 1991, ch. 142, § 4.
Tenn. Code Ann. § 56-61-121 — TN Code / Title 56 / Chapter 61 / Section 56-61-121
Minimum qualifications for independent review organizations
Status: in_force

(a) To be approved under § 56-61-120 to conduct external reviews, an external review organization shall have and maintain written policies and procedures that govern all aspects of both the standard external review process and the expedited external review process set forth in this chapter that include, at a minimum: (1) A quality assurance mechanism in place that: (A) Ensures that external reviews are conducted within the specified timeframes and required notices are provided in a timely manner; (B) Ensures the selection of qualified and impartial clinical reviewers to conduct external reviews on behalf of the external review organization; suitable matching of reviewers to specific cases; and that the independent review organization employs or contracts with an adequate number of clinical reviewers to meet this objective; (C) Ensures the confidentiality of medical and treatment records and clinical review criteria; and (D) Ensures that any person employed by or under contract with the external review organization adheres to the requirements of this chapter; (2) A toll-free telephone service to receive information on a twenty-four-hour a day, seven-day a week basis related to external reviews that is capable of accepting, recording or providing appropriate instruction to incoming telephone callers during hours outside of normal business hours; and (3) Agree to maintain and provide to the commissioner the information set out in § 56-61-125 . (b) All clinical reviewers assigned by an external review organization to conduct external reviews shall be physicians or other appropriate healthcare providers who meet the following minimum qualifications: (1) Be an expert in the treatment of the covered person's medical condition that is the subject of the external review; (2) Be knowledgeable about the recommended healthcare service or treatment through recent or current actual clinical experience treating patients with the same or similar medical condition of the covered person; (3) Hold a nonrestricted license in a state of the United States and, for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the subject of the external review; and (4) Have no history of disciplinary actions or sanctions, including loss of staff privileges or participation restrictions, that have been taken or are pending by any hospital, governmental agency or unit, or regulatory body that raise a substantial question as to the clinical reviewer's physical, mental or professional competence or moral character. (c) In addition to the requirements set forth in subsection (a), an external review organization may not own or control, be a subsidiary of or in any way be owned or controlled by, or exercise control with a health benefit plan, a national, state or local trade association of health benefit plans, or a national, state or local trade association of healthcare providers. (d) In addition to the requirements set forth in subsections (a), (b) and (c), to be approved pursuant to § 56-61-122 to conduct an external review of a specified case, neither the external review organization selected to conduct the external review nor any clinical reviewer assigned by the external organization to conduct the external review may have a material professional, familial or financial conflict of interest with any of the following: (1) The health carrier that is the subject of the external review; (2) The covered person whose treatment is the subject of the external review or the covered person's authorized representative; (3) Any officer, director or management employee of the health carrier that is the subject of the external review; (4) The healthcare provider, the healthcare provider's medical group or independent practice association recommending the healthcare service or treatment that is the subject of the external review; (5) The facility at which the recommended healthcare service or treatment would be provided; or (6) The developer or manufacturer of the principal drug, device, procedure or other therapy being recommended for the covered person whose treatment is the subject of the external review. (e) In determining whether an external review organization or a clinical reviewer of the external review organization has a material professional, familial or financial conflict of interest for purposes of subsection (d), the commissioner shall take into consideration situations where the external review organization conducting an external review of a specified case or a clinical reviewer to be assigned by the external review organization to conduct an external review of a specified case may have an apparent professional, familial or financial relationship or connection with a person described in subsection (d), but that the characteristics of that relationship or connection are such that they are not a material professional, familial or financial conflict of interest that results in the disapproval of the independent review organization or the clinical reviewer from conducting the external review. (f) An external review organization that is accredited by a nationally recognized private accrediting entity that has external review accreditation standards that the commissioner has determined are equivalent to or exceed the minimum qualifications of this section shall be presumed in compliance with this section to be eligible for approval under § 56-61-122 . (g) The commissioner shall initially review and periodically review the external review organization accreditation standards of a nationally recognized private accrediting entity to determine whether the entity's standards are, and continue to be, equivalent to or exceed the minimum qualifications established under this section. The commissioner may accept a review conducted by NAIC for the purpose of the determination under this subsection (g). (h) Upon request, a nationally recognized private accrediting entity shall make its current external review organization accreditation standards available to the commissioner or NAIC in order for the commissioner to determine if the entity's standards are equivalent to or exceed the minimum qualifications established under this section. The commissioner may exclude any private accrediting entity that is not reviewed by NAIC. (i) An external review organization shall be unbiased. An external review organization shall establish and maintain written procedures to ensure that it is and remains unbiased in addition to any other procedures required under this section. Acts 2010, ch. 980, § 22.
(a) To be approved under § 56-61-120 to conduct external reviews, an external review organization shall have and maintain written policies and procedures that govern all aspects of both the standard external review process and the expedited external review process set forth in this chapter that include, at a minimum: (1) A quality assurance mechanism in place that: (A) Ensures that external reviews are conducted within the specified timeframes and required notices are provided in a timely manner; (B) Ensures the selection of qualified and impartial clinical reviewers to conduct external reviews on behalf of the external review organization; suitable matching of reviewers to specific cases; and that the independent review organization employs or contracts with an adequate number of clinical reviewers to meet this objective; (C) Ensures the confidentiality of medical and treatment records and clinical review criteria; and (D) Ensures that any person employed by or under contract with the external review organization adheres to the requirements of this chapter; (2) A toll-free telephone service to receive information on a twenty-four-hour a day, seven-day a week basis related to external reviews that is capable of accepting, recording or providing appropriate instruction to incoming telephone callers during hours outside of normal business hours; and (3) Agree to maintain and provide to the commissioner the information set out in § 56-61-125 .
(1) A quality assurance mechanism in place that: (A) Ensures that external reviews are conducted within the specified timeframes and required notices are provided in a timely manner; (B) Ensures the selection of qualified and impartial clinical reviewers to conduct external reviews on behalf of the external review organization; suitable matching of reviewers to specific cases; and that the independent review organization employs or contracts with an adequate number of clinical reviewers to meet this objective; (C) Ensures the confidentiality of medical and treatment records and clinical review criteria; and (D) Ensures that any person employed by or under contract with the external review organization adheres to the requirements of this chapter;
(A) Ensures that external reviews are conducted within the specified timeframes and required notices are provided in a timely manner;
(B) Ensures the selection of qualified and impartial clinical reviewers to conduct external reviews on behalf of the external review organization; suitable matching of reviewers to specific cases; and that the independent review organization employs or contracts with an adequate number of clinical reviewers to meet this objective;
(C) Ensures the confidentiality of medical and treatment records and clinical review criteria; and
(D) Ensures that any person employed by or under contract with the external review organization adheres to the requirements of this chapter;
(2) A toll-free telephone service to receive information on a twenty-four-hour a day, seven-day a week basis related to external reviews that is capable of accepting, recording or providing appropriate instruction to incoming telephone callers during hours outside of normal business hours; and
(3) Agree to maintain and provide to the commissioner the information set out in § 56-61-125 .
(b) All clinical reviewers assigned by an external review organization to conduct external reviews shall be physicians or other appropriate healthcare providers who meet the following minimum qualifications: (1) Be an expert in the treatment of the covered person's medical condition that is the subject of the external review; (2) Be knowledgeable about the recommended healthcare service or treatment through recent or current actual clinical experience treating patients with the same or similar medical condition of the covered person; (3) Hold a nonrestricted license in a state of the United States and, for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the subject of the external review; and (4) Have no history of disciplinary actions or sanctions, including loss of staff privileges or participation restrictions, that have been taken or are pending by any hospital, governmental agency or unit, or regulatory body that raise a substantial question as to the clinical reviewer's physical, mental or professional competence or moral character.
(1) Be an expert in the treatment of the covered person's medical condition that is the subject of the external review;
(2) Be knowledgeable about the recommended healthcare service or treatment through recent or current actual clinical experience treating patients with the same or similar medical condition of the covered person;
(3) Hold a nonrestricted license in a state of the United States and, for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the subject of the external review; and
(4) Have no history of disciplinary actions or sanctions, including loss of staff privileges or participation restrictions, that have been taken or are pending by any hospital, governmental agency or unit, or regulatory body that raise a substantial question as to the clinical reviewer's physical, mental or professional competence or moral character.
(c) In addition to the requirements set forth in subsection (a), an external review organization may not own or control, be a subsidiary of or in any way be owned or controlled by, or exercise control with a health benefit plan, a national, state or local trade association of health benefit plans, or a national, state or local trade association of healthcare providers.
(d) In addition to the requirements set forth in subsections (a), (b) and (c), to be approved pursuant to § 56-61-122 to conduct an external review of a specified case, neither the external review organization selected to conduct the external review nor any clinical reviewer assigned by the external organization to conduct the external review may have a material professional, familial or financial conflict of interest with any of the following: (1) The health carrier that is the subject of the external review; (2) The covered person whose treatment is the subject of the external review or the covered person's authorized representative; (3) Any officer, director or management employee of the health carrier that is the subject of the external review; (4) The healthcare provider, the healthcare provider's medical group or independent practice association recommending the healthcare service or treatment that is the subject of the external review; (5) The facility at which the recommended healthcare service or treatment would be provided; or (6) The developer or manufacturer of the principal drug, device, procedure or other therapy being recommended for the covered person whose treatment is the subject of the external review.
(1) The health carrier that is the subject of the external review;
(2) The covered person whose treatment is the subject of the external review or the covered person's authorized representative;
(3) Any officer, director or management employee of the health carrier that is the subject of the external review;
(4) The healthcare provider, the healthcare provider's medical group or independent practice association recommending the healthcare service or treatment that is the subject of the external review;
(5) The facility at which the recommended healthcare service or treatment would be provided; or
(6) The developer or manufacturer of the principal drug, device, procedure or other therapy being recommended for the covered person whose treatment is the subject of the external review.
(e) In determining whether an external review organization or a clinical reviewer of the external review organization has a material professional, familial or financial conflict of interest for purposes of subsection (d), the commissioner shall take into consideration situations where the external review organization conducting an external review of a specified case or a clinical reviewer to be assigned by the external review organization to conduct an external review of a specified case may have an apparent professional, familial or financial relationship or connection with a person described in subsection (d), but that the characteristics of that relationship or connection are such that they are not a material professional, familial or financial conflict of interest that results in the disapproval of the independent review organization or the clinical reviewer from conducting the external review.
(f) An external review organization that is accredited by a nationally recognized private accrediting entity that has external review accreditation standards that the commissioner has determined are equivalent to or exceed the minimum qualifications of this section shall be presumed in compliance with this section to be eligible for approval under § 56-61-122 .
(g) The commissioner shall initially review and periodically review the external review organization accreditation standards of a nationally recognized private accrediting entity to determine whether the entity's standards are, and continue to be, equivalent to or exceed the minimum qualifications established under this section. The commissioner may accept a review conducted by NAIC for the purpose of the determination under this subsection (g).
(h) Upon request, a nationally recognized private accrediting entity shall make its current external review organization accreditation standards available to the commissioner or NAIC in order for the commissioner to determine if the entity's standards are equivalent to or exceed the minimum qualifications established under this section. The commissioner may exclude any private accrediting entity that is not reviewed by NAIC.
(i) An external review organization shall be unbiased. An external review organization shall establish and maintain written procedures to ensure that it is and remains unbiased in addition to any other procedures required under this section.
Acts 2010, ch. 980, § 22.
Tenn. Code Ann. § 56-42-110 — TN Code / Title 56 / Chapter 42 / Section 56-42-110
Duties of commissioner - Rules and regulations
Status: in_force

The commissioner shall issue reasonable regulations for the administration and enforcement of this chapter, including, but not limited to, rules to promote premium adequacy and to protect the policyholder in the event of substantial rate increases, and to establish minimum standards for producer education, marketing practices, producer compensation, producer testing, penalties and reporting practices for long-term care insurance. Acts 2008, ch. 1058, § 13.
The commissioner shall issue reasonable regulations for the administration and enforcement of this chapter, including, but not limited to, rules to promote premium adequacy and to protect the policyholder in the event of substantial rate increases, and to establish minimum standards for producer education, marketing practices, producer compensation, producer testing, penalties and reporting practices for long-term care insurance.
Acts 2008, ch. 1058, § 13.
Tenn. Code Ann. § 56-6-1305 — TN Code / Title 56 / Chapter 6 / Section 56-6-1305
Severability
Status: in_force

If any provision of this part or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the part which can be given effect without the invalid provision or application, and to that end the provisions of this part are declared to be severable. Added by 2013 Tenn. Acts, ch. 377,s 1, eff. 7/1/2013.
If any provision of this part or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the part which can be given effect without the invalid provision or application, and to that end the provisions of this part are declared to be severable.
Added by 2013 Tenn. Acts, ch. 377,s 1, eff. 7/1/2013.
Tenn. Code Ann. § 56-51-106 — TN Code / Title 56 / Chapter 51 / Section 56-51-106
Application for certificate of authority
Status: in_force

(a) Before any entity may operate a prepaid limited health service organization, it must obtain a certificate of authority from the department. An application for a certificate of authority to operate a prepaid limited health service organization must be filed with the department on a form prescribed by the department. The application must be sworn to by an officer or authorized representative of the applicant and be accompanied by the following: (1) A copy of the applicant's basic organizational document, including the articles of incorporation, articles of association, partnership agreements, trust agreement, or other applicable documents and all amendments to the documents; (2) A copy of all bylaws, rules, and regulations, or similar documents, if any, regulating the conduct of the applicant's internal affairs; (3) A list of the names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant's affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten percent (10%) or more of the voting securities of the applicant. The listing must fully disclose the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the prepaid limited health service organization, including any possible conflicts of interest; (4) A complete biographical statement, on forms prescribed by the department, an independent investigation report, with respect to each individual identified under subdivision (a)(3); (5) A statement generally describing the applicant, its facilities and personnel, and the limited health service or services to be offered; (6) A copy of the form of all contracts made or to be made between the applicant and any providers regarding the provision of limited health services to enrollees; (7) A copy of the form of any contract made or arrangement to be made between the applicant and any person listed in subdivision (a)(3); (8) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any function, including, but not limited to, marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees; (9) A copy of the form of any prepaid limited health service contract that is to be issued to employers, unions, trustees, individuals, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers; (10) A copy of the applicant's most recent financial statements audited by an independent certified public accountant; (11) A copy of the applicant's financial plan, including a three-year projection of anticipated operating results, a statement of the sources of funding, and provisions for contingencies, for which projection all material assumptions shall be disclosed; (12) A schedule of rates and charges for each contract to be used that contains an opinion from a qualified independent actuary that the rates are not inadequate, excessive, or discriminatory; (13) A description of the proposed method of marketing; (14) A description of the subscriber complaint procedures to be established and maintained as required under § 56-51-131 ; (15) A description of how the applicant will comply with § 56-51-138 ; (16) The fee for issuance of a certificate of authority as provided in § 56-51-145 ; and (17) Other information the department may reasonably require to make the determinations required by this chapter. (b) The applicant shall meet the network adequacy requirements established pursuant to § 56-7-2356 . Acts 2000, ch. 948, § 6; 2004, ch. 507, § 5.
(a) Before any entity may operate a prepaid limited health service organization, it must obtain a certificate of authority from the department. An application for a certificate of authority to operate a prepaid limited health service organization must be filed with the department on a form prescribed by the department. The application must be sworn to by an officer or authorized representative of the applicant and be accompanied by the following: (1) A copy of the applicant's basic organizational document, including the articles of incorporation, articles of association, partnership agreements, trust agreement, or other applicable documents and all amendments to the documents; (2) A copy of all bylaws, rules, and regulations, or similar documents, if any, regulating the conduct of the applicant's internal affairs; (3) A list of the names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant's affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten percent (10%) or more of the voting securities of the applicant. The listing must fully disclose the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the prepaid limited health service organization, including any possible conflicts of interest; (4) A complete biographical statement, on forms prescribed by the department, an independent investigation report, with respect to each individual identified under subdivision (a)(3); (5) A statement generally describing the applicant, its facilities and personnel, and the limited health service or services to be offered; (6) A copy of the form of all contracts made or to be made between the applicant and any providers regarding the provision of limited health services to enrollees; (7) A copy of the form of any contract made or arrangement to be made between the applicant and any person listed in subdivision (a)(3); (8) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any function, including, but not limited to, marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees; (9) A copy of the form of any prepaid limited health service contract that is to be issued to employers, unions, trustees, individuals, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers; (10) A copy of the applicant's most recent financial statements audited by an independent certified public accountant; (11) A copy of the applicant's financial plan, including a three-year projection of anticipated operating results, a statement of the sources of funding, and provisions for contingencies, for which projection all material assumptions shall be disclosed; (12) A schedule of rates and charges for each contract to be used that contains an opinion from a qualified independent actuary that the rates are not inadequate, excessive, or discriminatory; (13) A description of the proposed method of marketing; (14) A description of the subscriber complaint procedures to be established and maintained as required under § 56-51-131 ; (15) A description of how the applicant will comply with § 56-51-138 ; (16) The fee for issuance of a certificate of authority as provided in § 56-51-145 ; and (17) Other information the department may reasonably require to make the determinations required by this chapter.
(1) A copy of the applicant's basic organizational document, including the articles of incorporation, articles of association, partnership agreements, trust agreement, or other applicable documents and all amendments to the documents;
(2) A copy of all bylaws, rules, and regulations, or similar documents, if any, regulating the conduct of the applicant's internal affairs;
(3) A list of the names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant's affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten percent (10%) or more of the voting securities of the applicant. The listing must fully disclose the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the prepaid limited health service organization, including any possible conflicts of interest;
(4) A complete biographical statement, on forms prescribed by the department, an independent investigation report, with respect to each individual identified under subdivision (a)(3);
(5) A statement generally describing the applicant, its facilities and personnel, and the limited health service or services to be offered;
(6) A copy of the form of all contracts made or to be made between the applicant and any providers regarding the provision of limited health services to enrollees;
(7) A copy of the form of any contract made or arrangement to be made between the applicant and any person listed in subdivision (a)(3);
(8) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any function, including, but not limited to, marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees;
(9) A copy of the form of any prepaid limited health service contract that is to be issued to employers, unions, trustees, individuals, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers;
(10) A copy of the applicant's most recent financial statements audited by an independent certified public accountant;
(11) A copy of the applicant's financial plan, including a three-year projection of anticipated operating results, a statement of the sources of funding, and provisions for contingencies, for which projection all material assumptions shall be disclosed;
(12) A schedule of rates and charges for each contract to be used that contains an opinion from a qualified independent actuary that the rates are not inadequate, excessive, or discriminatory;
(13) A description of the proposed method of marketing;
(14) A description of the subscriber complaint procedures to be established and maintained as required under § 56-51-131 ;
(15) A description of how the applicant will comply with § 56-51-138 ;
(16) The fee for issuance of a certificate of authority as provided in § 56-51-145 ; and
(17) Other information the department may reasonably require to make the determinations required by this chapter.
(b) The applicant shall meet the network adequacy requirements established pursuant to § 56-7-2356 .
Acts 2000, ch. 948, § 6; 2004, ch. 507, § 5.
Tenn. Code Ann. § 56-6-502 — TN Code / Title 56 / Chapter 6 / Section 56-6-502
Part definitions
Status: in_force

As used in this part, unless the context otherwise requires: (1) "Actuary" means a person who is a member in good standing of the American Academy of Actuaries; (2) "Insurer" means any person, firm, association or corporation duly licensed in this state as an insurance company pursuant to § 56-2-102 ; (3) (A) "Managing general agent" or "MGA" means any person who: (i) Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office; and (ii) Acts as an agent for such insurer, whether known as a MGA, manager, or other similar term, and who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent (5%) of the policyholder surplus in any one (1) quarter or year, as reported in the last annual statement of the insurer, and, related to the business produced, either: (a) Adjusts or pays claims in excess of ten thousand dollars ($10,000) per claim; or (b) Negotiates reinsurance on behalf of the insurer; (B) Notwithstanding subdivision (3)(A), the following persons shall not be considered as MGAs for the purposes of this part: (i) An employee of the insurer; (ii) A United States manager of the United States branch of an alien insurer; (iii) An underwriting manager that, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer, subject to the Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title, and whose compensation is not based on the volume of premiums written; and (iv) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney; and (4) "Underwrite" means the authority to accept or reject risk on behalf of the insurer. Amended by 2018 Tenn. Acts, ch. 873,s 10, eff. 5/3/2018. Acts 1991, ch. 142, § 7; 1992, ch. 768, § 1.
As used in this part, unless the context otherwise requires:
(1) "Actuary" means a person who is a member in good standing of the American Academy of Actuaries;
(2) "Insurer" means any person, firm, association or corporation duly licensed in this state as an insurance company pursuant to § 56-2-102 ;
(3) (A) "Managing general agent" or "MGA" means any person who: (i) Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office; and (ii) Acts as an agent for such insurer, whether known as a MGA, manager, or other similar term, and who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent (5%) of the policyholder surplus in any one (1) quarter or year, as reported in the last annual statement of the insurer, and, related to the business produced, either: (a) Adjusts or pays claims in excess of ten thousand dollars ($10,000) per claim; or (b) Negotiates reinsurance on behalf of the insurer; (B) Notwithstanding subdivision (3)(A), the following persons shall not be considered as MGAs for the purposes of this part: (i) An employee of the insurer; (ii) A United States manager of the United States branch of an alien insurer; (iii) An underwriting manager that, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer, subject to the Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title, and whose compensation is not based on the volume of premiums written; and (iv) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney; and
(A) "Managing general agent" or "MGA" means any person who: (i) Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office; and (ii) Acts as an agent for such insurer, whether known as a MGA, manager, or other similar term, and who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent (5%) of the policyholder surplus in any one (1) quarter or year, as reported in the last annual statement of the insurer, and, related to the business produced, either: (a) Adjusts or pays claims in excess of ten thousand dollars ($10,000) per claim; or (b) Negotiates reinsurance on behalf of the insurer;
(i) Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office; and
(ii) Acts as an agent for such insurer, whether known as a MGA, manager, or other similar term, and who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent (5%) of the policyholder surplus in any one (1) quarter or year, as reported in the last annual statement of the insurer, and, related to the business produced, either: (a) Adjusts or pays claims in excess of ten thousand dollars ($10,000) per claim; or (b) Negotiates reinsurance on behalf of the insurer;
(a) Adjusts or pays claims in excess of ten thousand dollars ($10,000) per claim; or
(b) Negotiates reinsurance on behalf of the insurer;
(B) Notwithstanding subdivision (3)(A), the following persons shall not be considered as MGAs for the purposes of this part: (i) An employee of the insurer; (ii) A United States manager of the United States branch of an alien insurer; (iii) An underwriting manager that, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer, subject to the Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title, and whose compensation is not based on the volume of premiums written; and (iv) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney; and
(i) An employee of the insurer;
(ii) A United States manager of the United States branch of an alien insurer;
(iii) An underwriting manager that, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer, subject to the Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title, and whose compensation is not based on the volume of premiums written; and
(iv) The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney; and
(4) "Underwrite" means the authority to accept or reject risk on behalf of the insurer.
Amended by 2018 Tenn. Acts, ch. 873,s 10, eff. 5/3/2018.
Acts 1991, ch. 142, § 7; 1992, ch. 768, § 1.
Tenn. Code Ann. § 56-11-210 — TN Code / Title 56 / Chapter 11 / Section 56-11-210
Severability
Status: in_force

If any provision of this part, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this part which can be given effect without the invalid provision or application, and to that end the provisions of this part are severable. Acts 2014, ch. 583, § 26.
If any provision of this part, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this part which can be given effect without the invalid provision or application, and to that end the provisions of this part are severable.
Acts 2014, ch. 583, § 26.
Tenn. Code Ann. § 56-32-109 — TN Code / Title 56 / Chapter 32 / Section 56-32-109
Notice of change in operation
Status: in_force

Every HMO shall provide promptly to its enrollees notice of any material change in the operation of the organization that will affect them directly. Acts 1986, ch. 713, § 9; T.C.A. § 56-32-209.
Every HMO shall provide promptly to its enrollees notice of any material change in the operation of the organization that will affect them directly.
Acts 1986, ch. 713, § 9; T.C.A. § 56-32-209.
Tenn. Code Ann. § 56-3-703 — TN Code / Title 56 / Chapter 3 / Section 56-3-703
Profits from unfair use of information recoverable - Exceptions
Status: in_force

(a) For the purpose of preventing the unfair use of information that may have been obtained by the beneficial owner, director, or officer by reason of the relationship to the company, any profit realized by the person from any purchase and sale, or any sale and purchase, of any equity security of the company within any period of less than six (6) months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six (6) months. (b) Suit to recover the profit may be instituted at law or in equity in any court of competent jurisdiction by the company or by the owner of any security of the company in the name and in behalf of the company, if the company fails or refuses to bring suit within sixty (60) days after request or fails diligently to prosecute it thereafter; but no suit shall be brought more than two (2) years after the date the profit was realized. (c) This section shall not be construed to cover any transaction where the beneficial owner was not the beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions that the commissioner by rules and regulations exempts as not comprehended within the purpose of this section. Acts 1965, ch. 95, § 2; T.C.A., §§ 56-251, 56-333.
(a) For the purpose of preventing the unfair use of information that may have been obtained by the beneficial owner, director, or officer by reason of the relationship to the company, any profit realized by the person from any purchase and sale, or any sale and purchase, of any equity security of the company within any period of less than six (6) months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six (6) months.
(b) Suit to recover the profit may be instituted at law or in equity in any court of competent jurisdiction by the company or by the owner of any security of the company in the name and in behalf of the company, if the company fails or refuses to bring suit within sixty (60) days after request or fails diligently to prosecute it thereafter; but no suit shall be brought more than two (2) years after the date the profit was realized.
(c) This section shall not be construed to cover any transaction where the beneficial owner was not the beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions that the commissioner by rules and regulations exempts as not comprehended within the purpose of this section.
Acts 1965, ch. 95, § 2; T.C.A., §§ 56-251, 56-333.
Tenn. Code Ann. § 56-25-501 — TN Code / Title 56 / Chapter 25 / Section 56-25-501
Investments
Status: in_force

A society shall invest its funds only in the investments that are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations on the investment. Any foreign or alien society permitted or seeking to do business in this state, which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds. Acts 1990, ch. 703, § 1.
A society shall invest its funds only in the investments that are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations on the investment. Any foreign or alien society permitted or seeking to do business in this state, which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds.
Acts 1990, ch. 703, § 1.
Tenn. Code Ann. § 56-46-108 — TN Code / Title 56 / Chapter 46 / Section 56-46-108
Hearings
Status: in_force

(a) The insurer shall have the right to a confidential departmental hearing, on a record, at which the insurer may challenge any determination or action by the commissioner, upon any of the following: (1) Notification to an insurer by the commissioner of an Adjusted RBC Report; or (2) Notification to an insurer by the commissioner that: (A) The insurer's RBC Plan or Revised RBC Plan is unsatisfactory; and (B) The notification constitutes a Regulatory Action Level Event with respect to the insurer; or (3) Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that the failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan; or (4) Notification to an insurer by the commissioner of a Corrective Order with respect to the insurer. (b) The insurer shall notify the commissioner of its request for a hearing within five (5) days after the notification by the commissioner under subdivision (a)(1), (2), (3) or (4). Upon receipt of the insurer's request for a hearing, the commissioner shall set a date for the hearing, which date shall be no less than ten (10) nor more than thirty (30) days after the date of the insurer's request. Acts 1996, ch. 750, § 9.
(a) The insurer shall have the right to a confidential departmental hearing, on a record, at which the insurer may challenge any determination or action by the commissioner, upon any of the following: (1) Notification to an insurer by the commissioner of an Adjusted RBC Report; or (2) Notification to an insurer by the commissioner that: (A) The insurer's RBC Plan or Revised RBC Plan is unsatisfactory; and (B) The notification constitutes a Regulatory Action Level Event with respect to the insurer; or (3) Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that the failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan; or (4) Notification to an insurer by the commissioner of a Corrective Order with respect to the insurer.
(1) Notification to an insurer by the commissioner of an Adjusted RBC Report; or
(2) Notification to an insurer by the commissioner that: (A) The insurer's RBC Plan or Revised RBC Plan is unsatisfactory; and (B) The notification constitutes a Regulatory Action Level Event with respect to the insurer; or
(A) The insurer's RBC Plan or Revised RBC Plan is unsatisfactory; and
(B) The notification constitutes a Regulatory Action Level Event with respect to the insurer; or
(3) Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that the failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan; or
(4) Notification to an insurer by the commissioner of a Corrective Order with respect to the insurer.
(b) The insurer shall notify the commissioner of its request for a hearing within five (5) days after the notification by the commissioner under subdivision (a)(1), (2), (3) or (4). Upon receipt of the insurer's request for a hearing, the commissioner shall set a date for the hearing, which date shall be no less than ten (10) nor more than thirty (30) days after the date of the insurer's request.
Acts 1996, ch. 750, § 9.
Tenn. Code Ann. § 56-32-112 — TN Code / Title 56 / Chapter 32 / Section 56-32-112
Capital requirements - Required deposits
Status: in_force

(a) To ensure the public's interest in the delivery of health care services by fiscally sound HMOs, each HMO must provide the commissioner evidence of compliance with the following minimum net worth requirements: (1) Before issuing any certificate of authority, the commissioner shall require that the HMO have an initial net worth of one million five hundred thousand dollars ($1,500,000), and thereafter HMOs must maintain the minimum net worth as set forth in this section. "Net worth" means the excess of total admitted assets over total admitted liabilities, but the liabilities shall not include fully subordinated debt approved by the commissioner; (2) Except as provided in subdivisions (a)(3) and (4), every HMO must maintain a minimum net worth equal to the greater of: (A) One million five hundred thousand dollars ($1,500,000); or (B) An amount totaling four percent (4%) of the first one hundred fifty million dollars ($150,000,000) of annual premium revenue as reported on the most recent annual statement filed with the commissioner and one and one half percent (1.5%) of the annual premium revenue in excess of one hundred fifty million dollars ($150,000,000). "Premium revenue" or "premiums," as used in this chapter includes, but is not limited to, any and all payments made by the state to any entity providing health care services pursuant to any federal waiver received by the state that waives any or all of Title XIX of the federal Social Security Act, compiled in 42 U.S.C. § 1396 et seq., and regulations promulgated pursuant to Title XIX, or pursuant to any other federal law as adopted by amendment to the required Title XIX state plan; (3) An HMO licensed before March 1, 1997 must maintain a minimum net worth of one hundred percent (100%) of the amount required by subdivision (a)(2) after June 30, 1998; (4) In determining net worth, no debt shall be considered fully subordinated unless in a form approved by the commissioner. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated. The interest expenses relating to the repayment of any fully subordinated debt shall be considered covered expenses; (5) For purposes of calculating an HMO's net worth, "admitted assets" includes the following, as may be subsequently modified by the commissioner: (A) Petty cash and other cash funds in the organization's principal or official branch office that are under the organization's control; (B) Immediately withdrawable funds on deposit in demand accounts, in a bank or trust company organized and regularly examined under the laws of the United States or any state, and insured by an agency of the United States government, or like funds actually in the principal or official branch office at statement date and in transit to a bank or trust company with authentic deposit credit given before the close of business on the fifth bank working day following the statement date; (C) The amount fairly estimated as recoverable on cash deposited in a closed bank or trust company, if the assets qualified under this section before the suspension of the bank or trust company; (D) Receivables due from persons that are not more than ninety (90) days past due; (E) Amounts due under reinsurance arrangements from insurance companies authorized to do business in this state; (F) Undisputed tax refunds or other receivables due from the United States or this state; (G) Amounts on deposit under subsection (b); and (H) Investments determined as allowable by the commissioner under § 56-32-111 ; (6) An HMO must maintain a positive working capital. As used in this section only, "working capital" means current assets, including admitted stocks and admitted bonds, minus current liabilities; and (7) If the working capital or net worth is less than the required minimum, the HMO must submit for approval by the commissioner a written plan within thirty (30) days after the commissioner has given the HMO notice of the net worth or working capital deficiency. The commissioner may take action against the HMO under § 56-32-116 or § 56-32-117 if: (A) An HMO does not propose a plan to correct its working capital or net worth deficiency within the time frame described in subdivision (a)(7); (B) An HMO violates a plan that has been approved; (C) The commissioner determines that an improper working capital or net worth status cannot be corrected within a reasonable time; or (D) The commissioner determines that an organization is in such financial condition that the transaction of further business would be hazardous to its enrollees, its creditors, or the public. (b) To ensure that an HMO provides for contract and medical services in the case of insolvency or liquidation, each HMO must maintain deposits in custodial or controlled accounts as described in this section. (1) Before issuing any certificate of authority, the commissioner shall require each HMO to deposit with the commissioner or, at the discretion of the commissioner, with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities, or any combination of these or other measures that are acceptable to the commissioner that at all times shall have a value of not less than nine hundred thousand dollars ($900,000); (2) An HMO that is in operation on June 1, 1997, shall maintain a deposit equal to nine hundred thousand dollars ($900,000), in the manner set forth in subdivision (b)(1); (3) In addition to the deposit requirements in this section, an HMO shall also maintain on deposit in the manner set forth in subdivision (b)(1) one hundred thousand dollars ($100,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of twenty million dollars ($20,000,000) and less than one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner, and fifty thousand dollars ($50,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner; (4) In any year in which the accumulated deposit of an HMO is more than the amount required to be maintained by the organization under the terms of this section, at the organization's request the commissioner shall reduce the previously accumulated deposit by the amount that the deposit exceeds the amount of deposit required by this section; (5) The deposit shall be an admitted asset of the HMO in the determination of net worth; (6) All income from deposits shall be an asset of the organization. An HMO that has been allowed by the commissioner to make a securities deposit may withdraw that deposit or any part of the deposit after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value as approved by the commissioner. No substitute deposit shall be allowed unless approved in advance by the commissioner; and (7) The deposit shall be used and shall be considered held in trust to protect the interests of the HMO's enrollees and to assure continuation of health care services to enrollees of an HMO that is in rehabilitation or liquidation. If the HMO is placed voluntarily or involuntarily in rehabilitation or liquidation, the deposit shall immediately prior to the filing of the rehabilitation or liquidation proceeding vest in the state of Tennessee. (c) Every HMO shall, when determining liabilities for purposes of calculating the organization's net worth, include an amount estimated in the aggregate to provide for any unearned premium and for the payment of all claims for health care expenditures that have been incurred, whether reported or unreported, are unpaid and for which the organization is or may be liable, and to provide for the expense of adjustment or settlement of the claims. The liabilities may be computed in accordance with rules and regulations promulgated by the commissioner upon reasonable consideration of the ascertained experience and character of the HMO. Acts 1986, ch. 713, §12; 1997 , ch. 59, § 1; 2000, ch. 708, § 2; T.C.A. § 56-32-212.
(a) To ensure the public's interest in the delivery of health care services by fiscally sound HMOs, each HMO must provide the commissioner evidence of compliance with the following minimum net worth requirements: (1) Before issuing any certificate of authority, the commissioner shall require that the HMO have an initial net worth of one million five hundred thousand dollars ($1,500,000), and thereafter HMOs must maintain the minimum net worth as set forth in this section. "Net worth" means the excess of total admitted assets over total admitted liabilities, but the liabilities shall not include fully subordinated debt approved by the commissioner; (2) Except as provided in subdivisions (a)(3) and (4), every HMO must maintain a minimum net worth equal to the greater of: (A) One million five hundred thousand dollars ($1,500,000); or (B) An amount totaling four percent (4%) of the first one hundred fifty million dollars ($150,000,000) of annual premium revenue as reported on the most recent annual statement filed with the commissioner and one and one half percent (1.5%) of the annual premium revenue in excess of one hundred fifty million dollars ($150,000,000). "Premium revenue" or "premiums," as used in this chapter includes, but is not limited to, any and all payments made by the state to any entity providing health care services pursuant to any federal waiver received by the state that waives any or all of Title XIX of the federal Social Security Act, compiled in 42 U.S.C. § 1396 et seq., and regulations promulgated pursuant to Title XIX, or pursuant to any other federal law as adopted by amendment to the required Title XIX state plan; (3) An HMO licensed before March 1, 1997 must maintain a minimum net worth of one hundred percent (100%) of the amount required by subdivision (a)(2) after June 30, 1998; (4) In determining net worth, no debt shall be considered fully subordinated unless in a form approved by the commissioner. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated. The interest expenses relating to the repayment of any fully subordinated debt shall be considered covered expenses; (5) For purposes of calculating an HMO's net worth, "admitted assets" includes the following, as may be subsequently modified by the commissioner: (A) Petty cash and other cash funds in the organization's principal or official branch office that are under the organization's control; (B) Immediately withdrawable funds on deposit in demand accounts, in a bank or trust company organized and regularly examined under the laws of the United States or any state, and insured by an agency of the United States government, or like funds actually in the principal or official branch office at statement date and in transit to a bank or trust company with authentic deposit credit given before the close of business on the fifth bank working day following the statement date; (C) The amount fairly estimated as recoverable on cash deposited in a closed bank or trust company, if the assets qualified under this section before the suspension of the bank or trust company; (D) Receivables due from persons that are not more than ninety (90) days past due; (E) Amounts due under reinsurance arrangements from insurance companies authorized to do business in this state; (F) Undisputed tax refunds or other receivables due from the United States or this state; (G) Amounts on deposit under subsection (b); and (H) Investments determined as allowable by the commissioner under § 56-32-111 ; (6) An HMO must maintain a positive working capital. As used in this section only, "working capital" means current assets, including admitted stocks and admitted bonds, minus current liabilities; and (7) If the working capital or net worth is less than the required minimum, the HMO must submit for approval by the commissioner a written plan within thirty (30) days after the commissioner has given the HMO notice of the net worth or working capital deficiency. The commissioner may take action against the HMO under § 56-32-116 or § 56-32-117 if: (A) An HMO does not propose a plan to correct its working capital or net worth deficiency within the time frame described in subdivision (a)(7); (B) An HMO violates a plan that has been approved; (C) The commissioner determines that an improper working capital or net worth status cannot be corrected within a reasonable time; or (D) The commissioner determines that an organization is in such financial condition that the transaction of further business would be hazardous to its enrollees, its creditors, or the public.
(1) Before issuing any certificate of authority, the commissioner shall require that the HMO have an initial net worth of one million five hundred thousand dollars ($1,500,000), and thereafter HMOs must maintain the minimum net worth as set forth in this section. "Net worth" means the excess of total admitted assets over total admitted liabilities, but the liabilities shall not include fully subordinated debt approved by the commissioner;
(2) Except as provided in subdivisions (a)(3) and (4), every HMO must maintain a minimum net worth equal to the greater of: (A) One million five hundred thousand dollars ($1,500,000); or (B) An amount totaling four percent (4%) of the first one hundred fifty million dollars ($150,000,000) of annual premium revenue as reported on the most recent annual statement filed with the commissioner and one and one half percent (1.5%) of the annual premium revenue in excess of one hundred fifty million dollars ($150,000,000). "Premium revenue" or "premiums," as used in this chapter includes, but is not limited to, any and all payments made by the state to any entity providing health care services pursuant to any federal waiver received by the state that waives any or all of Title XIX of the federal Social Security Act, compiled in 42 U.S.C. § 1396 et seq., and regulations promulgated pursuant to Title XIX, or pursuant to any other federal law as adopted by amendment to the required Title XIX state plan;
(A) One million five hundred thousand dollars ($1,500,000); or
(B) An amount totaling four percent (4%) of the first one hundred fifty million dollars ($150,000,000) of annual premium revenue as reported on the most recent annual statement filed with the commissioner and one and one half percent (1.5%) of the annual premium revenue in excess of one hundred fifty million dollars ($150,000,000). "Premium revenue" or "premiums," as used in this chapter includes, but is not limited to, any and all payments made by the state to any entity providing health care services pursuant to any federal waiver received by the state that waives any or all of Title XIX of the federal Social Security Act, compiled in 42 U.S.C. § 1396 et seq., and regulations promulgated pursuant to Title XIX, or pursuant to any other federal law as adopted by amendment to the required Title XIX state plan;
(3) An HMO licensed before March 1, 1997 must maintain a minimum net worth of one hundred percent (100%) of the amount required by subdivision (a)(2) after June 30, 1998;
(4) In determining net worth, no debt shall be considered fully subordinated unless in a form approved by the commissioner. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated. The interest expenses relating to the repayment of any fully subordinated debt shall be considered covered expenses;
(5) For purposes of calculating an HMO's net worth, "admitted assets" includes the following, as may be subsequently modified by the commissioner: (A) Petty cash and other cash funds in the organization's principal or official branch office that are under the organization's control; (B) Immediately withdrawable funds on deposit in demand accounts, in a bank or trust company organized and regularly examined under the laws of the United States or any state, and insured by an agency of the United States government, or like funds actually in the principal or official branch office at statement date and in transit to a bank or trust company with authentic deposit credit given before the close of business on the fifth bank working day following the statement date; (C) The amount fairly estimated as recoverable on cash deposited in a closed bank or trust company, if the assets qualified under this section before the suspension of the bank or trust company; (D) Receivables due from persons that are not more than ninety (90) days past due; (E) Amounts due under reinsurance arrangements from insurance companies authorized to do business in this state; (F) Undisputed tax refunds or other receivables due from the United States or this state; (G) Amounts on deposit under subsection (b); and (H) Investments determined as allowable by the commissioner under § 56-32-111 ;
(A) Petty cash and other cash funds in the organization's principal or official branch office that are under the organization's control;
(B) Immediately withdrawable funds on deposit in demand accounts, in a bank or trust company organized and regularly examined under the laws of the United States or any state, and insured by an agency of the United States government, or like funds actually in the principal or official branch office at statement date and in transit to a bank or trust company with authentic deposit credit given before the close of business on the fifth bank working day following the statement date;
(C) The amount fairly estimated as recoverable on cash deposited in a closed bank or trust company, if the assets qualified under this section before the suspension of the bank or trust company;
(D) Receivables due from persons that are not more than ninety (90) days past due;
(E) Amounts due under reinsurance arrangements from insurance companies authorized to do business in this state;
(F) Undisputed tax refunds or other receivables due from the United States or this state;
(G) Amounts on deposit under subsection (b); and
(H) Investments determined as allowable by the commissioner under § 56-32-111 ;
(6) An HMO must maintain a positive working capital. As used in this section only, "working capital" means current assets, including admitted stocks and admitted bonds, minus current liabilities; and
(7) If the working capital or net worth is less than the required minimum, the HMO must submit for approval by the commissioner a written plan within thirty (30) days after the commissioner has given the HMO notice of the net worth or working capital deficiency. The commissioner may take action against the HMO under § 56-32-116 or § 56-32-117 if: (A) An HMO does not propose a plan to correct its working capital or net worth deficiency within the time frame described in subdivision (a)(7); (B) An HMO violates a plan that has been approved; (C) The commissioner determines that an improper working capital or net worth status cannot be corrected within a reasonable time; or (D) The commissioner determines that an organization is in such financial condition that the transaction of further business would be hazardous to its enrollees, its creditors, or the public.
(A) An HMO does not propose a plan to correct its working capital or net worth deficiency within the time frame described in subdivision (a)(7);
(B) An HMO violates a plan that has been approved;
(C) The commissioner determines that an improper working capital or net worth status cannot be corrected within a reasonable time; or
(D) The commissioner determines that an organization is in such financial condition that the transaction of further business would be hazardous to its enrollees, its creditors, or the public.
(b) To ensure that an HMO provides for contract and medical services in the case of insolvency or liquidation, each HMO must maintain deposits in custodial or controlled accounts as described in this section. (1) Before issuing any certificate of authority, the commissioner shall require each HMO to deposit with the commissioner or, at the discretion of the commissioner, with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities, or any combination of these or other measures that are acceptable to the commissioner that at all times shall have a value of not less than nine hundred thousand dollars ($900,000); (2) An HMO that is in operation on June 1, 1997, shall maintain a deposit equal to nine hundred thousand dollars ($900,000), in the manner set forth in subdivision (b)(1); (3) In addition to the deposit requirements in this section, an HMO shall also maintain on deposit in the manner set forth in subdivision (b)(1) one hundred thousand dollars ($100,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of twenty million dollars ($20,000,000) and less than one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner, and fifty thousand dollars ($50,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner; (4) In any year in which the accumulated deposit of an HMO is more than the amount required to be maintained by the organization under the terms of this section, at the organization's request the commissioner shall reduce the previously accumulated deposit by the amount that the deposit exceeds the amount of deposit required by this section; (5) The deposit shall be an admitted asset of the HMO in the determination of net worth; (6) All income from deposits shall be an asset of the organization. An HMO that has been allowed by the commissioner to make a securities deposit may withdraw that deposit or any part of the deposit after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value as approved by the commissioner. No substitute deposit shall be allowed unless approved in advance by the commissioner; and (7) The deposit shall be used and shall be considered held in trust to protect the interests of the HMO's enrollees and to assure continuation of health care services to enrollees of an HMO that is in rehabilitation or liquidation. If the HMO is placed voluntarily or involuntarily in rehabilitation or liquidation, the deposit shall immediately prior to the filing of the rehabilitation or liquidation proceeding vest in the state of Tennessee.
(1) Before issuing any certificate of authority, the commissioner shall require each HMO to deposit with the commissioner or, at the discretion of the commissioner, with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities, or any combination of these or other measures that are acceptable to the commissioner that at all times shall have a value of not less than nine hundred thousand dollars ($900,000);
(2) An HMO that is in operation on June 1, 1997, shall maintain a deposit equal to nine hundred thousand dollars ($900,000), in the manner set forth in subdivision (b)(1);
(3) In addition to the deposit requirements in this section, an HMO shall also maintain on deposit in the manner set forth in subdivision (b)(1) one hundred thousand dollars ($100,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of twenty million dollars ($20,000,000) and less than one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner, and fifty thousand dollars ($50,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner;
(4) In any year in which the accumulated deposit of an HMO is more than the amount required to be maintained by the organization under the terms of this section, at the organization's request the commissioner shall reduce the previously accumulated deposit by the amount that the deposit exceeds the amount of deposit required by this section;
(5) The deposit shall be an admitted asset of the HMO in the determination of net worth;
(6) All income from deposits shall be an asset of the organization. An HMO that has been allowed by the commissioner to make a securities deposit may withdraw that deposit or any part of the deposit after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value as approved by the commissioner. No substitute deposit shall be allowed unless approved in advance by the commissioner; and
(7) The deposit shall be used and shall be considered held in trust to protect the interests of the HMO's enrollees and to assure continuation of health care services to enrollees of an HMO that is in rehabilitation or liquidation. If the HMO is placed voluntarily or involuntarily in rehabilitation or liquidation, the deposit shall immediately prior to the filing of the rehabilitation or liquidation proceeding vest in the state of Tennessee.
(c) Every HMO shall, when determining liabilities for purposes of calculating the organization's net worth, include an amount estimated in the aggregate to provide for any unearned premium and for the payment of all claims for health care expenditures that have been incurred, whether reported or unreported, are unpaid and for which the organization is or may be liable, and to provide for the expense of adjustment or settlement of the claims. The liabilities may be computed in accordance with rules and regulations promulgated by the commissioner upon reasonable consideration of the ascertained experience and character of the HMO.
Acts 1986, ch. 713, §12; 1997 , ch. 59, § 1; 2000, ch. 708, § 2; T.C.A. § 56-32-212.
Tenn. Code Ann. § 56-13-407 — TN Code / Title 56 / Chapter 13 / Section 56-13-407
Authorized activities
Status: in_force

(a) An SPFC shall only insure the risks of a counterparty. (b) No SPFC shall issue a contract for assumption of risk or indemnification of loss other than an SPFC contract. However, the SPFC may cede risks assumed through an SPFC contract to third party reinsurers through the purchase of reinsurance or retrocession protection on terms approved by the commissioner. (c) An SPFC may enter into contracts and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of the SPFC contract, insurance securitization, and this part. Those activities may include, but are not limited to: (1) Entering into SPFC contracts; (2) Issuing SPFC securities in accordance with applicable securities law; (3) Complying with the terms of such contracts or securities; (4) Entering into trust, guaranteed investment contract, letter of credit, swap, tax, administration, reimbursement, or fiscal agent transactions; and (5) Complying with trust indenture, reinsurance, or retrocession; and agreements necessary or incidental to effectuate an insurance securitization in compliance with this part or the plan of operation approved by the commissioner. (d) (1) An SPFC shall discount its reserves at discount rates as approved by the commissioner. (2) An SPFC shall maintain reserves that are actuarially sufficient to support the liabilities incurred by SPFC in reinsuring life insurance policies. (3) An SPFC shall file annually with the commissioner an actuarial opinion on reserves provided by an approved independent actuary. Acts 2011, ch. 468, § 1.
(a) An SPFC shall only insure the risks of a counterparty.
(b) No SPFC shall issue a contract for assumption of risk or indemnification of loss other than an SPFC contract. However, the SPFC may cede risks assumed through an SPFC contract to third party reinsurers through the purchase of reinsurance or retrocession protection on terms approved by the commissioner.
(c) An SPFC may enter into contracts and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of the SPFC contract, insurance securitization, and this part. Those activities may include, but are not limited to: (1) Entering into SPFC contracts; (2) Issuing SPFC securities in accordance with applicable securities law; (3) Complying with the terms of such contracts or securities; (4) Entering into trust, guaranteed investment contract, letter of credit, swap, tax, administration, reimbursement, or fiscal agent transactions; and (5) Complying with trust indenture, reinsurance, or retrocession; and agreements necessary or incidental to effectuate an insurance securitization in compliance with this part or the plan of operation approved by the commissioner.
(1) Entering into SPFC contracts;
(2) Issuing SPFC securities in accordance with applicable securities law;
(3) Complying with the terms of such contracts or securities;
(4) Entering into trust, guaranteed investment contract, letter of credit, swap, tax, administration, reimbursement, or fiscal agent transactions; and
(5) Complying with trust indenture, reinsurance, or retrocession; and agreements necessary or incidental to effectuate an insurance securitization in compliance with this part or the plan of operation approved by the commissioner.
(d) (1) An SPFC shall discount its reserves at discount rates as approved by the commissioner. (2) An SPFC shall maintain reserves that are actuarially sufficient to support the liabilities incurred by SPFC in reinsuring life insurance policies. (3) An SPFC shall file annually with the commissioner an actuarial opinion on reserves provided by an approved independent actuary.
(1) An SPFC shall discount its reserves at discount rates as approved by the commissioner.
(2) An SPFC shall maintain reserves that are actuarially sufficient to support the liabilities incurred by SPFC in reinsuring life insurance policies.
(3) An SPFC shall file annually with the commissioner an actuarial opinion on reserves provided by an approved independent actuary.
Acts 2011, ch. 468, § 1.
Tenn. Code Ann. § 56-35-105 — TN Code / Title 56 / Chapter 35 / Section 56-35-105
Supervision and control by commissioner
Status: in_force

The business of title insurance in this state is placed under the supervision and control of the commissioner, and every corporation engaged in title insurance business in this state shall be subject to the requirements of this chapter, and none other than a corporation, domestic or foreign, duly qualified under this chapter shall engage in the business of title insurance in this state. Acts 1955, ch. 173, § 4; impl. am. Acts 1971, ch. 137, § 2; T.C.A., § 56-3405.
The business of title insurance in this state is placed under the supervision and control of the commissioner, and every corporation engaged in title insurance business in this state shall be subject to the requirements of this chapter, and none other than a corporation, domestic or foreign, duly qualified under this chapter shall engage in the business of title insurance in this state.
Acts 1955, ch. 173, § 4; impl. am. Acts 1971, ch. 137, § 2; T.C.A., § 56-3405.
Tenn. Code Ann. § 56-7-130 — TN Code / Title 56 / Chapter 7 / Section 56-7-130
Sinkhole losses
Status: in_force

(a) As used in this section, unless the context otherwise requires: (1) "ANSI" means the American National Standards Institute; (2) "Building stabilization or foundation repairs" means techniques performed at, to, or attached to the existing foundation of a building with the intention to repair, re-level, or stabilize the building or foundation of a covered structure; (3) "Covered structure" means any structure, including the personal property contained in the structure, to the extent covered under the terms of the policy; (4) "Engineer" means a person meeting the qualifications under title 62, chapter 2, part 4 who has at least a bachelor's degree in engineering, and relevant experience and expertise in the identification of sinkhole activity, as well as other potential subterranean causes of structural damage; (5) "Homeowner property insurance" means an insurance policy that includes coverage for a residential dwelling; (6) "Land stabilization" means any repair technique intended to replace, rebuild, stabilize, or restore the land including any repair technique designed to compensate for or prevent land instability; (7) "Primary structural member" means a structural element designed to support and stabilize the vertical or lateral loads of the overall structure; (8) "Primary structural system" means an assemblage of primary structural members; (9) "Professional geologist" means a person meeting the qualifications of title 62, chapter 36, who has at least a bachelor's degree in geology or a related earth science with expertise in the geology of this state, as well as having relevant geological experience and expertise identifying sinkhole activity, as well as other potential geologic causes of structural damage; (10) "Sinkhole" means a subterranean void created by the dissolution of limestone or dolostone strata resulting from groundwater erosion causing a surface subsidence of soil, sediment, or rock; (11) "Sinkhole activity" means settlement or systematic weakening of the earth supporting a covered structure, only if the settlement or systematic weakening results from contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of groundwater erosion on a limestone or similar rock formation; (12) "Sinkhole loss": (A) Means structural damage to a covered structure caused by the sudden collapse of the earth supporting the covered structure as the result of sinkhole activity; and (B) Does not include: (i) Land stabilization or costs associated with land stabilization; or (ii) In the absence of structural damages to the covered structure, cracking, shrinking, expansion, deterioration, or similar damages; and (13) (A) "Structural damage" means foundation displacement or deflection caused by a sinkhole after completion of initial construction of the covered structure, resulting in: (i) Interior floor displacement or deflection: (a) In excess of variances acceptable under building standards for residential construction approved by ANSI; and (b) To the extent that the interior building structure or members are unfit for service or represent a safety hazard; (ii) Damage to primary structural members or primary structural systems that: (a) Results in such members or systems failing to meet the strength and performance requirements set forth in building standards for residential construction approved by ANSI; and (b) Renders such structural members or structural systems unfit for service or a safety hazard; or (iii) Occupancy of the covered structure has been prohibited by a governmental agency because of unsafe conditions. (B) The reference in this subdivision (13) to building standards approved by ANSI shall not require the original construction of a covered structure to be in compliance with such standards, but is solely for the purpose of defining the extent of damage required in order to be considered structural damage. (b) Every insurer offering homeowner property insurance in this state shall make coverage available for insurable sinkhole losses, including contents of personal property contained in the dwelling. The insurer may require an inspection of the property before issuance of sinkhole loss coverage. Nothing in this section mandates that sinkhole loss coverage be included in any homeowner property insurance policy, but only that insurers offering homeowner property insurance make such coverage available for optional purchase on request by policyholders. (c) Every insurer offering homeowner property insurance in this state shall make a proper filing with the department to comply with this section. The insurer may make sinkhole loss coverage available in the homeowner policy itself, by endorsement, or through other coverage that the insurer may arrange, and the insurer may make an additional charge for the coverage. (d) Upon receipt of a claim for a sinkhole loss under a policy providing sinkhole loss coverage, an insurer must meet the following standards in investigating the claim: (1) The insurer shall make an inspection of the insured's premises to determine if there has been structural damage to the covered structure resulting from possible sinkhole activity; (2) If, upon the investigation pursuant to subdivision (d)(1), the insurer determines that there is no sinkhole loss, the insurer may deny the claim; (3) If, the insurer concludes that structural damage to a covered structure is inconsistent with sinkhole activity, then prior to denying the claim, the insurer shall obtain a written certification from an engineer, a professional geologist, or other qualified individual stating that: (A) An analysis was conducted of sufficient scope to provide an opinion within a reasonable professional probability on the cause of the observed structural damage; and (B) Sinkhole activity did not cause the observed structural damage; and (4) If the insurer obtains, pursuant to subdivision (d)(3), written certification that the cause of the structural damage was not sinkhole activity, and if the policyholder has submitted the sinkhole claim without good faith grounds for submitting the claim, the policyholder shall reimburse the insurer for fifty percent (50%) of the cost of the analysis under subdivision (d)(3); provided, however, that a policyholder is not required to reimburse an insurer more than two thousand five hundred dollars ($2,500) with respect to any claim. A policyholder is required to pay reimbursement under this subdivision (d)(4), only if the insurer, prior to ordering the analysis pursuant to subdivision (d)(3), informs the policyholder of the policyholder's potential liability for reimbursement and gives the policyholder the opportunity to withdraw the claim. (e) (1) If a covered sinkhole loss is verified by the insurer, the conduct of the insurer and policyholder is governed by this subsection (e), subject to the terms and conditions of the policy or endorsement. (2) The insurer may limit its total claims payment for damages to the covered structure to the actual cash value of the sinkhole loss to the covered structure, excluding costs associated with building stabilization or foundation repair, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs in accordance with the recommendations of the engineer retained or approved by the insurer. (3) To be eligible to receive payment for building stabilization or foundation repairs, or any other loss to the covered structure in excess of the actual cash value of the sinkhole loss to the covered structure, the insured must repair such damage or loss in accordance with a plan of repair approved by the insurer. (4) In order to prevent additional damage to the building or structure, the policyholder must enter into a contract for the performance of building stabilization and foundation repairs within ninety (90) days after the insurance company confirms coverage for the sinkhole loss and notifies the policyholder of such confirmation. (5) After the policyholder enters into the contract for the performance of building stabilization and foundation repairs as set forth in this subsection (e) and subject to the terms and conditions of the policy, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and expenses are incurred. The insurer may not require the policyholder to advance payment for covered repairs. (6) Without the prior written consent of the insurer, the policyholder may not accept anything of value from any person proposing to perform the repairs specified in this section as an inducement to contract with such person for the repairs. (7) The stabilization and all other repairs to the structure and contents must be completed within twelve (12) months after entering into the contract for repairs described in subdivision (e)(3) unless: (A) There is a mutual agreement between the insurer and the policyholder; (B) The claim is in litigation; (C) The claim is under appraisal or mediation; or (D) Repairs are undertaken but cannot be completed within twelve (12) months because of reasons beyond the control of the policyholder. (8) If the covered structure cannot be repaired or if the cost of repair exceeds policy limits, the terms and conditions of the policy or endorsement relative to losses in excess of policy limits shall apply. (f) This subsection (f) shall not be construed as limiting an insurer's right to cancel, decline to renew, or decline to issue homeowner property insurance; provided, however, that an insurer may cancel, decline to renew, or decline to issue any homeowner property insurance on a structure that has been the subject of a sinkhole loss claim if the structure: (1) Has not been repaired in accordance with the plan of repair approved by the insurer and within the time constraints set forth in subdivision (e)(7); or (2) Is subject to the risk of future sinkhole damage because of unstable land. (g) Nothing in this section: (1) Requires an insurer to pay more than one (1) policy limit for one (1) policy loss due to a covered sinkhole loss; (2) Prohibits an insurer from inspecting property or engaging in other underwriting practices in connection with making available coverage for sinkhole losses; (3) Prohibits an insurer from offering coverage that is broader or more extensive than the offer of coverage required by this section; (4) Prohibits an insurer from including in a policy or endorsement terms and conditions that are not contrary to this section; or (5) Limits or creates any rights or obligations except as explicitly stated in this section. (h) The commissioner may promulgate rules and regulations for the purpose of implementing this section. Amended by 2015 Tenn. Acts, ch. 162,Secs.s2, s3 eff. 7/1/2015. Amended by 2015 Tenn. Acts, ch. 162,s 1, eff. 7/1/2015. Amended by 2014 Tenn. Acts, ch. 537,s 1, eff. 7/1/2014. Acts 2006, ch. 805, § 1.
(a) As used in this section, unless the context otherwise requires: (1) "ANSI" means the American National Standards Institute; (2) "Building stabilization or foundation repairs" means techniques performed at, to, or attached to the existing foundation of a building with the intention to repair, re-level, or stabilize the building or foundation of a covered structure; (3) "Covered structure" means any structure, including the personal property contained in the structure, to the extent covered under the terms of the policy; (4) "Engineer" means a person meeting the qualifications under title 62, chapter 2, part 4 who has at least a bachelor's degree in engineering, and relevant experience and expertise in the identification of sinkhole activity, as well as other potential subterranean causes of structural damage; (5) "Homeowner property insurance" means an insurance policy that includes coverage for a residential dwelling; (6) "Land stabilization" means any repair technique intended to replace, rebuild, stabilize, or restore the land including any repair technique designed to compensate for or prevent land instability; (7) "Primary structural member" means a structural element designed to support and stabilize the vertical or lateral loads of the overall structure; (8) "Primary structural system" means an assemblage of primary structural members; (9) "Professional geologist" means a person meeting the qualifications of title 62, chapter 36, who has at least a bachelor's degree in geology or a related earth science with expertise in the geology of this state, as well as having relevant geological experience and expertise identifying sinkhole activity, as well as other potential geologic causes of structural damage; (10) "Sinkhole" means a subterranean void created by the dissolution of limestone or dolostone strata resulting from groundwater erosion causing a surface subsidence of soil, sediment, or rock; (11) "Sinkhole activity" means settlement or systematic weakening of the earth supporting a covered structure, only if the settlement or systematic weakening results from contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of groundwater erosion on a limestone or similar rock formation; (12) "Sinkhole loss": (A) Means structural damage to a covered structure caused by the sudden collapse of the earth supporting the covered structure as the result of sinkhole activity; and (B) Does not include: (i) Land stabilization or costs associated with land stabilization; or (ii) In the absence of structural damages to the covered structure, cracking, shrinking, expansion, deterioration, or similar damages; and (13) (A) "Structural damage" means foundation displacement or deflection caused by a sinkhole after completion of initial construction of the covered structure, resulting in: (i) Interior floor displacement or deflection: (a) In excess of variances acceptable under building standards for residential construction approved by ANSI; and (b) To the extent that the interior building structure or members are unfit for service or represent a safety hazard; (ii) Damage to primary structural members or primary structural systems that: (a) Results in such members or systems failing to meet the strength and performance requirements set forth in building standards for residential construction approved by ANSI; and (b) Renders such structural members or structural systems unfit for service or a safety hazard; or (iii) Occupancy of the covered structure has been prohibited by a governmental agency because of unsafe conditions. (B) The reference in this subdivision (13) to building standards approved by ANSI shall not require the original construction of a covered structure to be in compliance with such standards, but is solely for the purpose of defining the extent of damage required in order to be considered structural damage.
(1) "ANSI" means the American National Standards Institute;
(2) "Building stabilization or foundation repairs" means techniques performed at, to, or attached to the existing foundation of a building with the intention to repair, re-level, or stabilize the building or foundation of a covered structure;
(3) "Covered structure" means any structure, including the personal property contained in the structure, to the extent covered under the terms of the policy;
(4) "Engineer" means a person meeting the qualifications under title 62, chapter 2, part 4 who has at least a bachelor's degree in engineering, and relevant experience and expertise in the identification of sinkhole activity, as well as other potential subterranean causes of structural damage;
(5) "Homeowner property insurance" means an insurance policy that includes coverage for a residential dwelling;
(6) "Land stabilization" means any repair technique intended to replace, rebuild, stabilize, or restore the land including any repair technique designed to compensate for or prevent land instability;
(7) "Primary structural member" means a structural element designed to support and stabilize the vertical or lateral loads of the overall structure;
(8) "Primary structural system" means an assemblage of primary structural members;
(9) "Professional geologist" means a person meeting the qualifications of title 62, chapter 36, who has at least a bachelor's degree in geology or a related earth science with expertise in the geology of this state, as well as having relevant geological experience and expertise identifying sinkhole activity, as well as other potential geologic causes of structural damage;
(10) "Sinkhole" means a subterranean void created by the dissolution of limestone or dolostone strata resulting from groundwater erosion causing a surface subsidence of soil, sediment, or rock;
(11) "Sinkhole activity" means settlement or systematic weakening of the earth supporting a covered structure, only if the settlement or systematic weakening results from contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of groundwater erosion on a limestone or similar rock formation;
(12) "Sinkhole loss": (A) Means structural damage to a covered structure caused by the sudden collapse of the earth supporting the covered structure as the result of sinkhole activity; and (B) Does not include: (i) Land stabilization or costs associated with land stabilization; or (ii) In the absence of structural damages to the covered structure, cracking, shrinking, expansion, deterioration, or similar damages; and
(A) Means structural damage to a covered structure caused by the sudden collapse of the earth supporting the covered structure as the result of sinkhole activity; and
(B) Does not include: (i) Land stabilization or costs associated with land stabilization; or (ii) In the absence of structural damages to the covered structure, cracking, shrinking, expansion, deterioration, or similar damages; and
(i) Land stabilization or costs associated with land stabilization; or
(ii) In the absence of structural damages to the covered structure, cracking, shrinking, expansion, deterioration, or similar damages; and
(13) (A) "Structural damage" means foundation displacement or deflection caused by a sinkhole after completion of initial construction of the covered structure, resulting in: (i) Interior floor displacement or deflection: (a) In excess of variances acceptable under building standards for residential construction approved by ANSI; and (b) To the extent that the interior building structure or members are unfit for service or represent a safety hazard; (ii) Damage to primary structural members or primary structural systems that: (a) Results in such members or systems failing to meet the strength and performance requirements set forth in building standards for residential construction approved by ANSI; and (b) Renders such structural members or structural systems unfit for service or a safety hazard; or (iii) Occupancy of the covered structure has been prohibited by a governmental agency because of unsafe conditions. (B) The reference in this subdivision (13) to building standards approved by ANSI shall not require the original construction of a covered structure to be in compliance with such standards, but is solely for the purpose of defining the extent of damage required in order to be considered structural damage.
(A) "Structural damage" means foundation displacement or deflection caused by a sinkhole after completion of initial construction of the covered structure, resulting in: (i) Interior floor displacement or deflection: (a) In excess of variances acceptable under building standards for residential construction approved by ANSI; and (b) To the extent that the interior building structure or members are unfit for service or represent a safety hazard; (ii) Damage to primary structural members or primary structural systems that: (a) Results in such members or systems failing to meet the strength and performance requirements set forth in building standards for residential construction approved by ANSI; and (b) Renders such structural members or structural systems unfit for service or a safety hazard; or (iii) Occupancy of the covered structure has been prohibited by a governmental agency because of unsafe conditions.
(i) Interior floor displacement or deflection: (a) In excess of variances acceptable under building standards for residential construction approved by ANSI; and (b) To the extent that the interior building structure or members are unfit for service or represent a safety hazard;
(a) In excess of variances acceptable under building standards for residential construction approved by ANSI; and
(b) To the extent that the interior building structure or members are unfit for service or represent a safety hazard;
(ii) Damage to primary structural members or primary structural systems that: (a) Results in such members or systems failing to meet the strength and performance requirements set forth in building standards for residential construction approved by ANSI; and (b) Renders such structural members or structural systems unfit for service or a safety hazard; or
(a) Results in such members or systems failing to meet the strength and performance requirements set forth in building standards for residential construction approved by ANSI; and
(b) Renders such structural members or structural systems unfit for service or a safety hazard; or
(iii) Occupancy of the covered structure has been prohibited by a governmental agency because of unsafe conditions.
(B) The reference in this subdivision (13) to building standards approved by ANSI shall not require the original construction of a covered structure to be in compliance with such standards, but is solely for the purpose of defining the extent of damage required in order to be considered structural damage.
(b) Every insurer offering homeowner property insurance in this state shall make coverage available for insurable sinkhole losses, including contents of personal property contained in the dwelling. The insurer may require an inspection of the property before issuance of sinkhole loss coverage. Nothing in this section mandates that sinkhole loss coverage be included in any homeowner property insurance policy, but only that insurers offering homeowner property insurance make such coverage available for optional purchase on request by policyholders.
(c) Every insurer offering homeowner property insurance in this state shall make a proper filing with the department to comply with this section. The insurer may make sinkhole loss coverage available in the homeowner policy itself, by endorsement, or through other coverage that the insurer may arrange, and the insurer may make an additional charge for the coverage.
(d) Upon receipt of a claim for a sinkhole loss under a policy providing sinkhole loss coverage, an insurer must meet the following standards in investigating the claim: (1) The insurer shall make an inspection of the insured's premises to determine if there has been structural damage to the covered structure resulting from possible sinkhole activity; (2) If, upon the investigation pursuant to subdivision (d)(1), the insurer determines that there is no sinkhole loss, the insurer may deny the claim; (3) If, the insurer concludes that structural damage to a covered structure is inconsistent with sinkhole activity, then prior to denying the claim, the insurer shall obtain a written certification from an engineer, a professional geologist, or other qualified individual stating that: (A) An analysis was conducted of sufficient scope to provide an opinion within a reasonable professional probability on the cause of the observed structural damage; and (B) Sinkhole activity did not cause the observed structural damage; and (4) If the insurer obtains, pursuant to subdivision (d)(3), written certification that the cause of the structural damage was not sinkhole activity, and if the policyholder has submitted the sinkhole claim without good faith grounds for submitting the claim, the policyholder shall reimburse the insurer for fifty percent (50%) of the cost of the analysis under subdivision (d)(3); provided, however, that a policyholder is not required to reimburse an insurer more than two thousand five hundred dollars ($2,500) with respect to any claim. A policyholder is required to pay reimbursement under this subdivision (d)(4), only if the insurer, prior to ordering the analysis pursuant to subdivision (d)(3), informs the policyholder of the policyholder's potential liability for reimbursement and gives the policyholder the opportunity to withdraw the claim.
(1) The insurer shall make an inspection of the insured's premises to determine if there has been structural damage to the covered structure resulting from possible sinkhole activity;
(2) If, upon the investigation pursuant to subdivision (d)(1), the insurer determines that there is no sinkhole loss, the insurer may deny the claim;
(3) If, the insurer concludes that structural damage to a covered structure is inconsistent with sinkhole activity, then prior to denying the claim, the insurer shall obtain a written certification from an engineer, a professional geologist, or other qualified individual stating that: (A) An analysis was conducted of sufficient scope to provide an opinion within a reasonable professional probability on the cause of the observed structural damage; and (B) Sinkhole activity did not cause the observed structural damage; and
(A) An analysis was conducted of sufficient scope to provide an opinion within a reasonable professional probability on the cause of the observed structural damage; and
(B) Sinkhole activity did not cause the observed structural damage; and
(4) If the insurer obtains, pursuant to subdivision (d)(3), written certification that the cause of the structural damage was not sinkhole activity, and if the policyholder has submitted the sinkhole claim without good faith grounds for submitting the claim, the policyholder shall reimburse the insurer for fifty percent (50%) of the cost of the analysis under subdivision (d)(3); provided, however, that a policyholder is not required to reimburse an insurer more than two thousand five hundred dollars ($2,500) with respect to any claim. A policyholder is required to pay reimbursement under this subdivision (d)(4), only if the insurer, prior to ordering the analysis pursuant to subdivision (d)(3), informs the policyholder of the policyholder's potential liability for reimbursement and gives the policyholder the opportunity to withdraw the claim.
(e) (1) If a covered sinkhole loss is verified by the insurer, the conduct of the insurer and policyholder is governed by this subsection (e), subject to the terms and conditions of the policy or endorsement. (2) The insurer may limit its total claims payment for damages to the covered structure to the actual cash value of the sinkhole loss to the covered structure, excluding costs associated with building stabilization or foundation repair, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs in accordance with the recommendations of the engineer retained or approved by the insurer. (3) To be eligible to receive payment for building stabilization or foundation repairs, or any other loss to the covered structure in excess of the actual cash value of the sinkhole loss to the covered structure, the insured must repair such damage or loss in accordance with a plan of repair approved by the insurer. (4) In order to prevent additional damage to the building or structure, the policyholder must enter into a contract for the performance of building stabilization and foundation repairs within ninety (90) days after the insurance company confirms coverage for the sinkhole loss and notifies the policyholder of such confirmation. (5) After the policyholder enters into the contract for the performance of building stabilization and foundation repairs as set forth in this subsection (e) and subject to the terms and conditions of the policy, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and expenses are incurred. The insurer may not require the policyholder to advance payment for covered repairs. (6) Without the prior written consent of the insurer, the policyholder may not accept anything of value from any person proposing to perform the repairs specified in this section as an inducement to contract with such person for the repairs. (7) The stabilization and all other repairs to the structure and contents must be completed within twelve (12) months after entering into the contract for repairs described in subdivision (e)(3) unless: (A) There is a mutual agreement between the insurer and the policyholder; (B) The claim is in litigation; (C) The claim is under appraisal or mediation; or (D) Repairs are undertaken but cannot be completed within twelve (12) months because of reasons beyond the control of the policyholder. (8) If the covered structure cannot be repaired or if the cost of repair exceeds policy limits, the terms and conditions of the policy or endorsement relative to losses in excess of policy limits shall apply.
(1) If a covered sinkhole loss is verified by the insurer, the conduct of the insurer and policyholder is governed by this subsection (e), subject to the terms and conditions of the policy or endorsement.
(2) The insurer may limit its total claims payment for damages to the covered structure to the actual cash value of the sinkhole loss to the covered structure, excluding costs associated with building stabilization or foundation repair, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs in accordance with the recommendations of the engineer retained or approved by the insurer.
(3) To be eligible to receive payment for building stabilization or foundation repairs, or any other loss to the covered structure in excess of the actual cash value of the sinkhole loss to the covered structure, the insured must repair such damage or loss in accordance with a plan of repair approved by the insurer.
(4) In order to prevent additional damage to the building or structure, the policyholder must enter into a contract for the performance of building stabilization and foundation repairs within ninety (90) days after the insurance company confirms coverage for the sinkhole loss and notifies the policyholder of such confirmation.
(5) After the policyholder enters into the contract for the performance of building stabilization and foundation repairs as set forth in this subsection (e) and subject to the terms and conditions of the policy, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and expenses are incurred. The insurer may not require the policyholder to advance payment for covered repairs.
(6) Without the prior written consent of the insurer, the policyholder may not accept anything of value from any person proposing to perform the repairs specified in this section as an inducement to contract with such person for the repairs.
(7) The stabilization and all other repairs to the structure and contents must be completed within twelve (12) months after entering into the contract for repairs described in subdivision (e)(3) unless: (A) There is a mutual agreement between the insurer and the policyholder; (B) The claim is in litigation; (C) The claim is under appraisal or mediation; or (D) Repairs are undertaken but cannot be completed within twelve (12) months because of reasons beyond the control of the policyholder.
(A) There is a mutual agreement between the insurer and the policyholder;
(B) The claim is in litigation;
(C) The claim is under appraisal or mediation; or
(D) Repairs are undertaken but cannot be completed within twelve (12) months because of reasons beyond the control of the policyholder.
(8) If the covered structure cannot be repaired or if the cost of repair exceeds policy limits, the terms and conditions of the policy or endorsement relative to losses in excess of policy limits shall apply.
(f) This subsection (f) shall not be construed as limiting an insurer's right to cancel, decline to renew, or decline to issue homeowner property insurance; provided, however, that an insurer may cancel, decline to renew, or decline to issue any homeowner property insurance on a structure that has been the subject of a sinkhole loss claim if the structure: (1) Has not been repaired in accordance with the plan of repair approved by the insurer and within the time constraints set forth in subdivision (e)(7); or (2) Is subject to the risk of future sinkhole damage because of unstable land.
(1) Has not been repaired in accordance with the plan of repair approved by the insurer and within the time constraints set forth in subdivision (e)(7); or
(2) Is subject to the risk of future sinkhole damage because of unstable land.
(g) Nothing in this section: (1) Requires an insurer to pay more than one (1) policy limit for one (1) policy loss due to a covered sinkhole loss; (2) Prohibits an insurer from inspecting property or engaging in other underwriting practices in connection with making available coverage for sinkhole losses; (3) Prohibits an insurer from offering coverage that is broader or more extensive than the offer of coverage required by this section; (4) Prohibits an insurer from including in a policy or endorsement terms and conditions that are not contrary to this section; or (5) Limits or creates any rights or obligations except as explicitly stated in this section.
(1) Requires an insurer to pay more than one (1) policy limit for one (1) policy loss due to a covered sinkhole loss;
(2) Prohibits an insurer from inspecting property or engaging in other underwriting practices in connection with making available coverage for sinkhole losses;
(3) Prohibits an insurer from offering coverage that is broader or more extensive than the offer of coverage required by this section;
(4) Prohibits an insurer from including in a policy or endorsement terms and conditions that are not contrary to this section; or
(5) Limits or creates any rights or obligations except as explicitly stated in this section.
(h) The commissioner may promulgate rules and regulations for the purpose of implementing this section.
Amended by 2015 Tenn. Acts, ch. 162,Secs.s2, s3 eff. 7/1/2015.
Amended by 2015 Tenn. Acts, ch. 162,s 1, eff. 7/1/2015.
Amended by 2014 Tenn. Acts, ch. 537,s 1, eff. 7/1/2014.
Acts 2006, ch. 805, § 1.
Tenn. Code Ann. § 56-7-1503 — TN Code / Title 56 / Chapter 7 / Section 56-7-1503
Contents of policies and certificates - Duplicate benefits - Preexisting conditions - Rules and regulations
Status: in_force

(a) No medicare supplement policy or certificate in force in this state shall contain benefits that duplicate benefits provided by medicare. (b) Notwithstanding any other law to the contrary, a medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six (6) months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six (6) months before the effective date of coverage. (c) The commissioner shall promulgate reasonable rules and regulations to establish specific standards for policy provisions of medicare supplement policies and certificates. The standards shall be in addition to and in accordance with applicable laws of this state, including chapter 26 of this title. No requirement of this title relating to minimum required policy benefits, other than the minimum standards contained in this part, shall apply to medicare supplement policies and certificates. The standards may cover, but are not limited to: (1) Terms of renewability; (2) Initial and subsequent conditions of eligibility; (3) Nonduplication of coverage; (4) Probationary periods; (5) Benefits limitations, exceptions and reductions; (6) Elimination periods; (7) Requirements for replacement; (8) Recurrent conditions; and (9) Definitions of terms. (d) The commissioner shall promulgate reasonable rules and regulations to establish minimum standards for benefits, claims payment, marketing practices and compensation arrangements and reporting practices for medicare supplement policies and certificates. (e) The commissioner may promulgate, from time to time, reasonable rules and regulations necessary to conform medicare supplement policies and certificates to the requirements of federal law and regulations promulgated under federal law, including, but not limited to: (1) Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements; (2) Establishing a uniform methodology for calculating and reporting loss ratios; (3) Assuring public access to policies, premiums and loss ratio information of issuers of medicare supplement insurance; (4) Establishing a process for approving or disapproving policy forms and certificate forms and proposed premium increases; (5) Establishing a policy for holding public hearings prior to approval of premium increases; and (6) Establishing standards for medicare select policies and certificates. (f) The commissioner shall promulgate reasonable rules and regulations that specify prohibited policy provisions not otherwise specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair or unfairly discriminatory to any person insured or proposed to be insured under a medicare supplement policy or certificate. (g) (1) (A) Insurers offering medicare supplement policies and certificates in this state to persons sixty-five (65) years of age or older shall also offer medicare supplement policies to persons in this state who are under sixty-five (65) years of age and eligible for and enrolled in medicare by reason of disability or end stage renal disease. Except as otherwise provided in this section, all benefits, protections, policies, and procedures that apply to persons sixty-five (65) years of age or older shall also apply to persons that are eligible for and enrolled in medicare by reason of disability or end stage renal disease. (B) Individuals who are under sixty-five (65) years of age and eligible for medicare by reason of disability or end stage renal disease may enroll in a medicare supplement policy at any time authorized or required by the federal government, or within six (6) months after: (i) Enrolling in medicare part B, or by January 1, 2011, whichever is later; (ii) The date of the notice that such person has been retroactively enrolled in medicare part B due to a retroactive eligibility decision made by the social security administration; (iii) No longer having access to alternative forms of health insurance coverage such as accident and sickness policies, employer-sponsored group health coverage or medicare advantage plans due to termination or cancellation of such coverage because of the individual's employment status, or an action by a health insurer or employer that is unrelated to the individual's status, conduct or failure to pay premiums; or (iv) Being involuntarily disenrolled from Title XIX (medicaid) or Title XXI (state children's health insurance program) of the Social Security Act ( 42 U.S.C. § 1396 et seq. and 42 U.S.C. § 1397aa et seq., respectively). (C) Premium rates for medicare supplement policies and certificates issued pursuant to this subsection (g) may differ between persons who qualify for medicare who are sixty-five (65) years of age or older and those who qualify for medicare by reason of disability or end stage renal disease and who are younger than sixty-five (65) years of age; provided, however, that such differences in premium rates are pursuant to rate schedules that are based on sound actuarial principles and are reasonable in relation to the benefits provided. (2) Upon the expiration of five (5) years from May 27, 2010, the department of commerce and insurance shall conduct a study for the purpose of determining the appropriateness of separate premium rating for populations under sixty-five (65) years of age and such study, at a minimum, shall evaluate whether continued separate premium rating is justified in comparison to any negative rating impact or increased cost in premium that would occur to the medicare supplement insurance population taken as a whole if such separate premium rating were not allowed. The cost of any such study shall be borne by the department within the existing resources of the department at the time of the study. Acts 1992, ch. 735, § 3; 2010, ch. 978, §§ 1, 2.
(a) No medicare supplement policy or certificate in force in this state shall contain benefits that duplicate benefits provided by medicare.
(b) Notwithstanding any other law to the contrary, a medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six (6) months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six (6) months before the effective date of coverage.
(c) The commissioner shall promulgate reasonable rules and regulations to establish specific standards for policy provisions of medicare supplement policies and certificates. The standards shall be in addition to and in accordance with applicable laws of this state, including chapter 26 of this title. No requirement of this title relating to minimum required policy benefits, other than the minimum standards contained in this part, shall apply to medicare supplement policies and certificates. The standards may cover, but are not limited to: (1) Terms of renewability; (2) Initial and subsequent conditions of eligibility; (3) Nonduplication of coverage; (4) Probationary periods; (5) Benefits limitations, exceptions and reductions; (6) Elimination periods; (7) Requirements for replacement; (8) Recurrent conditions; and (9) Definitions of terms.
(1) Terms of renewability;
(2) Initial and subsequent conditions of eligibility;
(3) Nonduplication of coverage;
(4) Probationary periods;
(5) Benefits limitations, exceptions and reductions;
(6) Elimination periods;
(7) Requirements for replacement;
(8) Recurrent conditions; and
(9) Definitions of terms.
(d) The commissioner shall promulgate reasonable rules and regulations to establish minimum standards for benefits, claims payment, marketing practices and compensation arrangements and reporting practices for medicare supplement policies and certificates.
(e) The commissioner may promulgate, from time to time, reasonable rules and regulations necessary to conform medicare supplement policies and certificates to the requirements of federal law and regulations promulgated under federal law, including, but not limited to: (1) Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements; (2) Establishing a uniform methodology for calculating and reporting loss ratios; (3) Assuring public access to policies, premiums and loss ratio information of issuers of medicare supplement insurance; (4) Establishing a process for approving or disapproving policy forms and certificate forms and proposed premium increases; (5) Establishing a policy for holding public hearings prior to approval of premium increases; and (6) Establishing standards for medicare select policies and certificates.
(1) Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements;
(2) Establishing a uniform methodology for calculating and reporting loss ratios;
(3) Assuring public access to policies, premiums and loss ratio information of issuers of medicare supplement insurance;
(4) Establishing a process for approving or disapproving policy forms and certificate forms and proposed premium increases;
(5) Establishing a policy for holding public hearings prior to approval of premium increases; and
(6) Establishing standards for medicare select policies and certificates.
(f) The commissioner shall promulgate reasonable rules and regulations that specify prohibited policy provisions not otherwise specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair or unfairly discriminatory to any person insured or proposed to be insured under a medicare supplement policy or certificate.
(g) (1) (A) Insurers offering medicare supplement policies and certificates in this state to persons sixty-five (65) years of age or older shall also offer medicare supplement policies to persons in this state who are under sixty-five (65) years of age and eligible for and enrolled in medicare by reason of disability or end stage renal disease. Except as otherwise provided in this section, all benefits, protections, policies, and procedures that apply to persons sixty-five (65) years of age or older shall also apply to persons that are eligible for and enrolled in medicare by reason of disability or end stage renal disease. (B) Individuals who are under sixty-five (65) years of age and eligible for medicare by reason of disability or end stage renal disease may enroll in a medicare supplement policy at any time authorized or required by the federal government, or within six (6) months after: (i) Enrolling in medicare part B, or by January 1, 2011, whichever is later; (ii) The date of the notice that such person has been retroactively enrolled in medicare part B due to a retroactive eligibility decision made by the social security administration; (iii) No longer having access to alternative forms of health insurance coverage such as accident and sickness policies, employer-sponsored group health coverage or medicare advantage plans due to termination or cancellation of such coverage because of the individual's employment status, or an action by a health insurer or employer that is unrelated to the individual's status, conduct or failure to pay premiums; or (iv) Being involuntarily disenrolled from Title XIX (medicaid) or Title XXI (state children's health insurance program) of the Social Security Act ( 42 U.S.C. § 1396 et seq. and 42 U.S.C. § 1397aa et seq., respectively). (C) Premium rates for medicare supplement policies and certificates issued pursuant to this subsection (g) may differ between persons who qualify for medicare who are sixty-five (65) years of age or older and those who qualify for medicare by reason of disability or end stage renal disease and who are younger than sixty-five (65) years of age; provided, however, that such differences in premium rates are pursuant to rate schedules that are based on sound actuarial principles and are reasonable in relation to the benefits provided. (2) Upon the expiration of five (5) years from May 27, 2010, the department of commerce and insurance shall conduct a study for the purpose of determining the appropriateness of separate premium rating for populations under sixty-five (65) years of age and such study, at a minimum, shall evaluate whether continued separate premium rating is justified in comparison to any negative rating impact or increased cost in premium that would occur to the medicare supplement insurance population taken as a whole if such separate premium rating were not allowed. The cost of any such study shall be borne by the department within the existing resources of the department at the time of the study.
(1) (A) Insurers offering medicare supplement policies and certificates in this state to persons sixty-five (65) years of age or older shall also offer medicare supplement policies to persons in this state who are under sixty-five (65) years of age and eligible for and enrolled in medicare by reason of disability or end stage renal disease. Except as otherwise provided in this section, all benefits, protections, policies, and procedures that apply to persons sixty-five (65) years of age or older shall also apply to persons that are eligible for and enrolled in medicare by reason of disability or end stage renal disease. (B) Individuals who are under sixty-five (65) years of age and eligible for medicare by reason of disability or end stage renal disease may enroll in a medicare supplement policy at any time authorized or required by the federal government, or within six (6) months after: (i) Enrolling in medicare part B, or by January 1, 2011, whichever is later; (ii) The date of the notice that such person has been retroactively enrolled in medicare part B due to a retroactive eligibility decision made by the social security administration; (iii) No longer having access to alternative forms of health insurance coverage such as accident and sickness policies, employer-sponsored group health coverage or medicare advantage plans due to termination or cancellation of such coverage because of the individual's employment status, or an action by a health insurer or employer that is unrelated to the individual's status, conduct or failure to pay premiums; or (iv) Being involuntarily disenrolled from Title XIX (medicaid) or Title XXI (state children's health insurance program) of the Social Security Act ( 42 U.S.C. § 1396 et seq. and 42 U.S.C. § 1397aa et seq., respectively). (C) Premium rates for medicare supplement policies and certificates issued pursuant to this subsection (g) may differ between persons who qualify for medicare who are sixty-five (65) years of age or older and those who qualify for medicare by reason of disability or end stage renal disease and who are younger than sixty-five (65) years of age; provided, however, that such differences in premium rates are pursuant to rate schedules that are based on sound actuarial principles and are reasonable in relation to the benefits provided.
(A) Insurers offering medicare supplement policies and certificates in this state to persons sixty-five (65) years of age or older shall also offer medicare supplement policies to persons in this state who are under sixty-five (65) years of age and eligible for and enrolled in medicare by reason of disability or end stage renal disease. Except as otherwise provided in this section, all benefits, protections, policies, and procedures that apply to persons sixty-five (65) years of age or older shall also apply to persons that are eligible for and enrolled in medicare by reason of disability or end stage renal disease.
(B) Individuals who are under sixty-five (65) years of age and eligible for medicare by reason of disability or end stage renal disease may enroll in a medicare supplement policy at any time authorized or required by the federal government, or within six (6) months after: (i) Enrolling in medicare part B, or by January 1, 2011, whichever is later; (ii) The date of the notice that such person has been retroactively enrolled in medicare part B due to a retroactive eligibility decision made by the social security administration; (iii) No longer having access to alternative forms of health insurance coverage such as accident and sickness policies, employer-sponsored group health coverage or medicare advantage plans due to termination or cancellation of such coverage because of the individual's employment status, or an action by a health insurer or employer that is unrelated to the individual's status, conduct or failure to pay premiums; or (iv) Being involuntarily disenrolled from Title XIX (medicaid) or Title XXI (state children's health insurance program) of the Social Security Act ( 42 U.S.C. § 1396 et seq. and 42 U.S.C. § 1397aa et seq., respectively).
(i) Enrolling in medicare part B, or by January 1, 2011, whichever is later;
(ii) The date of the notice that such person has been retroactively enrolled in medicare part B due to a retroactive eligibility decision made by the social security administration;
(iii) No longer having access to alternative forms of health insurance coverage such as accident and sickness policies, employer-sponsored group health coverage or medicare advantage plans due to termination or cancellation of such coverage because of the individual's employment status, or an action by a health insurer or employer that is unrelated to the individual's status, conduct or failure to pay premiums; or
(iv) Being involuntarily disenrolled from Title XIX (medicaid) or Title XXI (state children's health insurance program) of the Social Security Act ( 42 U.S.C. § 1396 et seq. and 42 U.S.C. § 1397aa et seq., respectively).
(C) Premium rates for medicare supplement policies and certificates issued pursuant to this subsection (g) may differ between persons who qualify for medicare who are sixty-five (65) years of age or older and those who qualify for medicare by reason of disability or end stage renal disease and who are younger than sixty-five (65) years of age; provided, however, that such differences in premium rates are pursuant to rate schedules that are based on sound actuarial principles and are reasonable in relation to the benefits provided.
(2) Upon the expiration of five (5) years from May 27, 2010, the department of commerce and insurance shall conduct a study for the purpose of determining the appropriateness of separate premium rating for populations under sixty-five (65) years of age and such study, at a minimum, shall evaluate whether continued separate premium rating is justified in comparison to any negative rating impact or increased cost in premium that would occur to the medicare supplement insurance population taken as a whole if such separate premium rating were not allowed. The cost of any such study shall be borne by the department within the existing resources of the department at the time of the study.
Acts 1992, ch. 735, § 3; 2010, ch. 978, §§ 1, 2.