Tenn. Code Ann. § 56-7-2803 — TN Code / Title 56 / Chapter 7 / Section 56-7-2803
Preexisting condition exclusions - Period of creditable coverage - Special enrollment periods
Status: in_force

(a) A group health plan, and a health insurance issuer offering group health insurance coverage, may, with respect to a participant or beneficiary, impose a preexisting condition exclusion only if: (1) The exclusion relates to a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the six-month period ending on the enrollment date; (2) The exclusion extends for a period of not more than twelve (12) months, or eighteen (18) months in the case of a late enrollee, after the enrollment date; and (3) The period of the preexisting condition exclusion is reduced by the aggregate of periods of creditable coverage applicable to the participant or beneficiary as of the enrollment date. (b) A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group health plan, if, after the period and before the enrollment date, there was a sixty-three-day period during all of which the individual was not covered under any creditable coverage. (c) Any period that an individual is in a waiting period for any coverage under a group health plan, or for group health insurance coverage, or is in an affiliation period shall not be taken into account in determining the continuous period under subsection (b). (d) Method of Crediting Coverage. (1) Standard Method. Except as otherwise provided under subdivision (d)(2), a group health plan, and a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period. (2) Election of Alternative Method. A group health plan, or a health insurance issuer offering group health insurance, may elect to credit coverage based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subdivision (d)(1). The election shall be made on a uniform basis for all participants and beneficiaries. Under the election a group health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category. (3) In the case of an election with respect to a group health plan under subdivision (d)(2), whether or not health insurance coverage is provided in connection with the plan, the plan shall: (A) Prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made the election; and (B) Include in the statements a description of the effect of this election. (4) Issuer Notice. In the case of an election under subdivision (d)(2) with respect to health insurance coverage offered by an issuer in the small or large group market, the issuer: (A) Shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made the election; and (B) Shall include in the statements a description of the effect of the election. (e) Establishment of Period. Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in subsection (g) or in any other manner specified in regulations. (f) Exceptions. (1) Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the thirty-day period beginning with the date of birth, is covered under creditable coverage. (2) Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining eighteen (18) years of age and who, as of the last day of the thirty-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. This subdivision (f)(2) shall not apply to coverage before the date of the adoption or placement for adoption. (3) A group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition. (4) Subdivisions (f)(1) and (2) shall no longer apply to an individual after the end of the first sixty-three-day period during all of which the individual was not covered under any creditable coverage. (g) Certifications and Disclosures of Coverage. (1) A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certification described in subdivision (g)(2): (A) At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision; (B) In the case of an individual becoming covered under a COBRA continuation provision, at the time the individual ceases to be covered under the provision; and (C) On request on behalf of an individual made not later than twenty-four (24) months after the date of cessation of the coverage described in subdivision (g)(1)(A) or (B), whichever is later. The certification under subdivision (g)(1)(A) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision. (2) The certification described in this subsection (g) is a written certification of: (A) The period of creditable coverage of the individual under the plan and the coverage, if any, under the COBRA continuation provision; and (B) The waiting period, if any, and affiliation period, if applicable, imposed with respect to the individual for any coverage under the plan. (3) To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this subsection (g) if the health insurance issuer offering the coverage provides for the certification in accordance with this subsection (g). (4) Disclosure of Information on Previous Benefits. In the case of an election described in subdivision (d)(2) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under subdivision (g)(1): (A) Upon request of the plan or issuer, the entity that issued the certification provided by the individual shall promptly disclose to the requesting plan or issuer information on coverage of classes and categories of health benefits available under the entity's plan or coverage; and (B) The entity may charge the requesting plan or issuer for the reasonable cost of disclosing the information. (5) Regulations. The commissioner is authorized to establish rules to prevent an entity's failure to provide information with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage. (h) Special enrollment periods. (1) For Individuals Losing Other Coverage. As used in this subsection (h), "health insurance coverage" includes the TennCare program as administered by the department of finance and administration. (2) A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan, or a dependent of the employee if the dependent is eligible but not enrolled for coverage under the terms, to enroll for coverage under the terms of the plan if each of the following conditions is met: (A) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent; (B) The employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer, if applicable, required the statement at the time and provided the employee with notice of the requirement, and the consequences of the requirement, at that time; (C) The employee's or dependent's coverage described in subdivision (h)(2)(A): (i) Was under a COBRA continuation provision and the coverage under the provision was exhausted; or (ii) Was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage, including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or employer contributions toward the coverage were terminated; and (D) Under the terms of the plan, the employee requests enrollment not later than thirty (30) days after one (1) of the events described in subdivision (h)(2)(C). (3) For Dependents. (A) In general, the group health plan shall provide for a dependent special enrollment period described in subdivision (h)(3)(B) during which the person, or, if not otherwise enrolled, the individual, may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if the spouse is otherwise eligible for coverage, if: (i) A group health plan makes coverage available with respect to a dependent of an individual; (ii) The individual is a participant under the plan, or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and (iii) A person becomes a dependent of the individual through marriage, birth, or adoption or placement for adoption. (B) Dependent Special Enrollment Period. A dependent special enrollment period under this subsection (h) shall be a period of not less than thirty (30) days and shall begin on the later of: (i) The date dependent coverage is made available; or (ii) The date of the marriage, birth, or adoption or placement for adoption, as the case may be, described in subdivision (h)(3)(A)(iii). (C) No Waiting Period. If an individual seeks to enroll a dependent during the first thirty (30) days of a dependent special enrollment period, the coverage of the dependent shall become effective: (i) In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received; (ii) In the case of a dependent's birth, as of the date of birth; or (iii) In the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption. (i) Use of Affiliation Period by HMOs as an Alternative to Preexisting Condition Exclusion. (1) An HMO that offers health insurance coverage in connection with a group health plan and that does not impose any preexisting condition exclusion allowed under subsection (a) with respect to any particular coverage option may impose an affiliation period for the coverage option, but only if: (A) The period is applied uniformly without regard to any health status-related factors; and (B) The period does not exceed two (2) months, or three (3) months in the case of a late enrollee. (2) An HMO may use alternative methods from those described in subdivision (i)(1) to address adverse selection as approved by the commissioner. Acts 1997, ch. 157, § 4; 2001, ch. 262, § 1.
(a) A group health plan, and a health insurance issuer offering group health insurance coverage, may, with respect to a participant or beneficiary, impose a preexisting condition exclusion only if: (1) The exclusion relates to a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the six-month period ending on the enrollment date; (2) The exclusion extends for a period of not more than twelve (12) months, or eighteen (18) months in the case of a late enrollee, after the enrollment date; and (3) The period of the preexisting condition exclusion is reduced by the aggregate of periods of creditable coverage applicable to the participant or beneficiary as of the enrollment date.
(1) The exclusion relates to a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the six-month period ending on the enrollment date;
(2) The exclusion extends for a period of not more than twelve (12) months, or eighteen (18) months in the case of a late enrollee, after the enrollment date; and
(3) The period of the preexisting condition exclusion is reduced by the aggregate of periods of creditable coverage applicable to the participant or beneficiary as of the enrollment date.
(b) A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group health plan, if, after the period and before the enrollment date, there was a sixty-three-day period during all of which the individual was not covered under any creditable coverage.
(c) Any period that an individual is in a waiting period for any coverage under a group health plan, or for group health insurance coverage, or is in an affiliation period shall not be taken into account in determining the continuous period under subsection (b).
(d) Method of Crediting Coverage. (1) Standard Method. Except as otherwise provided under subdivision (d)(2), a group health plan, and a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period. (2) Election of Alternative Method. A group health plan, or a health insurance issuer offering group health insurance, may elect to credit coverage based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subdivision (d)(1). The election shall be made on a uniform basis for all participants and beneficiaries. Under the election a group health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category. (3) In the case of an election with respect to a group health plan under subdivision (d)(2), whether or not health insurance coverage is provided in connection with the plan, the plan shall: (A) Prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made the election; and (B) Include in the statements a description of the effect of this election. (4) Issuer Notice. In the case of an election under subdivision (d)(2) with respect to health insurance coverage offered by an issuer in the small or large group market, the issuer: (A) Shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made the election; and (B) Shall include in the statements a description of the effect of the election.
(1) Standard Method. Except as otherwise provided under subdivision (d)(2), a group health plan, and a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period.
(2) Election of Alternative Method. A group health plan, or a health insurance issuer offering group health insurance, may elect to credit coverage based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subdivision (d)(1). The election shall be made on a uniform basis for all participants and beneficiaries. Under the election a group health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category.
(3) In the case of an election with respect to a group health plan under subdivision (d)(2), whether or not health insurance coverage is provided in connection with the plan, the plan shall: (A) Prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made the election; and (B) Include in the statements a description of the effect of this election.
(A) Prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made the election; and
(B) Include in the statements a description of the effect of this election.
(4) Issuer Notice. In the case of an election under subdivision (d)(2) with respect to health insurance coverage offered by an issuer in the small or large group market, the issuer: (A) Shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made the election; and (B) Shall include in the statements a description of the effect of the election.
(A) Shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made the election; and
(B) Shall include in the statements a description of the effect of the election.
(e) Establishment of Period. Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in subsection (g) or in any other manner specified in regulations.
(f) Exceptions. (1) Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the thirty-day period beginning with the date of birth, is covered under creditable coverage. (2) Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining eighteen (18) years of age and who, as of the last day of the thirty-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. This subdivision (f)(2) shall not apply to coverage before the date of the adoption or placement for adoption. (3) A group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition. (4) Subdivisions (f)(1) and (2) shall no longer apply to an individual after the end of the first sixty-three-day period during all of which the individual was not covered under any creditable coverage.
(1) Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the thirty-day period beginning with the date of birth, is covered under creditable coverage.
(2) Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining eighteen (18) years of age and who, as of the last day of the thirty-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. This subdivision (f)(2) shall not apply to coverage before the date of the adoption or placement for adoption.
(3) A group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition.
(4) Subdivisions (f)(1) and (2) shall no longer apply to an individual after the end of the first sixty-three-day period during all of which the individual was not covered under any creditable coverage.
(g) Certifications and Disclosures of Coverage. (1) A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certification described in subdivision (g)(2): (A) At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision; (B) In the case of an individual becoming covered under a COBRA continuation provision, at the time the individual ceases to be covered under the provision; and (C) On request on behalf of an individual made not later than twenty-four (24) months after the date of cessation of the coverage described in subdivision (g)(1)(A) or (B), whichever is later. The certification under subdivision (g)(1)(A) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision. (2) The certification described in this subsection (g) is a written certification of: (A) The period of creditable coverage of the individual under the plan and the coverage, if any, under the COBRA continuation provision; and (B) The waiting period, if any, and affiliation period, if applicable, imposed with respect to the individual for any coverage under the plan. (3) To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this subsection (g) if the health insurance issuer offering the coverage provides for the certification in accordance with this subsection (g). (4) Disclosure of Information on Previous Benefits. In the case of an election described in subdivision (d)(2) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under subdivision (g)(1): (A) Upon request of the plan or issuer, the entity that issued the certification provided by the individual shall promptly disclose to the requesting plan or issuer information on coverage of classes and categories of health benefits available under the entity's plan or coverage; and (B) The entity may charge the requesting plan or issuer for the reasonable cost of disclosing the information. (5) Regulations. The commissioner is authorized to establish rules to prevent an entity's failure to provide information with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage.
(1) A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certification described in subdivision (g)(2): (A) At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision; (B) In the case of an individual becoming covered under a COBRA continuation provision, at the time the individual ceases to be covered under the provision; and (C) On request on behalf of an individual made not later than twenty-four (24) months after the date of cessation of the coverage described in subdivision (g)(1)(A) or (B), whichever is later. The certification under subdivision (g)(1)(A) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.
(A) At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision;
(B) In the case of an individual becoming covered under a COBRA continuation provision, at the time the individual ceases to be covered under the provision; and
(C) On request on behalf of an individual made not later than twenty-four (24) months after the date of cessation of the coverage described in subdivision (g)(1)(A) or (B), whichever is later. The certification under subdivision (g)(1)(A) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.
(2) The certification described in this subsection (g) is a written certification of: (A) The period of creditable coverage of the individual under the plan and the coverage, if any, under the COBRA continuation provision; and (B) The waiting period, if any, and affiliation period, if applicable, imposed with respect to the individual for any coverage under the plan.
(A) The period of creditable coverage of the individual under the plan and the coverage, if any, under the COBRA continuation provision; and
(B) The waiting period, if any, and affiliation period, if applicable, imposed with respect to the individual for any coverage under the plan.
(3) To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this subsection (g) if the health insurance issuer offering the coverage provides for the certification in accordance with this subsection (g).
(4) Disclosure of Information on Previous Benefits. In the case of an election described in subdivision (d)(2) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under subdivision (g)(1): (A) Upon request of the plan or issuer, the entity that issued the certification provided by the individual shall promptly disclose to the requesting plan or issuer information on coverage of classes and categories of health benefits available under the entity's plan or coverage; and (B) The entity may charge the requesting plan or issuer for the reasonable cost of disclosing the information.
(A) Upon request of the plan or issuer, the entity that issued the certification provided by the individual shall promptly disclose to the requesting plan or issuer information on coverage of classes and categories of health benefits available under the entity's plan or coverage; and
(B) The entity may charge the requesting plan or issuer for the reasonable cost of disclosing the information.
(5) Regulations. The commissioner is authorized to establish rules to prevent an entity's failure to provide information with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage.
(h) Special enrollment periods. (1) For Individuals Losing Other Coverage. As used in this subsection (h), "health insurance coverage" includes the TennCare program as administered by the department of finance and administration. (2) A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan, or a dependent of the employee if the dependent is eligible but not enrolled for coverage under the terms, to enroll for coverage under the terms of the plan if each of the following conditions is met: (A) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent; (B) The employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer, if applicable, required the statement at the time and provided the employee with notice of the requirement, and the consequences of the requirement, at that time; (C) The employee's or dependent's coverage described in subdivision (h)(2)(A): (i) Was under a COBRA continuation provision and the coverage under the provision was exhausted; or (ii) Was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage, including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or employer contributions toward the coverage were terminated; and (D) Under the terms of the plan, the employee requests enrollment not later than thirty (30) days after one (1) of the events described in subdivision (h)(2)(C). (3) For Dependents. (A) In general, the group health plan shall provide for a dependent special enrollment period described in subdivision (h)(3)(B) during which the person, or, if not otherwise enrolled, the individual, may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if the spouse is otherwise eligible for coverage, if: (i) A group health plan makes coverage available with respect to a dependent of an individual; (ii) The individual is a participant under the plan, or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and (iii) A person becomes a dependent of the individual through marriage, birth, or adoption or placement for adoption. (B) Dependent Special Enrollment Period. A dependent special enrollment period under this subsection (h) shall be a period of not less than thirty (30) days and shall begin on the later of: (i) The date dependent coverage is made available; or (ii) The date of the marriage, birth, or adoption or placement for adoption, as the case may be, described in subdivision (h)(3)(A)(iii). (C) No Waiting Period. If an individual seeks to enroll a dependent during the first thirty (30) days of a dependent special enrollment period, the coverage of the dependent shall become effective: (i) In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received; (ii) In the case of a dependent's birth, as of the date of birth; or (iii) In the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption.
(1) For Individuals Losing Other Coverage. As used in this subsection (h), "health insurance coverage" includes the TennCare program as administered by the department of finance and administration.
(2) A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan, or a dependent of the employee if the dependent is eligible but not enrolled for coverage under the terms, to enroll for coverage under the terms of the plan if each of the following conditions is met: (A) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent; (B) The employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer, if applicable, required the statement at the time and provided the employee with notice of the requirement, and the consequences of the requirement, at that time; (C) The employee's or dependent's coverage described in subdivision (h)(2)(A): (i) Was under a COBRA continuation provision and the coverage under the provision was exhausted; or (ii) Was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage, including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or employer contributions toward the coverage were terminated; and (D) Under the terms of the plan, the employee requests enrollment not later than thirty (30) days after one (1) of the events described in subdivision (h)(2)(C).
(A) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent;
(B) The employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer, if applicable, required the statement at the time and provided the employee with notice of the requirement, and the consequences of the requirement, at that time;
(C) The employee's or dependent's coverage described in subdivision (h)(2)(A): (i) Was under a COBRA continuation provision and the coverage under the provision was exhausted; or (ii) Was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage, including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or employer contributions toward the coverage were terminated; and
(i) Was under a COBRA continuation provision and the coverage under the provision was exhausted; or
(ii) Was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage, including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or employer contributions toward the coverage were terminated; and
(D) Under the terms of the plan, the employee requests enrollment not later than thirty (30) days after one (1) of the events described in subdivision (h)(2)(C).
(3) For Dependents. (A) In general, the group health plan shall provide for a dependent special enrollment period described in subdivision (h)(3)(B) during which the person, or, if not otherwise enrolled, the individual, may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if the spouse is otherwise eligible for coverage, if: (i) A group health plan makes coverage available with respect to a dependent of an individual; (ii) The individual is a participant under the plan, or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and (iii) A person becomes a dependent of the individual through marriage, birth, or adoption or placement for adoption. (B) Dependent Special Enrollment Period. A dependent special enrollment period under this subsection (h) shall be a period of not less than thirty (30) days and shall begin on the later of: (i) The date dependent coverage is made available; or (ii) The date of the marriage, birth, or adoption or placement for adoption, as the case may be, described in subdivision (h)(3)(A)(iii). (C) No Waiting Period. If an individual seeks to enroll a dependent during the first thirty (30) days of a dependent special enrollment period, the coverage of the dependent shall become effective: (i) In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received; (ii) In the case of a dependent's birth, as of the date of birth; or (iii) In the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption.
(A) In general, the group health plan shall provide for a dependent special enrollment period described in subdivision (h)(3)(B) during which the person, or, if not otherwise enrolled, the individual, may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if the spouse is otherwise eligible for coverage, if: (i) A group health plan makes coverage available with respect to a dependent of an individual; (ii) The individual is a participant under the plan, or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and (iii) A person becomes a dependent of the individual through marriage, birth, or adoption or placement for adoption.
(i) A group health plan makes coverage available with respect to a dependent of an individual;
(ii) The individual is a participant under the plan, or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and
(iii) A person becomes a dependent of the individual through marriage, birth, or adoption or placement for adoption.
(B) Dependent Special Enrollment Period. A dependent special enrollment period under this subsection (h) shall be a period of not less than thirty (30) days and shall begin on the later of: (i) The date dependent coverage is made available; or (ii) The date of the marriage, birth, or adoption or placement for adoption, as the case may be, described in subdivision (h)(3)(A)(iii).
(i) The date dependent coverage is made available; or
(ii) The date of the marriage, birth, or adoption or placement for adoption, as the case may be, described in subdivision (h)(3)(A)(iii).
(C) No Waiting Period. If an individual seeks to enroll a dependent during the first thirty (30) days of a dependent special enrollment period, the coverage of the dependent shall become effective: (i) In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received; (ii) In the case of a dependent's birth, as of the date of birth; or (iii) In the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption.
(i) In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received;
(ii) In the case of a dependent's birth, as of the date of birth; or
(iii) In the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption.
(i) Use of Affiliation Period by HMOs as an Alternative to Preexisting Condition Exclusion. (1) An HMO that offers health insurance coverage in connection with a group health plan and that does not impose any preexisting condition exclusion allowed under subsection (a) with respect to any particular coverage option may impose an affiliation period for the coverage option, but only if: (A) The period is applied uniformly without regard to any health status-related factors; and (B) The period does not exceed two (2) months, or three (3) months in the case of a late enrollee. (2) An HMO may use alternative methods from those described in subdivision (i)(1) to address adverse selection as approved by the commissioner.
(1) An HMO that offers health insurance coverage in connection with a group health plan and that does not impose any preexisting condition exclusion allowed under subsection (a) with respect to any particular coverage option may impose an affiliation period for the coverage option, but only if: (A) The period is applied uniformly without regard to any health status-related factors; and (B) The period does not exceed two (2) months, or three (3) months in the case of a late enrollee.
(A) The period is applied uniformly without regard to any health status-related factors; and
(B) The period does not exceed two (2) months, or three (3) months in the case of a late enrollee.
(2) An HMO may use alternative methods from those described in subdivision (i)(1) to address adverse selection as approved by the commissioner.
Acts 1997, ch. 157, § 4; 2001, ch. 262, § 1.
Tenn. Code Ann. § 56-37-103 — TN Code / Title 56 / Chapter 37 / Section 56-37-103
License required - Renewal - Fees - Disclosure - Rules and regulations
Status: in_force

(a) No person shall engage in the business of a premium finance company in this state without first having obtained a license as a premium finance company from the commissioner. (b) (1) Licenses issued pursuant to this chapter expire on December 31. A license may be renewed for the ensuing twelve-month period upon application by the license holder showing continued compliance with the requirements of this section and payment of the nonrefundable supervision fee, as provided in § 45-1-118(i) . The supervision fee is applicable to each location. A licensee making timely and complete application for renewal of its license may continue to operate under its existing license until its application is approved or denied. The completed renewal application and the payment of the annual supervision fee must be sent to the department on or before December 31, but no earlier than November 1, of each year. (2) A licensee submitting a renewal application pursuant to this chapter for a license expiring on March 31, 2019, must pay the supervision fee as provided in § 45-1-118(i) for each location. The completed renewal application and payment must be sent to the department on or before March 1, 2019. A renewed license issued under this chapter with a beginning effective date of April 1, 2019, expires on December 31, 2019. (c) The commissioner has the authority, at any time, to require the applicant to disclose fully the identity of all stockholders, partners, officers, and employees, and has discretion to refuse to issue or renew a license in the name of any firm, partnership or corporation if not satisfied that any officer, employee, stockholder or partner thereof who may materially influence the applicant's conduct meets the standards of this chapter. (d) The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this chapter. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. (e) The commissioner may employ persons as necessary to examine or investigate and make reports on alleged violations of this chapter or compliance with the other provisions of this chapter. The costs for an examination or investigation of licensees shall be assessed pursuant to § 45-1-118(i) . An unlicensed person subject to the licensing requirements of this chapter, who is examined or investigated in accordance with this chapter, shall pay to the commissioner the reasonable and actual expenses of the investigation or examination. (f) The commissioner may establish a biennial license arrangement for the filing of the application for licensure renewal, but in no case shall the supervision fee be payable for more than one (1) year at a time. Amended by 2017 Tenn. Acts, ch. 122,Sec.s13, eff. 7/1/2018 and s 12 eff. 4/1/2019. Amended by 2014 Tenn. Acts, ch. 736,s 35, eff. 7/1/2015. Amended by 2014 Tenn. Acts, ch. 736,s 34, eff. 7/1/2015. Acts 1980, ch. 920, § 3.
(a) No person shall engage in the business of a premium finance company in this state without first having obtained a license as a premium finance company from the commissioner.
(b) (1) Licenses issued pursuant to this chapter expire on December 31. A license may be renewed for the ensuing twelve-month period upon application by the license holder showing continued compliance with the requirements of this section and payment of the nonrefundable supervision fee, as provided in § 45-1-118(i) . The supervision fee is applicable to each location. A licensee making timely and complete application for renewal of its license may continue to operate under its existing license until its application is approved or denied. The completed renewal application and the payment of the annual supervision fee must be sent to the department on or before December 31, but no earlier than November 1, of each year. (2) A licensee submitting a renewal application pursuant to this chapter for a license expiring on March 31, 2019, must pay the supervision fee as provided in § 45-1-118(i) for each location. The completed renewal application and payment must be sent to the department on or before March 1, 2019. A renewed license issued under this chapter with a beginning effective date of April 1, 2019, expires on December 31, 2019.
(1) Licenses issued pursuant to this chapter expire on December 31. A license may be renewed for the ensuing twelve-month period upon application by the license holder showing continued compliance with the requirements of this section and payment of the nonrefundable supervision fee, as provided in § 45-1-118(i) . The supervision fee is applicable to each location. A licensee making timely and complete application for renewal of its license may continue to operate under its existing license until its application is approved or denied. The completed renewal application and the payment of the annual supervision fee must be sent to the department on or before December 31, but no earlier than November 1, of each year.
(2) A licensee submitting a renewal application pursuant to this chapter for a license expiring on March 31, 2019, must pay the supervision fee as provided in § 45-1-118(i) for each location. The completed renewal application and payment must be sent to the department on or before March 1, 2019. A renewed license issued under this chapter with a beginning effective date of April 1, 2019, expires on December 31, 2019.
(c) The commissioner has the authority, at any time, to require the applicant to disclose fully the identity of all stockholders, partners, officers, and employees, and has discretion to refuse to issue or renew a license in the name of any firm, partnership or corporation if not satisfied that any officer, employee, stockholder or partner thereof who may materially influence the applicant's conduct meets the standards of this chapter.
(d) The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this chapter. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
(e) The commissioner may employ persons as necessary to examine or investigate and make reports on alleged violations of this chapter or compliance with the other provisions of this chapter. The costs for an examination or investigation of licensees shall be assessed pursuant to § 45-1-118(i) . An unlicensed person subject to the licensing requirements of this chapter, who is examined or investigated in accordance with this chapter, shall pay to the commissioner the reasonable and actual expenses of the investigation or examination.
(f) The commissioner may establish a biennial license arrangement for the filing of the application for licensure renewal, but in no case shall the supervision fee be payable for more than one (1) year at a time.
Amended by 2017 Tenn. Acts, ch. 122,Sec.s13, eff. 7/1/2018 and s 12 eff. 4/1/2019.
Amended by 2014 Tenn. Acts, ch. 736,s 35, eff. 7/1/2015.
Amended by 2014 Tenn. Acts, ch. 736,s 34, eff. 7/1/2015.
Acts 1980, ch. 920, § 3.
Tenn. Code Ann. § 56-19-125 — TN Code / Title 56 / Chapter 19 / Section 56-19-125
State malpractice insurance companies becoming state stock malpractice insurance companies - Definitions - Plans
Status: in_force

(a) A state malpractice insurance company organized under Tennessee law may become a state stock malpractice insurance company operating under this chapter pursuant to a plan and procedure that is approved in advance by the commissioner. The commissioner shall not approve any such plan or procedure unless: (1) The plan or procedure is equitable to the insurer's policyholders; (2) The plan or procedure is subject to approval by vote of not less than three fourths (3/4) of the votes cast in person, by proxy, or by mail at a meeting of policyholders called for the purpose pursuant to the notice and procedure as may be approved by the commissioner; (3) The equity of each policyholder in the insurer is determinable under a fair formula approved by the commissioner. The equity shall be based upon not less than the insurer's entire surplus, after deducting contributed or borrowed surplus funds and any outstanding guaranty capital securities, plus a reasonable present equity in its reserves and in all nonadmitted assets; (4) The policyholders entitled to receive stock upon conversion and to participate in the purchase of additional stock, if any, include all policyholders having policies in force on the date of conversion; (5) The plan provides that each policyholder of the insurer specified in subdivision (a)(4) shall receive a proportionate part of the capital stock to be issued in respect to the policyholders' equity. The plan also gives to each such policyholder a nontransferable preemptive right to acquire a proportionate part of any additional capital stock to be issued and sold by the insurer, within a designated reasonable period. In addition to the issuance of shares with respect to the policyholders' equity, if the insurer has outstanding guaranty capital securities, the plan shall require the sale of a sufficient number of shares (at the same price per share as all other shares issued under the plan) to retire the guaranty capital securities. To the extent each policyholder specified in subdivision (4) does not exercise the preemptive right to purchase a pro rata number of shares to retire the guaranty capital securities, the holders of the guaranty capital securities shall have the right to convert the securities, including all accrued interest, into shares of capital stock at such price; (6) Shares are so offered to policyholders at a price not greater than that thereafter offered to others nor at more than five (5) times the par value of the shares; and (7) The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a state stock insurer under this chapter; provided, that this provision does not apply to any converting mutual companies that were qualified and authorized under this chapter prior to May 7, 1969. (b) (1) As used in this section, unless the context otherwise requires: (A) "Commissioner" is the commissioner of commerce and insurance; (B) "Converted stock company" is a Tennessee domiciled stock company that converted from a Tennessee domiciled mutual company under this section; (C) "Eligible member" is a member whose policy is in force as of the date the mutual company's board of directors adopts a plan of conversion. A person whose policy is issued after the board of directors adopts the plan but before the plan's effective date is not an eligible member but shall have those rights set forth in subdivision (b)(10); and (D) "Plan of conversion" or "plan" is a plan adopted by a Tennessee domestic mutual company's board of directors under this section to convert the mutual company into a Tennessee domiciled stock company. (2) (A) A mutual company seeking to convert to a stock company shall, by the affirmative vote of not less than two thirds (2/3) of its board of directors, adopt a plan of conversion consistent with the requirements of subdivision (b)(6). (B) At any time before approval of a plan by the commissioner, the mutual company by the affirmative vote of two thirds (2/3) of its board of directors, may amend or withdraw the plan. (3) (A) After adoption by the mutual company's board of directors, the plan shall be submitted to the commissioner for review and approval. The commissioner shall approve the plan upon finding that: (i) This subsection (b) has been complied with; (ii) The plan will not prejudice the interests of the members; and (iii) The plan's method of allocating subscription rights is fair and equitable. (B) (i) (a) Prior to the members' approval of the plan, a mutual company seeking the commissioner's approval of a plan shall file the following documents with the commissioner for review and approval: (1) The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F); (2) The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan; (3) Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii); (4) The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and (5) The proposed charter and bylaws of the converted stock company. (b) Once filed, these documents shall be approved or disapproved by the commissioner within a reasonable time. (ii) After the members have approved the plan, the converted stock company shall file the following documents with the commissioner: (a) The minutes of the meeting of the members at which the plan was voted upon; and (b) The revised charter and bylaws of the converted stock company. (C) The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing the plan and the independent evaluation of the pro forma market value that is required by subdivision (b)(6)(F). (4) (A) All eligible members shall be given notice of and an opportunity to vote upon the plan. (B) All eligible members shall be given notice of the members' meeting to vote upon the plan. A copy of the plan or a summary of the plan shall accompany the notice. The notice shall be mailed to each member's last known address, as shown on the mutual company's records, within forty-five (45) days of the commissioner's approval of the plan. The meeting to vote upon the plan shall not be set for a date less than sixty (60) days after the date when the notice of the meeting is mailed by the mutual company. If the meeting to vote upon the plan is held coincident with the mutual company's annual meeting of policyholders, only one (1) combined notice of meeting is required. (C) (i) After approval by the commissioner, the plan shall be adopted upon receiving the affirmative vote of at least two thirds (2/3) of the votes cast by eligible members. (ii) Members entitled to vote upon the proposed plan may vote in person or by proxy. Any proxies to be solicited from eligible members shall be filed with and approved by the commissioner. (iii) The number of votes each eligible member may cast shall be determined by the mutual company's bylaws. If the bylaws are silent, each eligible member may cast one (1) vote. (5) Adoption of the revised charter of the converted stock company is necessary to implement the plan and shall be governed by the applicable provisions of the general corporation law. The revised charter may be adopted solely by the board of directors. (6) The following provisions shall be included in the plan: (A) The plan shall set forth the reasons for the proposed conversion; (B) (i) The plan shall provide that all policies in force on the effective date of conversion shall continue to remain in force under the terms of those policies, except that any voting rights of the policyholders provided for under the policies or under this code, and any contingent liability policy provisions of the type described in § 56-19-116 shall be extinguished on the effective date of the conversion; (ii) The plan shall further provide that holders of participating policies in effect on the date of conversion shall continue to have the right to receive dividends as provided in the participating policies, if any; (iii) The converted stock company may issue the insured a nonparticipating policy as a substitute for a participating policy upon the renewal date of a participating policy; (C) (i) The plan shall provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company. As an alternative to subscription rights in the converted stock company, the plan may provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of: (a) A corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company; or (b) A stock insurance company owned by the mutual company into which the mutual company will be merged; (ii) The subscription rights shall be allocated in whole shares among the eligible members using a fair and equitable formula. This formula may, but need not, take into account how the different classes of policies of the eligible members contributed to the surplus of the mutual company; (D) The plan shall provide a fair and equitable means for the allocation of shares of capital stock in the event of an oversubscription to shares by eligible members exercising subscription rights received pursuant to subdivision (b)(6)(C); (E) The plan shall provide that any shares of capital stock not subscribed to by eligible members exercising subscription rights received under subdivision (b)(6)(C) shall be sold in a public offering through an underwriter. If the shares of capital stock not subscribed by eligible members is so small in number as to not warrant the expense of a public offering, the plan of conversion may provide for the purchase of the unsubscribed shares by a private placement or other alternative method approved by the commissioner that is fair and equitable to the eligible members; (F) The plan shall set the total price of the capital stock equal to the estimated pro forma market value of the converted stock company based upon an independent evaluation by a qualified person. The pro forma market value may be the value that is estimated to be necessary to attract full subscription for the shares as indicated by the independent evaluation; (G) The plan shall set the purchase price of each share of capital stock equal to any reasonable amount that will not inhibit the purchase of shares by members. The purchase price of each share shall be uniform for all purchasers except the price may be modified by the commissioner by reason of the commissioner's consideration of a plan for the purchase of unsubscribed stock pursuant to subdivision (b)(6); and (H) The plan shall provide that any one (1) person or group of persons acting in concert may not acquire, through public offering or subscription rights, more than five percent (5%) of the capital stock of the converted stock company for a period of five (5) years from the effective date of the plan except with the approval of the commissioner. This limitation does not apply to any entity that is to purchase one hundred percent (100%) of the capital stock of the converted company as part of the plan of conversion approved by the commissioner or to a purchase of stock by a tax-qualified employee benefit plan pursuant to subscription grants granted to that plan as authorized under subdivision (b)(6)(C) and to a purchase of unsubscribed stock pursuant to subdivision (b)(6)(E). (7) The following provisions may be included in the plan: (A) (i) The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula; (ii) The total number of shares that may be purchased under subdivision (b)(7)(A)(i) may not exceed thirty-five percent (35%) of the total number of shares to be issued in the case of a mutual company with total assets of less than fifty million dollars ($50,000,000) or twenty-five percent (25%) of the total shares to be issued in the case of a mutual company with total assets of more than five hundred million dollars ($500,000,000). For mutual companies with total assets between fifty million dollars ($50,000,000) and five hundred million dollars ($500,000,000), the total number of shares that may be purchased shall be interpolated; (iii) Stock purchased by a director or officer under subdivision (b)(7)(A)(i) may not be sold within one (1) year following the effective date of the conversion; and (iv) The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for three (3) years after the effective date of the plan, except through a broker or dealer, without the permission of the commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subdivision (b)(7)(A)(i). (B) The plan may allocate to a tax-qualified employee benefit plan nontransferable subscription rights to purchase up to ten percent (10%) of the capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). That employee benefit plan shall be entitled to exercise its subscription rights regardless of the amount of shares purchased by any other person. (8) The board of directors may adopt a plan of conversion that does not rely in whole or in part upon the issuance to members of nontransferable subscription rights to purchase stock of the converted stock company if the commissioner finds that the plan does not prejudice the interests of the members, is fair and equitable, and is based upon an independent appraisal of the market value of the mutual company by a qualified person and a fair and equitable allocation of any consideration to be given eligible members. The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing whether the plan may be approved by the commissioner. (9) A plan shall become effective when the commissioner has approved the plan, the members have approved the plan, and the revised charter has been adopted. (10) (A) All members whose policies are issued after the proposed plan has been adopted by the board of directors and before the effective date of the plan shall be given written notice of the plan of conversion. The notice shall specify the member's right to rescind that policy as provided in subdivision (b)(10)(B) within forty-five (45) days after the effective date of the plan. A copy of the plan or a summary of the plan shall accompany the notice. The form of the notice shall be filed with and approved by the commissioner. (B) Any member entitled to receive the notice described in subdivision (b)(10)(A) shall be entitled to rescind the member's policy and receive a full refund of any amounts paid for the policy or contract within ten (10) days after the receipt of the notice. (11) (A) Upon the conversion of a mutual company to a converted stock company according to this subsection (b), the corporate existence of the mutual company shall be continued in the converted stock company. All the rights, franchises, and interests of the mutual company in and to every type of property, real, personal, and mixed, and things in action thereunto belonging, is deemed transferred to and vested in the converted stock company without any deed or transfer. Simultaneously, the converted stock company is deemed to have assumed all the obligations and liabilities of the mutual company. (B) The directors and officers of the mutual company, unless otherwise specified in the plan of conversion, shall serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are duly elected pursuant to the charter and bylaws of the converted stock company. (12) No director, officer, agent, or employee of the mutual company or any other person shall receive any fee, commission, or other valuable consideration, other than the person's usual regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the commissioner. This provision does not prohibit the payment of reasonable fees and compensation to attorneys, accountants and actuaries for services performed in the independent practice of their professions, even if the attorney, accountant or actuary is also a director of the mutual company. (13) All the costs and expenses connected with a plan of conversion shall be paid for or reimbursed by the mutual company or the converted stock company except where the plan provides either for a holding company to acquire the stock of the converted stock company or for the merger of the mutual company into a stock insurance company as provided in subdivision (b)(6)(C)(i). In those cases, the acquiring holding company or the stock insurance company shall pay for or reimburse all the costs and expenses connected with the plan. (14) If the mutual company complies substantially and in good faith with the notice requirements of this subsection (b), the mutual company's failure to give any member or members any required notice does not impair the validity of any action taken under this subsection (b). (15) Any action challenging the validity of or arising out of acts taken or proposed to be taken under this subsection (b) shall be commenced within thirty (30) days after the effective date of the plan. (c) Any insurance company organized under this chapter may become a state stock insurance company pursuant to subsection (b). Acts 1996, ch. 998, §1; 1997 , ch. 266, § 1; 1999, ch. 108, § 1.
(a) A state malpractice insurance company organized under Tennessee law may become a state stock malpractice insurance company operating under this chapter pursuant to a plan and procedure that is approved in advance by the commissioner. The commissioner shall not approve any such plan or procedure unless: (1) The plan or procedure is equitable to the insurer's policyholders; (2) The plan or procedure is subject to approval by vote of not less than three fourths (3/4) of the votes cast in person, by proxy, or by mail at a meeting of policyholders called for the purpose pursuant to the notice and procedure as may be approved by the commissioner; (3) The equity of each policyholder in the insurer is determinable under a fair formula approved by the commissioner. The equity shall be based upon not less than the insurer's entire surplus, after deducting contributed or borrowed surplus funds and any outstanding guaranty capital securities, plus a reasonable present equity in its reserves and in all nonadmitted assets; (4) The policyholders entitled to receive stock upon conversion and to participate in the purchase of additional stock, if any, include all policyholders having policies in force on the date of conversion; (5) The plan provides that each policyholder of the insurer specified in subdivision (a)(4) shall receive a proportionate part of the capital stock to be issued in respect to the policyholders' equity. The plan also gives to each such policyholder a nontransferable preemptive right to acquire a proportionate part of any additional capital stock to be issued and sold by the insurer, within a designated reasonable period. In addition to the issuance of shares with respect to the policyholders' equity, if the insurer has outstanding guaranty capital securities, the plan shall require the sale of a sufficient number of shares (at the same price per share as all other shares issued under the plan) to retire the guaranty capital securities. To the extent each policyholder specified in subdivision (4) does not exercise the preemptive right to purchase a pro rata number of shares to retire the guaranty capital securities, the holders of the guaranty capital securities shall have the right to convert the securities, including all accrued interest, into shares of capital stock at such price; (6) Shares are so offered to policyholders at a price not greater than that thereafter offered to others nor at more than five (5) times the par value of the shares; and (7) The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a state stock insurer under this chapter; provided, that this provision does not apply to any converting mutual companies that were qualified and authorized under this chapter prior to May 7, 1969.
(1) The plan or procedure is equitable to the insurer's policyholders;
(2) The plan or procedure is subject to approval by vote of not less than three fourths (3/4) of the votes cast in person, by proxy, or by mail at a meeting of policyholders called for the purpose pursuant to the notice and procedure as may be approved by the commissioner;
(3) The equity of each policyholder in the insurer is determinable under a fair formula approved by the commissioner. The equity shall be based upon not less than the insurer's entire surplus, after deducting contributed or borrowed surplus funds and any outstanding guaranty capital securities, plus a reasonable present equity in its reserves and in all nonadmitted assets;
(4) The policyholders entitled to receive stock upon conversion and to participate in the purchase of additional stock, if any, include all policyholders having policies in force on the date of conversion;
(5) The plan provides that each policyholder of the insurer specified in subdivision (a)(4) shall receive a proportionate part of the capital stock to be issued in respect to the policyholders' equity. The plan also gives to each such policyholder a nontransferable preemptive right to acquire a proportionate part of any additional capital stock to be issued and sold by the insurer, within a designated reasonable period. In addition to the issuance of shares with respect to the policyholders' equity, if the insurer has outstanding guaranty capital securities, the plan shall require the sale of a sufficient number of shares (at the same price per share as all other shares issued under the plan) to retire the guaranty capital securities. To the extent each policyholder specified in subdivision (4) does not exercise the preemptive right to purchase a pro rata number of shares to retire the guaranty capital securities, the holders of the guaranty capital securities shall have the right to convert the securities, including all accrued interest, into shares of capital stock at such price;
(6) Shares are so offered to policyholders at a price not greater than that thereafter offered to others nor at more than five (5) times the par value of the shares; and
(7) The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a state stock insurer under this chapter; provided, that this provision does not apply to any converting mutual companies that were qualified and authorized under this chapter prior to May 7, 1969.
(b) (1) As used in this section, unless the context otherwise requires: (A) "Commissioner" is the commissioner of commerce and insurance; (B) "Converted stock company" is a Tennessee domiciled stock company that converted from a Tennessee domiciled mutual company under this section; (C) "Eligible member" is a member whose policy is in force as of the date the mutual company's board of directors adopts a plan of conversion. A person whose policy is issued after the board of directors adopts the plan but before the plan's effective date is not an eligible member but shall have those rights set forth in subdivision (b)(10); and (D) "Plan of conversion" or "plan" is a plan adopted by a Tennessee domestic mutual company's board of directors under this section to convert the mutual company into a Tennessee domiciled stock company. (2) (A) A mutual company seeking to convert to a stock company shall, by the affirmative vote of not less than two thirds (2/3) of its board of directors, adopt a plan of conversion consistent with the requirements of subdivision (b)(6). (B) At any time before approval of a plan by the commissioner, the mutual company by the affirmative vote of two thirds (2/3) of its board of directors, may amend or withdraw the plan. (3) (A) After adoption by the mutual company's board of directors, the plan shall be submitted to the commissioner for review and approval. The commissioner shall approve the plan upon finding that: (i) This subsection (b) has been complied with; (ii) The plan will not prejudice the interests of the members; and (iii) The plan's method of allocating subscription rights is fair and equitable. (B) (i) (a) Prior to the members' approval of the plan, a mutual company seeking the commissioner's approval of a plan shall file the following documents with the commissioner for review and approval: (1) The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F); (2) The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan; (3) Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii); (4) The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and (5) The proposed charter and bylaws of the converted stock company. (b) Once filed, these documents shall be approved or disapproved by the commissioner within a reasonable time. (ii) After the members have approved the plan, the converted stock company shall file the following documents with the commissioner: (a) The minutes of the meeting of the members at which the plan was voted upon; and (b) The revised charter and bylaws of the converted stock company. (C) The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing the plan and the independent evaluation of the pro forma market value that is required by subdivision (b)(6)(F). (4) (A) All eligible members shall be given notice of and an opportunity to vote upon the plan. (B) All eligible members shall be given notice of the members' meeting to vote upon the plan. A copy of the plan or a summary of the plan shall accompany the notice. The notice shall be mailed to each member's last known address, as shown on the mutual company's records, within forty-five (45) days of the commissioner's approval of the plan. The meeting to vote upon the plan shall not be set for a date less than sixty (60) days after the date when the notice of the meeting is mailed by the mutual company. If the meeting to vote upon the plan is held coincident with the mutual company's annual meeting of policyholders, only one (1) combined notice of meeting is required. (C) (i) After approval by the commissioner, the plan shall be adopted upon receiving the affirmative vote of at least two thirds (2/3) of the votes cast by eligible members. (ii) Members entitled to vote upon the proposed plan may vote in person or by proxy. Any proxies to be solicited from eligible members shall be filed with and approved by the commissioner. (iii) The number of votes each eligible member may cast shall be determined by the mutual company's bylaws. If the bylaws are silent, each eligible member may cast one (1) vote. (5) Adoption of the revised charter of the converted stock company is necessary to implement the plan and shall be governed by the applicable provisions of the general corporation law. The revised charter may be adopted solely by the board of directors. (6) The following provisions shall be included in the plan: (A) The plan shall set forth the reasons for the proposed conversion; (B) (i) The plan shall provide that all policies in force on the effective date of conversion shall continue to remain in force under the terms of those policies, except that any voting rights of the policyholders provided for under the policies or under this code, and any contingent liability policy provisions of the type described in § 56-19-116 shall be extinguished on the effective date of the conversion; (ii) The plan shall further provide that holders of participating policies in effect on the date of conversion shall continue to have the right to receive dividends as provided in the participating policies, if any; (iii) The converted stock company may issue the insured a nonparticipating policy as a substitute for a participating policy upon the renewal date of a participating policy; (C) (i) The plan shall provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company. As an alternative to subscription rights in the converted stock company, the plan may provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of: (a) A corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company; or (b) A stock insurance company owned by the mutual company into which the mutual company will be merged; (ii) The subscription rights shall be allocated in whole shares among the eligible members using a fair and equitable formula. This formula may, but need not, take into account how the different classes of policies of the eligible members contributed to the surplus of the mutual company; (D) The plan shall provide a fair and equitable means for the allocation of shares of capital stock in the event of an oversubscription to shares by eligible members exercising subscription rights received pursuant to subdivision (b)(6)(C); (E) The plan shall provide that any shares of capital stock not subscribed to by eligible members exercising subscription rights received under subdivision (b)(6)(C) shall be sold in a public offering through an underwriter. If the shares of capital stock not subscribed by eligible members is so small in number as to not warrant the expense of a public offering, the plan of conversion may provide for the purchase of the unsubscribed shares by a private placement or other alternative method approved by the commissioner that is fair and equitable to the eligible members; (F) The plan shall set the total price of the capital stock equal to the estimated pro forma market value of the converted stock company based upon an independent evaluation by a qualified person. The pro forma market value may be the value that is estimated to be necessary to attract full subscription for the shares as indicated by the independent evaluation; (G) The plan shall set the purchase price of each share of capital stock equal to any reasonable amount that will not inhibit the purchase of shares by members. The purchase price of each share shall be uniform for all purchasers except the price may be modified by the commissioner by reason of the commissioner's consideration of a plan for the purchase of unsubscribed stock pursuant to subdivision (b)(6); and (H) The plan shall provide that any one (1) person or group of persons acting in concert may not acquire, through public offering or subscription rights, more than five percent (5%) of the capital stock of the converted stock company for a period of five (5) years from the effective date of the plan except with the approval of the commissioner. This limitation does not apply to any entity that is to purchase one hundred percent (100%) of the capital stock of the converted company as part of the plan of conversion approved by the commissioner or to a purchase of stock by a tax-qualified employee benefit plan pursuant to subscription grants granted to that plan as authorized under subdivision (b)(6)(C) and to a purchase of unsubscribed stock pursuant to subdivision (b)(6)(E). (7) The following provisions may be included in the plan: (A) (i) The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula; (ii) The total number of shares that may be purchased under subdivision (b)(7)(A)(i) may not exceed thirty-five percent (35%) of the total number of shares to be issued in the case of a mutual company with total assets of less than fifty million dollars ($50,000,000) or twenty-five percent (25%) of the total shares to be issued in the case of a mutual company with total assets of more than five hundred million dollars ($500,000,000). For mutual companies with total assets between fifty million dollars ($50,000,000) and five hundred million dollars ($500,000,000), the total number of shares that may be purchased shall be interpolated; (iii) Stock purchased by a director or officer under subdivision (b)(7)(A)(i) may not be sold within one (1) year following the effective date of the conversion; and (iv) The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for three (3) years after the effective date of the plan, except through a broker or dealer, without the permission of the commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subdivision (b)(7)(A)(i). (B) The plan may allocate to a tax-qualified employee benefit plan nontransferable subscription rights to purchase up to ten percent (10%) of the capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). That employee benefit plan shall be entitled to exercise its subscription rights regardless of the amount of shares purchased by any other person. (8) The board of directors may adopt a plan of conversion that does not rely in whole or in part upon the issuance to members of nontransferable subscription rights to purchase stock of the converted stock company if the commissioner finds that the plan does not prejudice the interests of the members, is fair and equitable, and is based upon an independent appraisal of the market value of the mutual company by a qualified person and a fair and equitable allocation of any consideration to be given eligible members. The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing whether the plan may be approved by the commissioner. (9) A plan shall become effective when the commissioner has approved the plan, the members have approved the plan, and the revised charter has been adopted. (10) (A) All members whose policies are issued after the proposed plan has been adopted by the board of directors and before the effective date of the plan shall be given written notice of the plan of conversion. The notice shall specify the member's right to rescind that policy as provided in subdivision (b)(10)(B) within forty-five (45) days after the effective date of the plan. A copy of the plan or a summary of the plan shall accompany the notice. The form of the notice shall be filed with and approved by the commissioner. (B) Any member entitled to receive the notice described in subdivision (b)(10)(A) shall be entitled to rescind the member's policy and receive a full refund of any amounts paid for the policy or contract within ten (10) days after the receipt of the notice. (11) (A) Upon the conversion of a mutual company to a converted stock company according to this subsection (b), the corporate existence of the mutual company shall be continued in the converted stock company. All the rights, franchises, and interests of the mutual company in and to every type of property, real, personal, and mixed, and things in action thereunto belonging, is deemed transferred to and vested in the converted stock company without any deed or transfer. Simultaneously, the converted stock company is deemed to have assumed all the obligations and liabilities of the mutual company. (B) The directors and officers of the mutual company, unless otherwise specified in the plan of conversion, shall serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are duly elected pursuant to the charter and bylaws of the converted stock company. (12) No director, officer, agent, or employee of the mutual company or any other person shall receive any fee, commission, or other valuable consideration, other than the person's usual regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the commissioner. This provision does not prohibit the payment of reasonable fees and compensation to attorneys, accountants and actuaries for services performed in the independent practice of their professions, even if the attorney, accountant or actuary is also a director of the mutual company. (13) All the costs and expenses connected with a plan of conversion shall be paid for or reimbursed by the mutual company or the converted stock company except where the plan provides either for a holding company to acquire the stock of the converted stock company or for the merger of the mutual company into a stock insurance company as provided in subdivision (b)(6)(C)(i). In those cases, the acquiring holding company or the stock insurance company shall pay for or reimburse all the costs and expenses connected with the plan. (14) If the mutual company complies substantially and in good faith with the notice requirements of this subsection (b), the mutual company's failure to give any member or members any required notice does not impair the validity of any action taken under this subsection (b). (15) Any action challenging the validity of or arising out of acts taken or proposed to be taken under this subsection (b) shall be commenced within thirty (30) days after the effective date of the plan.
(1) As used in this section, unless the context otherwise requires: (A) "Commissioner" is the commissioner of commerce and insurance; (B) "Converted stock company" is a Tennessee domiciled stock company that converted from a Tennessee domiciled mutual company under this section; (C) "Eligible member" is a member whose policy is in force as of the date the mutual company's board of directors adopts a plan of conversion. A person whose policy is issued after the board of directors adopts the plan but before the plan's effective date is not an eligible member but shall have those rights set forth in subdivision (b)(10); and (D) "Plan of conversion" or "plan" is a plan adopted by a Tennessee domestic mutual company's board of directors under this section to convert the mutual company into a Tennessee domiciled stock company.
(A) "Commissioner" is the commissioner of commerce and insurance;
(B) "Converted stock company" is a Tennessee domiciled stock company that converted from a Tennessee domiciled mutual company under this section;
(C) "Eligible member" is a member whose policy is in force as of the date the mutual company's board of directors adopts a plan of conversion. A person whose policy is issued after the board of directors adopts the plan but before the plan's effective date is not an eligible member but shall have those rights set forth in subdivision (b)(10); and
(D) "Plan of conversion" or "plan" is a plan adopted by a Tennessee domestic mutual company's board of directors under this section to convert the mutual company into a Tennessee domiciled stock company.
(2) (A) A mutual company seeking to convert to a stock company shall, by the affirmative vote of not less than two thirds (2/3) of its board of directors, adopt a plan of conversion consistent with the requirements of subdivision (b)(6). (B) At any time before approval of a plan by the commissioner, the mutual company by the affirmative vote of two thirds (2/3) of its board of directors, may amend or withdraw the plan.
(A) A mutual company seeking to convert to a stock company shall, by the affirmative vote of not less than two thirds (2/3) of its board of directors, adopt a plan of conversion consistent with the requirements of subdivision (b)(6).
(B) At any time before approval of a plan by the commissioner, the mutual company by the affirmative vote of two thirds (2/3) of its board of directors, may amend or withdraw the plan.
(3) (A) After adoption by the mutual company's board of directors, the plan shall be submitted to the commissioner for review and approval. The commissioner shall approve the plan upon finding that: (i) This subsection (b) has been complied with; (ii) The plan will not prejudice the interests of the members; and (iii) The plan's method of allocating subscription rights is fair and equitable. (B) (i) (a) Prior to the members' approval of the plan, a mutual company seeking the commissioner's approval of a plan shall file the following documents with the commissioner for review and approval: (1) The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F); (2) The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan; (3) Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii); (4) The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and (5) The proposed charter and bylaws of the converted stock company. (b) Once filed, these documents shall be approved or disapproved by the commissioner within a reasonable time. (ii) After the members have approved the plan, the converted stock company shall file the following documents with the commissioner: (a) The minutes of the meeting of the members at which the plan was voted upon; and (b) The revised charter and bylaws of the converted stock company. (C) The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing the plan and the independent evaluation of the pro forma market value that is required by subdivision (b)(6)(F).
(A) After adoption by the mutual company's board of directors, the plan shall be submitted to the commissioner for review and approval. The commissioner shall approve the plan upon finding that: (i) This subsection (b) has been complied with; (ii) The plan will not prejudice the interests of the members; and (iii) The plan's method of allocating subscription rights is fair and equitable.
(i) This subsection (b) has been complied with;
(ii) The plan will not prejudice the interests of the members; and
(iii) The plan's method of allocating subscription rights is fair and equitable.
(B) (i) (a) Prior to the members' approval of the plan, a mutual company seeking the commissioner's approval of a plan shall file the following documents with the commissioner for review and approval: (1) The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F); (2) The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan; (3) Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii); (4) The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and (5) The proposed charter and bylaws of the converted stock company. (b) Once filed, these documents shall be approved or disapproved by the commissioner within a reasonable time. (ii) After the members have approved the plan, the converted stock company shall file the following documents with the commissioner: (a) The minutes of the meeting of the members at which the plan was voted upon; and (b) The revised charter and bylaws of the converted stock company.
(i) (a) Prior to the members' approval of the plan, a mutual company seeking the commissioner's approval of a plan shall file the following documents with the commissioner for review and approval: (1) The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F); (2) The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan; (3) Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii); (4) The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and (5) The proposed charter and bylaws of the converted stock company. (b) Once filed, these documents shall be approved or disapproved by the commissioner within a reasonable time.
(a) Prior to the members' approval of the plan, a mutual company seeking the commissioner's approval of a plan shall file the following documents with the commissioner for review and approval: (1) The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F); (2) The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan; (3) Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii); (4) The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and (5) The proposed charter and bylaws of the converted stock company.
(1) The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F);
(2) The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan;
(3) Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii);
(4) The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and
(5) The proposed charter and bylaws of the converted stock company.
(b) Once filed, these documents shall be approved or disapproved by the commissioner within a reasonable time.
(ii) After the members have approved the plan, the converted stock company shall file the following documents with the commissioner: (a) The minutes of the meeting of the members at which the plan was voted upon; and (b) The revised charter and bylaws of the converted stock company.
(a) The minutes of the meeting of the members at which the plan was voted upon; and
(b) The revised charter and bylaws of the converted stock company.
(C) The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing the plan and the independent evaluation of the pro forma market value that is required by subdivision (b)(6)(F).
(4) (A) All eligible members shall be given notice of and an opportunity to vote upon the plan. (B) All eligible members shall be given notice of the members' meeting to vote upon the plan. A copy of the plan or a summary of the plan shall accompany the notice. The notice shall be mailed to each member's last known address, as shown on the mutual company's records, within forty-five (45) days of the commissioner's approval of the plan. The meeting to vote upon the plan shall not be set for a date less than sixty (60) days after the date when the notice of the meeting is mailed by the mutual company. If the meeting to vote upon the plan is held coincident with the mutual company's annual meeting of policyholders, only one (1) combined notice of meeting is required. (C) (i) After approval by the commissioner, the plan shall be adopted upon receiving the affirmative vote of at least two thirds (2/3) of the votes cast by eligible members. (ii) Members entitled to vote upon the proposed plan may vote in person or by proxy. Any proxies to be solicited from eligible members shall be filed with and approved by the commissioner. (iii) The number of votes each eligible member may cast shall be determined by the mutual company's bylaws. If the bylaws are silent, each eligible member may cast one (1) vote.
(A) All eligible members shall be given notice of and an opportunity to vote upon the plan.
(B) All eligible members shall be given notice of the members' meeting to vote upon the plan. A copy of the plan or a summary of the plan shall accompany the notice. The notice shall be mailed to each member's last known address, as shown on the mutual company's records, within forty-five (45) days of the commissioner's approval of the plan. The meeting to vote upon the plan shall not be set for a date less than sixty (60) days after the date when the notice of the meeting is mailed by the mutual company. If the meeting to vote upon the plan is held coincident with the mutual company's annual meeting of policyholders, only one (1) combined notice of meeting is required.
(C) (i) After approval by the commissioner, the plan shall be adopted upon receiving the affirmative vote of at least two thirds (2/3) of the votes cast by eligible members. (ii) Members entitled to vote upon the proposed plan may vote in person or by proxy. Any proxies to be solicited from eligible members shall be filed with and approved by the commissioner. (iii) The number of votes each eligible member may cast shall be determined by the mutual company's bylaws. If the bylaws are silent, each eligible member may cast one (1) vote.
(i) After approval by the commissioner, the plan shall be adopted upon receiving the affirmative vote of at least two thirds (2/3) of the votes cast by eligible members.
(ii) Members entitled to vote upon the proposed plan may vote in person or by proxy. Any proxies to be solicited from eligible members shall be filed with and approved by the commissioner.
(iii) The number of votes each eligible member may cast shall be determined by the mutual company's bylaws. If the bylaws are silent, each eligible member may cast one (1) vote.
(5) Adoption of the revised charter of the converted stock company is necessary to implement the plan and shall be governed by the applicable provisions of the general corporation law. The revised charter may be adopted solely by the board of directors.
(6) The following provisions shall be included in the plan: (A) The plan shall set forth the reasons for the proposed conversion; (B) (i) The plan shall provide that all policies in force on the effective date of conversion shall continue to remain in force under the terms of those policies, except that any voting rights of the policyholders provided for under the policies or under this code, and any contingent liability policy provisions of the type described in § 56-19-116 shall be extinguished on the effective date of the conversion; (ii) The plan shall further provide that holders of participating policies in effect on the date of conversion shall continue to have the right to receive dividends as provided in the participating policies, if any; (iii) The converted stock company may issue the insured a nonparticipating policy as a substitute for a participating policy upon the renewal date of a participating policy; (C) (i) The plan shall provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company. As an alternative to subscription rights in the converted stock company, the plan may provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of: (a) A corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company; or (b) A stock insurance company owned by the mutual company into which the mutual company will be merged; (ii) The subscription rights shall be allocated in whole shares among the eligible members using a fair and equitable formula. This formula may, but need not, take into account how the different classes of policies of the eligible members contributed to the surplus of the mutual company; (D) The plan shall provide a fair and equitable means for the allocation of shares of capital stock in the event of an oversubscription to shares by eligible members exercising subscription rights received pursuant to subdivision (b)(6)(C); (E) The plan shall provide that any shares of capital stock not subscribed to by eligible members exercising subscription rights received under subdivision (b)(6)(C) shall be sold in a public offering through an underwriter. If the shares of capital stock not subscribed by eligible members is so small in number as to not warrant the expense of a public offering, the plan of conversion may provide for the purchase of the unsubscribed shares by a private placement or other alternative method approved by the commissioner that is fair and equitable to the eligible members; (F) The plan shall set the total price of the capital stock equal to the estimated pro forma market value of the converted stock company based upon an independent evaluation by a qualified person. The pro forma market value may be the value that is estimated to be necessary to attract full subscription for the shares as indicated by the independent evaluation; (G) The plan shall set the purchase price of each share of capital stock equal to any reasonable amount that will not inhibit the purchase of shares by members. The purchase price of each share shall be uniform for all purchasers except the price may be modified by the commissioner by reason of the commissioner's consideration of a plan for the purchase of unsubscribed stock pursuant to subdivision (b)(6); and (H) The plan shall provide that any one (1) person or group of persons acting in concert may not acquire, through public offering or subscription rights, more than five percent (5%) of the capital stock of the converted stock company for a period of five (5) years from the effective date of the plan except with the approval of the commissioner. This limitation does not apply to any entity that is to purchase one hundred percent (100%) of the capital stock of the converted company as part of the plan of conversion approved by the commissioner or to a purchase of stock by a tax-qualified employee benefit plan pursuant to subscription grants granted to that plan as authorized under subdivision (b)(6)(C) and to a purchase of unsubscribed stock pursuant to subdivision (b)(6)(E).
(A) The plan shall set forth the reasons for the proposed conversion;
(B) (i) The plan shall provide that all policies in force on the effective date of conversion shall continue to remain in force under the terms of those policies, except that any voting rights of the policyholders provided for under the policies or under this code, and any contingent liability policy provisions of the type described in § 56-19-116 shall be extinguished on the effective date of the conversion; (ii) The plan shall further provide that holders of participating policies in effect on the date of conversion shall continue to have the right to receive dividends as provided in the participating policies, if any; (iii) The converted stock company may issue the insured a nonparticipating policy as a substitute for a participating policy upon the renewal date of a participating policy;
(i) The plan shall provide that all policies in force on the effective date of conversion shall continue to remain in force under the terms of those policies, except that any voting rights of the policyholders provided for under the policies or under this code, and any contingent liability policy provisions of the type described in § 56-19-116 shall be extinguished on the effective date of the conversion;
(ii) The plan shall further provide that holders of participating policies in effect on the date of conversion shall continue to have the right to receive dividends as provided in the participating policies, if any;
(iii) The converted stock company may issue the insured a nonparticipating policy as a substitute for a participating policy upon the renewal date of a participating policy;
(C) (i) The plan shall provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company. As an alternative to subscription rights in the converted stock company, the plan may provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of: (a) A corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company; or (b) A stock insurance company owned by the mutual company into which the mutual company will be merged; (ii) The subscription rights shall be allocated in whole shares among the eligible members using a fair and equitable formula. This formula may, but need not, take into account how the different classes of policies of the eligible members contributed to the surplus of the mutual company;
(i) The plan shall provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company. As an alternative to subscription rights in the converted stock company, the plan may provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of: (a) A corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company; or (b) A stock insurance company owned by the mutual company into which the mutual company will be merged;
(a) A corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company; or
(b) A stock insurance company owned by the mutual company into which the mutual company will be merged;
(ii) The subscription rights shall be allocated in whole shares among the eligible members using a fair and equitable formula. This formula may, but need not, take into account how the different classes of policies of the eligible members contributed to the surplus of the mutual company;
(D) The plan shall provide a fair and equitable means for the allocation of shares of capital stock in the event of an oversubscription to shares by eligible members exercising subscription rights received pursuant to subdivision (b)(6)(C);
(E) The plan shall provide that any shares of capital stock not subscribed to by eligible members exercising subscription rights received under subdivision (b)(6)(C) shall be sold in a public offering through an underwriter. If the shares of capital stock not subscribed by eligible members is so small in number as to not warrant the expense of a public offering, the plan of conversion may provide for the purchase of the unsubscribed shares by a private placement or other alternative method approved by the commissioner that is fair and equitable to the eligible members;
(F) The plan shall set the total price of the capital stock equal to the estimated pro forma market value of the converted stock company based upon an independent evaluation by a qualified person. The pro forma market value may be the value that is estimated to be necessary to attract full subscription for the shares as indicated by the independent evaluation;
(G) The plan shall set the purchase price of each share of capital stock equal to any reasonable amount that will not inhibit the purchase of shares by members. The purchase price of each share shall be uniform for all purchasers except the price may be modified by the commissioner by reason of the commissioner's consideration of a plan for the purchase of unsubscribed stock pursuant to subdivision (b)(6); and
(H) The plan shall provide that any one (1) person or group of persons acting in concert may not acquire, through public offering or subscription rights, more than five percent (5%) of the capital stock of the converted stock company for a period of five (5) years from the effective date of the plan except with the approval of the commissioner. This limitation does not apply to any entity that is to purchase one hundred percent (100%) of the capital stock of the converted company as part of the plan of conversion approved by the commissioner or to a purchase of stock by a tax-qualified employee benefit plan pursuant to subscription grants granted to that plan as authorized under subdivision (b)(6)(C) and to a purchase of unsubscribed stock pursuant to subdivision (b)(6)(E).
(7) The following provisions may be included in the plan: (A) (i) The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula; (ii) The total number of shares that may be purchased under subdivision (b)(7)(A)(i) may not exceed thirty-five percent (35%) of the total number of shares to be issued in the case of a mutual company with total assets of less than fifty million dollars ($50,000,000) or twenty-five percent (25%) of the total shares to be issued in the case of a mutual company with total assets of more than five hundred million dollars ($500,000,000). For mutual companies with total assets between fifty million dollars ($50,000,000) and five hundred million dollars ($500,000,000), the total number of shares that may be purchased shall be interpolated; (iii) Stock purchased by a director or officer under subdivision (b)(7)(A)(i) may not be sold within one (1) year following the effective date of the conversion; and (iv) The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for three (3) years after the effective date of the plan, except through a broker or dealer, without the permission of the commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subdivision (b)(7)(A)(i). (B) The plan may allocate to a tax-qualified employee benefit plan nontransferable subscription rights to purchase up to ten percent (10%) of the capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). That employee benefit plan shall be entitled to exercise its subscription rights regardless of the amount of shares purchased by any other person.
(A) (i) The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula; (ii) The total number of shares that may be purchased under subdivision (b)(7)(A)(i) may not exceed thirty-five percent (35%) of the total number of shares to be issued in the case of a mutual company with total assets of less than fifty million dollars ($50,000,000) or twenty-five percent (25%) of the total shares to be issued in the case of a mutual company with total assets of more than five hundred million dollars ($500,000,000). For mutual companies with total assets between fifty million dollars ($50,000,000) and five hundred million dollars ($500,000,000), the total number of shares that may be purchased shall be interpolated; (iii) Stock purchased by a director or officer under subdivision (b)(7)(A)(i) may not be sold within one (1) year following the effective date of the conversion; and (iv) The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for three (3) years after the effective date of the plan, except through a broker or dealer, without the permission of the commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subdivision (b)(7)(A)(i).
(i) The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula;
(ii) The total number of shares that may be purchased under subdivision (b)(7)(A)(i) may not exceed thirty-five percent (35%) of the total number of shares to be issued in the case of a mutual company with total assets of less than fifty million dollars ($50,000,000) or twenty-five percent (25%) of the total shares to be issued in the case of a mutual company with total assets of more than five hundred million dollars ($500,000,000). For mutual companies with total assets between fifty million dollars ($50,000,000) and five hundred million dollars ($500,000,000), the total number of shares that may be purchased shall be interpolated;
(iii) Stock purchased by a director or officer under subdivision (b)(7)(A)(i) may not be sold within one (1) year following the effective date of the conversion; and
(iv) The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for three (3) years after the effective date of the plan, except through a broker or dealer, without the permission of the commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subdivision (b)(7)(A)(i).
(B) The plan may allocate to a tax-qualified employee benefit plan nontransferable subscription rights to purchase up to ten percent (10%) of the capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). That employee benefit plan shall be entitled to exercise its subscription rights regardless of the amount of shares purchased by any other person.
(8) The board of directors may adopt a plan of conversion that does not rely in whole or in part upon the issuance to members of nontransferable subscription rights to purchase stock of the converted stock company if the commissioner finds that the plan does not prejudice the interests of the members, is fair and equitable, and is based upon an independent appraisal of the market value of the mutual company by a qualified person and a fair and equitable allocation of any consideration to be given eligible members. The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing whether the plan may be approved by the commissioner.
(9) A plan shall become effective when the commissioner has approved the plan, the members have approved the plan, and the revised charter has been adopted.
(10) (A) All members whose policies are issued after the proposed plan has been adopted by the board of directors and before the effective date of the plan shall be given written notice of the plan of conversion. The notice shall specify the member's right to rescind that policy as provided in subdivision (b)(10)(B) within forty-five (45) days after the effective date of the plan. A copy of the plan or a summary of the plan shall accompany the notice. The form of the notice shall be filed with and approved by the commissioner. (B) Any member entitled to receive the notice described in subdivision (b)(10)(A) shall be entitled to rescind the member's policy and receive a full refund of any amounts paid for the policy or contract within ten (10) days after the receipt of the notice.
(A) All members whose policies are issued after the proposed plan has been adopted by the board of directors and before the effective date of the plan shall be given written notice of the plan of conversion. The notice shall specify the member's right to rescind that policy as provided in subdivision (b)(10)(B) within forty-five (45) days after the effective date of the plan. A copy of the plan or a summary of the plan shall accompany the notice. The form of the notice shall be filed with and approved by the commissioner.
(B) Any member entitled to receive the notice described in subdivision (b)(10)(A) shall be entitled to rescind the member's policy and receive a full refund of any amounts paid for the policy or contract within ten (10) days after the receipt of the notice.
(11) (A) Upon the conversion of a mutual company to a converted stock company according to this subsection (b), the corporate existence of the mutual company shall be continued in the converted stock company. All the rights, franchises, and interests of the mutual company in and to every type of property, real, personal, and mixed, and things in action thereunto belonging, is deemed transferred to and vested in the converted stock company without any deed or transfer. Simultaneously, the converted stock company is deemed to have assumed all the obligations and liabilities of the mutual company. (B) The directors and officers of the mutual company, unless otherwise specified in the plan of conversion, shall serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are duly elected pursuant to the charter and bylaws of the converted stock company.
(A) Upon the conversion of a mutual company to a converted stock company according to this subsection (b), the corporate existence of the mutual company shall be continued in the converted stock company. All the rights, franchises, and interests of the mutual company in and to every type of property, real, personal, and mixed, and things in action thereunto belonging, is deemed transferred to and vested in the converted stock company without any deed or transfer. Simultaneously, the converted stock company is deemed to have assumed all the obligations and liabilities of the mutual company.
(B) The directors and officers of the mutual company, unless otherwise specified in the plan of conversion, shall serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are duly elected pursuant to the charter and bylaws of the converted stock company.
(12) No director, officer, agent, or employee of the mutual company or any other person shall receive any fee, commission, or other valuable consideration, other than the person's usual regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the commissioner. This provision does not prohibit the payment of reasonable fees and compensation to attorneys, accountants and actuaries for services performed in the independent practice of their professions, even if the attorney, accountant or actuary is also a director of the mutual company.
(13) All the costs and expenses connected with a plan of conversion shall be paid for or reimbursed by the mutual company or the converted stock company except where the plan provides either for a holding company to acquire the stock of the converted stock company or for the merger of the mutual company into a stock insurance company as provided in subdivision (b)(6)(C)(i). In those cases, the acquiring holding company or the stock insurance company shall pay for or reimburse all the costs and expenses connected with the plan.
(14) If the mutual company complies substantially and in good faith with the notice requirements of this subsection (b), the mutual company's failure to give any member or members any required notice does not impair the validity of any action taken under this subsection (b).
(15) Any action challenging the validity of or arising out of acts taken or proposed to be taken under this subsection (b) shall be commenced within thirty (30) days after the effective date of the plan.
(c) Any insurance company organized under this chapter may become a state stock insurance company pursuant to subsection (b).
Acts 1996, ch. 998, §1; 1997 , ch. 266, § 1; 1999, ch. 108, § 1.
Tenn. Code Ann. § 56-21-124 — TN Code / Title 56 / Chapter 21 / Section 56-21-124
Reinsurance of fire risks with or for other companies
Status: in_force

Any state mutual fire insurance company organized under the laws of this state is empowered to contract by policy or other agreement with any insurance company authorized to do business in this state for reinsurance by the insurance company of the whole or any part of any risk it has outstanding by reason of the issuance of its policy of insurance. The state mutual fire insurance company is further empowered to reinsure for any state or county mutual fire insurance company organized under the laws of this state the whole or any part of any risk that the other company may be carrying and that such other company may desire to reinsure, in whole or in part. Acts 1925, ch. 85, § 1; Shan. Supp., § 3369a29b2; Code 1932, § 6280; T.C.A. (orig. ed.), § 56-2026.
Any state mutual fire insurance company organized under the laws of this state is empowered to contract by policy or other agreement with any insurance company authorized to do business in this state for reinsurance by the insurance company of the whole or any part of any risk it has outstanding by reason of the issuance of its policy of insurance. The state mutual fire insurance company is further empowered to reinsure for any state or county mutual fire insurance company organized under the laws of this state the whole or any part of any risk that the other company may be carrying and that such other company may desire to reinsure, in whole or in part.
Acts 1925, ch. 85, § 1; Shan. Supp., § 3369a29b2; Code 1932, § 6280; T.C.A. (orig. ed.), § 56-2026.
Tenn. Code Ann. § 56-3-305 — TN Code / Title 56 / Chapter 3 / Section 56-3-305
Domestic life insurance companies may acquire, hold and convey real estate - Purposes - Manner
Status: in_force

(a) A domestic life insurance company may acquire, hold and convey real property only for the following purposes and in the following manner: (1) The land and the building on the land in which it has its principal office and other real property that is requisite for its convenient accommodations in the transaction of its insurance business, the amount not to exceed ten percent (10%) of its admitted assets, subject, however, to the limitations of subsection (b); (2) Real property that has been mortgaged to it in good faith by way of security for loans previously contracted or for moneys due; (3) Real property that has been conveyed to it in satisfaction of debts previously contracted in the course of its dealings; (4) Real property that has been purchased at sales on judgments, decrees, or mortgages obtained or made for those debts; (5) Real property that has been acquired for investment purposes; provided, that: (A) No real property may be acquired or held under the authority of this subdivision (a)(5) unless at the time of acquisition it is already improved and income producing or unless it is improved with due diligence after acquisition so as to produce an income; (B) No company shall at any one (1) time have more than two percent (2%) of its admitted assets invested in a single piece or adjoining pieces of real property acquired or held under the authority of this subdivision (a)(5); and (C) No investments under the authority of this subdivision (a)(5) shall be made in hotels, club houses, garages, schools, factories erected and designed for special purposes or agricultural properties, without specific approval in advance by the commissioner. (b) In no event shall the aggregate of all of a company's holdings and investments, under the authority of subdivisions (a)(1)-(5), exceed ten percent (10%) of the company's admitted assets; provided, that nothing in this subsection (b) shall prevent the acquisition by the company of any property under subdivisions (a)(2)-(4), but properties so acquired shall be held under § 56-3-306 . Acts 1907, ch. 458, § 3; Shan., § 3348a30; Code 1932, § 6205; Acts 1947, ch. 110, § 1; C. Supp. 1950, § 6205; T.C.A. (orig. ed.), § 56-218; impl. am. Acts 1971, ch. 137, § 2; T.C.A. (orig. ed.), § 56-307; Acts 1998, ch. 678, § 3.
(a) A domestic life insurance company may acquire, hold and convey real property only for the following purposes and in the following manner: (1) The land and the building on the land in which it has its principal office and other real property that is requisite for its convenient accommodations in the transaction of its insurance business, the amount not to exceed ten percent (10%) of its admitted assets, subject, however, to the limitations of subsection (b); (2) Real property that has been mortgaged to it in good faith by way of security for loans previously contracted or for moneys due; (3) Real property that has been conveyed to it in satisfaction of debts previously contracted in the course of its dealings; (4) Real property that has been purchased at sales on judgments, decrees, or mortgages obtained or made for those debts; (5) Real property that has been acquired for investment purposes; provided, that: (A) No real property may be acquired or held under the authority of this subdivision (a)(5) unless at the time of acquisition it is already improved and income producing or unless it is improved with due diligence after acquisition so as to produce an income; (B) No company shall at any one (1) time have more than two percent (2%) of its admitted assets invested in a single piece or adjoining pieces of real property acquired or held under the authority of this subdivision (a)(5); and (C) No investments under the authority of this subdivision (a)(5) shall be made in hotels, club houses, garages, schools, factories erected and designed for special purposes or agricultural properties, without specific approval in advance by the commissioner.
(1) The land and the building on the land in which it has its principal office and other real property that is requisite for its convenient accommodations in the transaction of its insurance business, the amount not to exceed ten percent (10%) of its admitted assets, subject, however, to the limitations of subsection (b);
(2) Real property that has been mortgaged to it in good faith by way of security for loans previously contracted or for moneys due;
(3) Real property that has been conveyed to it in satisfaction of debts previously contracted in the course of its dealings;
(4) Real property that has been purchased at sales on judgments, decrees, or mortgages obtained or made for those debts;
(5) Real property that has been acquired for investment purposes; provided, that: (A) No real property may be acquired or held under the authority of this subdivision (a)(5) unless at the time of acquisition it is already improved and income producing or unless it is improved with due diligence after acquisition so as to produce an income; (B) No company shall at any one (1) time have more than two percent (2%) of its admitted assets invested in a single piece or adjoining pieces of real property acquired or held under the authority of this subdivision (a)(5); and (C) No investments under the authority of this subdivision (a)(5) shall be made in hotels, club houses, garages, schools, factories erected and designed for special purposes or agricultural properties, without specific approval in advance by the commissioner.
(A) No real property may be acquired or held under the authority of this subdivision (a)(5) unless at the time of acquisition it is already improved and income producing or unless it is improved with due diligence after acquisition so as to produce an income;
(B) No company shall at any one (1) time have more than two percent (2%) of its admitted assets invested in a single piece or adjoining pieces of real property acquired or held under the authority of this subdivision (a)(5); and
(C) No investments under the authority of this subdivision (a)(5) shall be made in hotels, club houses, garages, schools, factories erected and designed for special purposes or agricultural properties, without specific approval in advance by the commissioner.
(b) In no event shall the aggregate of all of a company's holdings and investments, under the authority of subdivisions (a)(1)-(5), exceed ten percent (10%) of the company's admitted assets; provided, that nothing in this subsection (b) shall prevent the acquisition by the company of any property under subdivisions (a)(2)-(4), but properties so acquired shall be held under § 56-3-306 .
Acts 1907, ch. 458, § 3; Shan., § 3348a30; Code 1932, § 6205; Acts 1947, ch. 110, § 1; C. Supp. 1950, § 6205; T.C.A. (orig. ed.), § 56-218; impl. am. Acts 1971, ch. 137, § 2; T.C.A. (orig. ed.), § 56-307; Acts 1998, ch. 678, § 3.
Tenn. Code Ann. § 56-26-116 — TN Code / Title 56 / Chapter 26 / Section 56-26-116
Effect of nonconforming policies
Status: in_force

(a) A policy delivered or issued for delivery to any person in this state in violation of this chapter shall be held valid but shall be construed as provided in this chapter. (b) When any provision in a policy subject to this chapter is in conflict with any provision of this chapter, the rights, duties and obligations of the insurer, the insured and the beneficiary shall be governed by this chapter. Acts 1955, ch. 4, § 5; T.C.A., § 56-3316.
(a) A policy delivered or issued for delivery to any person in this state in violation of this chapter shall be held valid but shall be construed as provided in this chapter.
(b) When any provision in a policy subject to this chapter is in conflict with any provision of this chapter, the rights, duties and obligations of the insurer, the insured and the beneficiary shall be governed by this chapter.
Acts 1955, ch. 4, § 5; T.C.A., § 56-3316.
Tenn. Code Ann. § 56-4-204 — TN Code / Title 56 / Chapter 4 / Section 56-4-204
"Gross premiums" defined
Status: in_force

As used in this part, "gross premiums" means maximum gross premiums as provided in the policy contracts, new and renewal, including policy or membership fees, whether paid in part or in whole by cash, automatic premium loans, dividends applied in any manner whatsoever, and without deduction or exclusion of dividends in any manner; but excluding premiums returned on cancelled policies, or on account of reduction in rates, or reductions in the amount insured or experience rating refunds on life insurance policies and disability insurance policies. Acts 1945, ch. 3, § 1; C. Supp. 1950, § 1248.41 (Williams, § 1248.169); Acts 1977, ch. 220, § 1; T.C.A. (orig. ed.), § 56-412.
As used in this part, "gross premiums" means maximum gross premiums as provided in the policy contracts, new and renewal, including policy or membership fees, whether paid in part or in whole by cash, automatic premium loans, dividends applied in any manner whatsoever, and without deduction or exclusion of dividends in any manner; but excluding premiums returned on cancelled policies, or on account of reduction in rates, or reductions in the amount insured or experience rating refunds on life insurance policies and disability insurance policies.
Acts 1945, ch. 3, § 1; C. Supp. 1950, § 1248.41 (Williams, § 1248.169); Acts 1977, ch. 220, § 1; T.C.A. (orig. ed.), § 56-412.
Tenn. Code Ann. § 56-7-3716 — TN Code / Title 56 / Chapter 7 / Section 56-7-3716
Reviewer criteria
Status: in_force

(a) A health carrier is responsible for monitoring all utilization review activities performed on its behalf and for ensuring that all requirements of this chapter and applicable rules are met. (b) The health carrier shall ensure that appropriate personnel have operational responsibility for the conduct of the utilization review program. (c) Whenever a health carrier contracts with a utilization review organization to perform services subject to this part or applicable rules, the commissioner shall hold the health carrier responsible for monitoring the activities of such utilization review organization and for ensuring that the requirements of this part and applicable rules are met. (d) A utilization review organization shall use clinical criteria as specified in § 56-7-3707(b) . Amended by 2023 Tenn. Acts, ch. 395, s 4, eff. 1/1/2025.
(a) A health carrier is responsible for monitoring all utilization review activities performed on its behalf and for ensuring that all requirements of this chapter and applicable rules are met.
(b) The health carrier shall ensure that appropriate personnel have operational responsibility for the conduct of the utilization review program.
(c) Whenever a health carrier contracts with a utilization review organization to perform services subject to this part or applicable rules, the commissioner shall hold the health carrier responsible for monitoring the activities of such utilization review organization and for ensuring that the requirements of this part and applicable rules are met.
(d) A utilization review organization shall use clinical criteria as specified in § 56-7-3707(b) .
Amended by 2023 Tenn. Acts, ch. 395, s 4, eff. 1/1/2025.
Tenn. Code Ann. § 56-12-116 — TN Code / Title 56 / Chapter 12 / Section 56-12-116
Immunity
Status: in_force

There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the association or its agents or employees, the board of directors, or the commissioner or the commissioner's representatives for any action taken by them in the performance of their powers and duties under this part. Acts 1971, ch. 180, § 16; T.C.A., § 56-4016.
There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the association or its agents or employees, the board of directors, or the commissioner or the commissioner's representatives for any action taken by them in the performance of their powers and duties under this part.
Acts 1971, ch. 180, § 16; T.C.A., § 56-4016.
Tenn. Code Ann. § 56-61-116 — TN Code / Title 56 / Chapter 61 / Section 56-61-116
Standard external review
Status: in_force

(a) Within six (6) months after the date of receipt of a notice of an adverse determination or final adverse determination pursuant to § 56-61-113 , an aggrieved person may file a request for an external review with the health carrier. (b) Within ten (10) business days following the date of receipt of the copy of the external review request, the health carrier shall complete a preliminary review of the request to determine whether: (1) The individual is or was a covered person in the health benefit plan at the time that the healthcare service was requested or, in the case of a retrospective review, was a covered person in the health benefit plan at the time that the healthcare service was provided; (2) The healthcare service that is the subject of the adverse determination or the final adverse determination is a covered service under the covered person's health benefit plan; (3) The covered person has exhausted the health carrier's internal grievance process as set forth in this chapter unless the covered person is not required to exhaust the health carrier's internal grievance process pursuant to § 56-61-115 ; and (4) The covered person has provided all the information and forms required to process an external review, including the release form provided pursuant to § 56-61-113 . (c) Within three (3) business days after completion of the preliminary review, the health carrier shall notify the aggrieved person in writing whether: (1) The request is complete; and (2) The request is eligible for external review. (d) If the request set out in subsection (a): (1) Is not complete, the health carrier shall notify the aggrieved person in writing and include in the notice what information or materials are needed to make the request complete; or (2) Is not eligible for external review, the health carrier shall notify the aggrieved person in writing and include in the notice the reasons for its ineligibility. (e) The notice of initial determination shall include a statement informing the aggrieved person that a health carrier's initial determination that the external review request is ineligible for review may be appealed to the commissioner. (f) The commissioner may determine that a request is eligible for external review under this chapter notwithstanding a health carrier's initial determination that the request is ineligible and require that it be referred for external review. (1) In making a determination under this subsection (f), the commissioner's decision shall be made in accordance with the terms of the covered person's health benefit plan and shall be subject to all applicable provisions of this chapter. (2) Whenever the health carrier or commissioner determines that a request is eligible for external review following the preliminary review conducted pursuant to subdivision (c)(2), within three (3) business days after the determination by the health carrier or within three (3) business days after the date of receipt of the determination by the commissioner, the health carrier shall notify the aggrieved person in writing of the request's eligibility and acceptance for external review. (g) The health carrier shall include in the notice provided to the aggrieved person, a statement that additional information may be submitted in writing to the external review organization within six (6) business days following the date of receipt of the notice provided pursuant to subdivision (f)(2), and that the external review organization shall consider such additional information when conducting the external review. The external review organization is not required to, but may, accept for consideration such additional information submitted by the aggrieved person after six (6) business days. The external review organization shall forward to the health carrier any information received from an aggrieved person no later than one (1) business day after the date the information is received by the external review organization. (h) Within six (6) business days after the date of receipt of the notice provided pursuant to subsection (g), the health carrier shall provide to the external review organization any documents and information considered in making the adverse determination or final adverse determination. (1) Failure by the health carrier to provide the documents and information within the time specified in this subsection (h) shall not delay the external review. (2) If the health carrier fails to provide the documents and information within the time specified in this subsection (h), the external review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination. (3) The external review organization shall notify the health carrier within one (1) business day of its decision to reverse the adverse determination or final adverse determination pursuant to subdivision (h)(2). The health carrier shall notify the aggrieved person within three (3) business days of the external review organization's decision. (i) The external review organization shall review all of the information and documents received within six (6) business days pursuant to subsection (g) and any other information submitted in writing by the aggrieved person. (j) Upon receipt of the information required to be forwarded pursuant to subsection (g), the health carrier may reconsider its final adverse determination that is the subject of the external review. (1) Reconsideration by the health carrier of its final adverse determination shall not delay or terminate the external review. (2) The external review may only be terminated by the health carrier if the health carrier decides, upon completion of its reconsideration, to reverse its final adverse determination and provide coverage or payment for the healthcare service that is the subject of the adverse determination or final adverse determination. If the health carrier reverses its previous determinations pursuant to this subsection (j), the health carrier shall not at a later date reverse its reversal. (3) Within three (3) business days after making the decision to reverse its adverse determination or final adverse determination, the health carrier shall notify the aggrieved person and the external review organization in writing of its decision. The external review organization shall terminate the external review upon receipt of the notice from the health carrier sent pursuant to this subdivision (j)(3). (k) In addition to the documents and information provided pursuant to subsections (g) and (h), the external review organization, to the extent that the information or documents are available and the external review organization considers them appropriate, shall consider the following in reaching a decision: (1) The covered person's pertinent medical records; (2) The attending healthcare professional's recommendation; (3) The consulting reports from appropriate healthcare professionals and other documents submitted by the aggrieved person or the covered person's treating physician or healthcare professional; (4) The terms of coverage under the covered person's health benefit plan with the health carrier to ensure that the external review organization's decision is not contrary to the terms of coverage under the covered person's health benefit plan with the health carrier; (5) Any applicable clinical review criteria developed and used by the health carrier; (6) The most appropriate practice guidelines, which shall include applicable medical or scientific evidence based standards; (7) Findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including: (A) The agency for healthcare research and quality; (B) The national institutes of health; (C) The national cancer institute; (D) The national academy of sciences; (E) The centers for medicare & medicaid services; (F) The federal food and drug administration; and (G) Any national board recognized by the national institutes of health for the purpose of evaluating the medical value of healthcare services; and (8) The opinion of the external review organization's clinical reviewer or reviewers after considering subdivisions (k)(1)-(7), to the extent the information or documents are available and the clinical reviewer or reviewers consider appropriate. (l) In reaching a decision, the external review organization is not bound by any decisions or conclusions reached during the health carrier's internal grievance process as set forth in this chapter. However, the external review organization shall be bound by the terms and conditions of the covered person's health benefit plan. (m) Within forty (40) days after the date of receipt of the request for an external review, the external review organization shall provide written notice of its decision to uphold or reverse the adverse determination or the final adverse determination to the health carrier. (n) Within two (2) calendar days after rendering the decision under subsection (m), the external review organization shall notify the health carrier. Within three (3) calendar days after receiving the decision from the external review organization, the health carrier shall notify the aggrieved person of the external review organization's decision to uphold or reverse the adverse determination or final adverse determination. If the decision involved healthcare provider compensation, the health carrier shall make appropriate payment to the healthcare provider within ten (10) business days of the receipt of a notice of the external review organization's decision. (o) The external review organization shall include in the notice sent pursuant to subsection (m): (1) A general description of the reason for the request for external review; (2) The date that the external review organization received the assignment from the health carrier to conduct the external review; (3) The date that the external review was conducted; (4) The date of the external review organization's decision; (5) The principal reason or reasons for the external review organization's decision, including any applicable, medical or scientific evidence based standards used as a basis for its decision; (6) The rationale for the external review organization's decision; and (7) References to the evidence or documentation, including the medical or scientific evidence based standards, considered in reaching the external review organization's decision. (p) Upon receipt of a notice of a decision pursuant to subsection (m) reversing the adverse determination or final adverse determination, the health carrier shall immediately approve the coverage that was the subject of the adverse determination or final adverse determination. If the decision involved healthcare provider compensation, the health carrier shall make appropriate payment to the healthcare provider within ten (10) business days of the receipt of a notice of the external review organization's decision. (q) The health carrier, regardless of utilization review accreditation commission (URAC) accreditation, shall have a contract with at least two (2) or more external review entities and may give the aggrieved person the opportunity to select, from among the external review organizations that the health carrier has contracts with, the external review organization to conduct the review; provided, however, that the commissioner may require assignments of external review organizations on a random basis if such random assignment is required per the direction of the United States department of health and human services. The commissioner is hereby granted emergency rulemaking authority to implement random assignments pursuant to this subsection (q). Amended by 2013 Tenn. Acts, ch. 106,Secs.s1, s2, s3, s4 eff. 4/11/2013. Acts 2010, ch. 980, § 17; 2011, ch. 206, § 1.
(a) Within six (6) months after the date of receipt of a notice of an adverse determination or final adverse determination pursuant to § 56-61-113 , an aggrieved person may file a request for an external review with the health carrier.
(b) Within ten (10) business days following the date of receipt of the copy of the external review request, the health carrier shall complete a preliminary review of the request to determine whether: (1) The individual is or was a covered person in the health benefit plan at the time that the healthcare service was requested or, in the case of a retrospective review, was a covered person in the health benefit plan at the time that the healthcare service was provided; (2) The healthcare service that is the subject of the adverse determination or the final adverse determination is a covered service under the covered person's health benefit plan; (3) The covered person has exhausted the health carrier's internal grievance process as set forth in this chapter unless the covered person is not required to exhaust the health carrier's internal grievance process pursuant to § 56-61-115 ; and (4) The covered person has provided all the information and forms required to process an external review, including the release form provided pursuant to § 56-61-113 .
(1) The individual is or was a covered person in the health benefit plan at the time that the healthcare service was requested or, in the case of a retrospective review, was a covered person in the health benefit plan at the time that the healthcare service was provided;
(2) The healthcare service that is the subject of the adverse determination or the final adverse determination is a covered service under the covered person's health benefit plan;
(3) The covered person has exhausted the health carrier's internal grievance process as set forth in this chapter unless the covered person is not required to exhaust the health carrier's internal grievance process pursuant to § 56-61-115 ; and
(4) The covered person has provided all the information and forms required to process an external review, including the release form provided pursuant to § 56-61-113 .
(c) Within three (3) business days after completion of the preliminary review, the health carrier shall notify the aggrieved person in writing whether: (1) The request is complete; and (2) The request is eligible for external review.
(1) The request is complete; and
(2) The request is eligible for external review.
(d) If the request set out in subsection (a): (1) Is not complete, the health carrier shall notify the aggrieved person in writing and include in the notice what information or materials are needed to make the request complete; or (2) Is not eligible for external review, the health carrier shall notify the aggrieved person in writing and include in the notice the reasons for its ineligibility.
(1) Is not complete, the health carrier shall notify the aggrieved person in writing and include in the notice what information or materials are needed to make the request complete; or
(2) Is not eligible for external review, the health carrier shall notify the aggrieved person in writing and include in the notice the reasons for its ineligibility.
(e) The notice of initial determination shall include a statement informing the aggrieved person that a health carrier's initial determination that the external review request is ineligible for review may be appealed to the commissioner.
(f) The commissioner may determine that a request is eligible for external review under this chapter notwithstanding a health carrier's initial determination that the request is ineligible and require that it be referred for external review. (1) In making a determination under this subsection (f), the commissioner's decision shall be made in accordance with the terms of the covered person's health benefit plan and shall be subject to all applicable provisions of this chapter. (2) Whenever the health carrier or commissioner determines that a request is eligible for external review following the preliminary review conducted pursuant to subdivision (c)(2), within three (3) business days after the determination by the health carrier or within three (3) business days after the date of receipt of the determination by the commissioner, the health carrier shall notify the aggrieved person in writing of the request's eligibility and acceptance for external review.
(1) In making a determination under this subsection (f), the commissioner's decision shall be made in accordance with the terms of the covered person's health benefit plan and shall be subject to all applicable provisions of this chapter.
(2) Whenever the health carrier or commissioner determines that a request is eligible for external review following the preliminary review conducted pursuant to subdivision (c)(2), within three (3) business days after the determination by the health carrier or within three (3) business days after the date of receipt of the determination by the commissioner, the health carrier shall notify the aggrieved person in writing of the request's eligibility and acceptance for external review.
(g) The health carrier shall include in the notice provided to the aggrieved person, a statement that additional information may be submitted in writing to the external review organization within six (6) business days following the date of receipt of the notice provided pursuant to subdivision (f)(2), and that the external review organization shall consider such additional information when conducting the external review. The external review organization is not required to, but may, accept for consideration such additional information submitted by the aggrieved person after six (6) business days. The external review organization shall forward to the health carrier any information received from an aggrieved person no later than one (1) business day after the date the information is received by the external review organization.
(h) Within six (6) business days after the date of receipt of the notice provided pursuant to subsection (g), the health carrier shall provide to the external review organization any documents and information considered in making the adverse determination or final adverse determination. (1) Failure by the health carrier to provide the documents and information within the time specified in this subsection (h) shall not delay the external review. (2) If the health carrier fails to provide the documents and information within the time specified in this subsection (h), the external review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination. (3) The external review organization shall notify the health carrier within one (1) business day of its decision to reverse the adverse determination or final adverse determination pursuant to subdivision (h)(2). The health carrier shall notify the aggrieved person within three (3) business days of the external review organization's decision.
(1) Failure by the health carrier to provide the documents and information within the time specified in this subsection (h) shall not delay the external review.
(2) If the health carrier fails to provide the documents and information within the time specified in this subsection (h), the external review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination.
(3) The external review organization shall notify the health carrier within one (1) business day of its decision to reverse the adverse determination or final adverse determination pursuant to subdivision (h)(2). The health carrier shall notify the aggrieved person within three (3) business days of the external review organization's decision.
(i) The external review organization shall review all of the information and documents received within six (6) business days pursuant to subsection (g) and any other information submitted in writing by the aggrieved person.
(j) Upon receipt of the information required to be forwarded pursuant to subsection (g), the health carrier may reconsider its final adverse determination that is the subject of the external review. (1) Reconsideration by the health carrier of its final adverse determination shall not delay or terminate the external review. (2) The external review may only be terminated by the health carrier if the health carrier decides, upon completion of its reconsideration, to reverse its final adverse determination and provide coverage or payment for the healthcare service that is the subject of the adverse determination or final adverse determination. If the health carrier reverses its previous determinations pursuant to this subsection (j), the health carrier shall not at a later date reverse its reversal. (3) Within three (3) business days after making the decision to reverse its adverse determination or final adverse determination, the health carrier shall notify the aggrieved person and the external review organization in writing of its decision. The external review organization shall terminate the external review upon receipt of the notice from the health carrier sent pursuant to this subdivision (j)(3).
(1) Reconsideration by the health carrier of its final adverse determination shall not delay or terminate the external review.
(2) The external review may only be terminated by the health carrier if the health carrier decides, upon completion of its reconsideration, to reverse its final adverse determination and provide coverage or payment for the healthcare service that is the subject of the adverse determination or final adverse determination. If the health carrier reverses its previous determinations pursuant to this subsection (j), the health carrier shall not at a later date reverse its reversal.
(3) Within three (3) business days after making the decision to reverse its adverse determination or final adverse determination, the health carrier shall notify the aggrieved person and the external review organization in writing of its decision. The external review organization shall terminate the external review upon receipt of the notice from the health carrier sent pursuant to this subdivision (j)(3).
(k) In addition to the documents and information provided pursuant to subsections (g) and (h), the external review organization, to the extent that the information or documents are available and the external review organization considers them appropriate, shall consider the following in reaching a decision: (1) The covered person's pertinent medical records; (2) The attending healthcare professional's recommendation; (3) The consulting reports from appropriate healthcare professionals and other documents submitted by the aggrieved person or the covered person's treating physician or healthcare professional; (4) The terms of coverage under the covered person's health benefit plan with the health carrier to ensure that the external review organization's decision is not contrary to the terms of coverage under the covered person's health benefit plan with the health carrier; (5) Any applicable clinical review criteria developed and used by the health carrier; (6) The most appropriate practice guidelines, which shall include applicable medical or scientific evidence based standards; (7) Findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including: (A) The agency for healthcare research and quality; (B) The national institutes of health; (C) The national cancer institute; (D) The national academy of sciences; (E) The centers for medicare & medicaid services; (F) The federal food and drug administration; and (G) Any national board recognized by the national institutes of health for the purpose of evaluating the medical value of healthcare services; and (8) The opinion of the external review organization's clinical reviewer or reviewers after considering subdivisions (k)(1)-(7), to the extent the information or documents are available and the clinical reviewer or reviewers consider appropriate.
(1) The covered person's pertinent medical records;
(2) The attending healthcare professional's recommendation;
(3) The consulting reports from appropriate healthcare professionals and other documents submitted by the aggrieved person or the covered person's treating physician or healthcare professional;
(4) The terms of coverage under the covered person's health benefit plan with the health carrier to ensure that the external review organization's decision is not contrary to the terms of coverage under the covered person's health benefit plan with the health carrier;
(5) Any applicable clinical review criteria developed and used by the health carrier;
(6) The most appropriate practice guidelines, which shall include applicable medical or scientific evidence based standards;
(7) Findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including: (A) The agency for healthcare research and quality; (B) The national institutes of health; (C) The national cancer institute; (D) The national academy of sciences; (E) The centers for medicare & medicaid services; (F) The federal food and drug administration; and (G) Any national board recognized by the national institutes of health for the purpose of evaluating the medical value of healthcare services; and
(A) The agency for healthcare research and quality;
(B) The national institutes of health;
(C) The national cancer institute;
(D) The national academy of sciences;
(E) The centers for medicare & medicaid services;
(F) The federal food and drug administration; and
(G) Any national board recognized by the national institutes of health for the purpose of evaluating the medical value of healthcare services; and
(8) The opinion of the external review organization's clinical reviewer or reviewers after considering subdivisions (k)(1)-(7), to the extent the information or documents are available and the clinical reviewer or reviewers consider appropriate.
(l) In reaching a decision, the external review organization is not bound by any decisions or conclusions reached during the health carrier's internal grievance process as set forth in this chapter. However, the external review organization shall be bound by the terms and conditions of the covered person's health benefit plan.
(m) Within forty (40) days after the date of receipt of the request for an external review, the external review organization shall provide written notice of its decision to uphold or reverse the adverse determination or the final adverse determination to the health carrier.
(n) Within two (2) calendar days after rendering the decision under subsection (m), the external review organization shall notify the health carrier. Within three (3) calendar days after receiving the decision from the external review organization, the health carrier shall notify the aggrieved person of the external review organization's decision to uphold or reverse the adverse determination or final adverse determination. If the decision involved healthcare provider compensation, the health carrier shall make appropriate payment to the healthcare provider within ten (10) business days of the receipt of a notice of the external review organization's decision.
(o) The external review organization shall include in the notice sent pursuant to subsection (m): (1) A general description of the reason for the request for external review; (2) The date that the external review organization received the assignment from the health carrier to conduct the external review; (3) The date that the external review was conducted; (4) The date of the external review organization's decision; (5) The principal reason or reasons for the external review organization's decision, including any applicable, medical or scientific evidence based standards used as a basis for its decision; (6) The rationale for the external review organization's decision; and (7) References to the evidence or documentation, including the medical or scientific evidence based standards, considered in reaching the external review organization's decision.
(1) A general description of the reason for the request for external review;
(2) The date that the external review organization received the assignment from the health carrier to conduct the external review;
(3) The date that the external review was conducted;
(4) The date of the external review organization's decision;
(5) The principal reason or reasons for the external review organization's decision, including any applicable, medical or scientific evidence based standards used as a basis for its decision;
(6) The rationale for the external review organization's decision; and
(7) References to the evidence or documentation, including the medical or scientific evidence based standards, considered in reaching the external review organization's decision.
(p) Upon receipt of a notice of a decision pursuant to subsection (m) reversing the adverse determination or final adverse determination, the health carrier shall immediately approve the coverage that was the subject of the adverse determination or final adverse determination. If the decision involved healthcare provider compensation, the health carrier shall make appropriate payment to the healthcare provider within ten (10) business days of the receipt of a notice of the external review organization's decision.
(q) The health carrier, regardless of utilization review accreditation commission (URAC) accreditation, shall have a contract with at least two (2) or more external review entities and may give the aggrieved person the opportunity to select, from among the external review organizations that the health carrier has contracts with, the external review organization to conduct the review; provided, however, that the commissioner may require assignments of external review organizations on a random basis if such random assignment is required per the direction of the United States department of health and human services. The commissioner is hereby granted emergency rulemaking authority to implement random assignments pursuant to this subsection (q).
Amended by 2013 Tenn. Acts, ch. 106,Secs.s1, s2, s3, s4 eff. 4/11/2013.
Acts 2010, ch. 980, § 17; 2011, ch. 206, § 1.
Tenn. Code Ann. § 56-41-111 — TN Code / Title 56 / Chapter 41 / Section 56-41-111
Scope and types of voluntary plans
Status: in_force

Insurers doing business in this state are authorized to prepare voluntary risk sharing or market assistance plans providing any specific kind, line or class of insurance coverage, or subdivision or combination of any specific kind, line or class of insurance coverage, for all or any part of the state in which the insurance is not readily available in the voluntary market and that the public interest requires to be available. Voluntary risk sharing or market assistance plans shall be submitted to the commissioner and may be put into operation only with the commissioner's approval. If the commissioner finds that a voluntary risk sharing or market assistance plan would sufficiently provide essential insurance coverage, the commissioner may authorize formulation of the plans in lieu of establishing the association. Acts 1987, ch. 439, § 10.
Insurers doing business in this state are authorized to prepare voluntary risk sharing or market assistance plans providing any specific kind, line or class of insurance coverage, or subdivision or combination of any specific kind, line or class of insurance coverage, for all or any part of the state in which the insurance is not readily available in the voluntary market and that the public interest requires to be available. Voluntary risk sharing or market assistance plans shall be submitted to the commissioner and may be put into operation only with the commissioner's approval. If the commissioner finds that a voluntary risk sharing or market assistance plan would sufficiently provide essential insurance coverage, the commissioner may authorize formulation of the plans in lieu of establishing the association.
Acts 1987, ch. 439, § 10.
Tenn. Code Ann. § 56-3-704 — TN Code / Title 56 / Chapter 3 / Section 56-3-704
Restrictions on sale of equity securities
Status: in_force

It is unlawful for the beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company, if the person selling the security or the person's principal: (1) Does not own the security sold; or (2) If owning the security, does not deliver it against the sale within twenty (20) days thereafter, or does not within five (5) days after the sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if the person proves that, notwithstanding the exercise of good faith, the person was unable to make the delivery or deposit within that time, or that to do so would cause undue inconvenience or expense. Acts 1965, ch. 95, § 3; T.C.A., §§ 56-252, 56-334.
It is unlawful for the beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company, if the person selling the security or the person's principal:
(1) Does not own the security sold; or
(2) If owning the security, does not deliver it against the sale within twenty (20) days thereafter, or does not within five (5) days after the sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if the person proves that, notwithstanding the exercise of good faith, the person was unable to make the delivery or deposit within that time, or that to do so would cause undue inconvenience or expense.
Acts 1965, ch. 95, § 3; T.C.A., §§ 56-252, 56-334.
Tenn. Code Ann. § 56-6-1107 — TN Code / Title 56 / Chapter 6 / Section 56-6-1107
Licensure
Status: in_force

(a) A sworn application for a license under this part shall be made to and filed with the commissioner on forms prescribed and furnished by the department. (b) The application shall: (1) Provide the name, residence address, and other information required by the department for an individual that is designated by the applicant as the individual responsible for the vendor's compliance with the requirements of this part. Notwithstanding any other law, the individual required to be designated by the vendor pursuant to this section and § 56-6-106(b)(2) shall not be required to be a principal, officer or employee of the vendor but shall be a principal, officer or employee of the supervising entity who holds a current producer license in this state; and (2) Provide the location of the applicant's home office. (c) Initial licenses issued pursuant to this part shall be valid for a period of twenty-four (24) months and expire biennially on March 1 of the renewal year assigned by the commissioner. (d) (1) Except as provided in subdivision (d)(2), each vendor of portable electronics licensed under this part shall pay to the commissioner a fee as prescribed by the commissioner, but in no event shall the fee exceed one thousand dollars ($1,000) for an initial portable electronics limited lines license and five hundred dollars ($500) for each renewal thereof. (2) The fee prescribed for a vendor that is engaged in portable electronics transactions at ten (10) or fewer locations in this state shall not exceed one hundred dollars ($100) for an initial license and for each renewal thereof. Acts 2011, ch. 312, § 8.
(a) A sworn application for a license under this part shall be made to and filed with the commissioner on forms prescribed and furnished by the department.
(b) The application shall: (1) Provide the name, residence address, and other information required by the department for an individual that is designated by the applicant as the individual responsible for the vendor's compliance with the requirements of this part. Notwithstanding any other law, the individual required to be designated by the vendor pursuant to this section and § 56-6-106(b)(2) shall not be required to be a principal, officer or employee of the vendor but shall be a principal, officer or employee of the supervising entity who holds a current producer license in this state; and (2) Provide the location of the applicant's home office.
(1) Provide the name, residence address, and other information required by the department for an individual that is designated by the applicant as the individual responsible for the vendor's compliance with the requirements of this part. Notwithstanding any other law, the individual required to be designated by the vendor pursuant to this section and § 56-6-106(b)(2) shall not be required to be a principal, officer or employee of the vendor but shall be a principal, officer or employee of the supervising entity who holds a current producer license in this state; and
(2) Provide the location of the applicant's home office.
(c) Initial licenses issued pursuant to this part shall be valid for a period of twenty-four (24) months and expire biennially on March 1 of the renewal year assigned by the commissioner.
(d) (1) Except as provided in subdivision (d)(2), each vendor of portable electronics licensed under this part shall pay to the commissioner a fee as prescribed by the commissioner, but in no event shall the fee exceed one thousand dollars ($1,000) for an initial portable electronics limited lines license and five hundred dollars ($500) for each renewal thereof. (2) The fee prescribed for a vendor that is engaged in portable electronics transactions at ten (10) or fewer locations in this state shall not exceed one hundred dollars ($100) for an initial license and for each renewal thereof.
(1) Except as provided in subdivision (d)(2), each vendor of portable electronics licensed under this part shall pay to the commissioner a fee as prescribed by the commissioner, but in no event shall the fee exceed one thousand dollars ($1,000) for an initial portable electronics limited lines license and five hundred dollars ($500) for each renewal thereof.
(2) The fee prescribed for a vendor that is engaged in portable electronics transactions at ten (10) or fewer locations in this state shall not exceed one hundred dollars ($100) for an initial license and for each renewal thereof.
Acts 2011, ch. 312, § 8.
Tenn. Code Ann. § 56-16-116 — TN Code / Title 56 / Chapter 16 / Section 56-16-116
Consent to service of process
Status: in_force

(a) (1) Each attorney of a domestic reciprocal who files the declaration required by § 56-16-201 , and each attorney of a foreign or alien reciprocal who applies for a license to transact the business of insurance in this state, shall file with the department a written power of attorney executed by the attorney appointing the commissioner as agent of the reciprocal. (2) Upon the appointment, the commissioner: (A) May be served all lawful process against or notice to the reciprocal; and (B) Shall be authorized to enter an appearance on behalf of the reciprocal. (3) A copy of the power of attorney, duly certified by the department, shall be received in evidence in all courts of this state. (b) Whenever process or notice is served upon the commissioner, a copy of the process or notice shall be mailed to the attorney at the address shown on the power of attorney. Nothing in this section shall limit the right to serve any process or notice upon any reciprocal in any other manner permitted by law. Acts 1990, ch. 728, § 2; T.C.A. § 56-16-216.
(a) (1) Each attorney of a domestic reciprocal who files the declaration required by § 56-16-201 , and each attorney of a foreign or alien reciprocal who applies for a license to transact the business of insurance in this state, shall file with the department a written power of attorney executed by the attorney appointing the commissioner as agent of the reciprocal. (2) Upon the appointment, the commissioner: (A) May be served all lawful process against or notice to the reciprocal; and (B) Shall be authorized to enter an appearance on behalf of the reciprocal. (3) A copy of the power of attorney, duly certified by the department, shall be received in evidence in all courts of this state.
(1) Each attorney of a domestic reciprocal who files the declaration required by § 56-16-201 , and each attorney of a foreign or alien reciprocal who applies for a license to transact the business of insurance in this state, shall file with the department a written power of attorney executed by the attorney appointing the commissioner as agent of the reciprocal.
(2) Upon the appointment, the commissioner: (A) May be served all lawful process against or notice to the reciprocal; and (B) Shall be authorized to enter an appearance on behalf of the reciprocal.
(A) May be served all lawful process against or notice to the reciprocal; and
(B) Shall be authorized to enter an appearance on behalf of the reciprocal.
(3) A copy of the power of attorney, duly certified by the department, shall be received in evidence in all courts of this state.
(b) Whenever process or notice is served upon the commissioner, a copy of the process or notice shall be mailed to the attorney at the address shown on the power of attorney. Nothing in this section shall limit the right to serve any process or notice upon any reciprocal in any other manner permitted by law.
Acts 1990, ch. 728, § 2; T.C.A. § 56-16-216.