Tenn. Code Ann. § 56-3-302 — TN Code / Title 56 / Chapter 3 / Section 56-3-302
Part definitions
Status: in_force

As used in this part: (1) "Acceptable collateral" means: (A) As to securities lending transactions, and for the purpose of calculating counterparty exposure amount, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, and as to lending foreign securities, sovereign debt rated NAIC-SVO 1; and (B) As to repurchase transactions and reverse repurchase transactions, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; (2) "Admitted assets" means assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the commissioner, but: (A) Excluding the assets of separate accounts, the investments of which are not subject to this part; (B) (i) The amount of the liability recorded on the insurer's statutory balance sheet for: (a) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction; and (b) Cash received in a dollar roll transaction; (ii) Shall be deducted from the insurer's admitted assets for the purpose of calculating any limitation in this part that is based upon admitted assets; (3) "Affiliate" means, as to any person, another person that, directly or indirectly through one (1) or more intermediaries, controls, is controlled by, or is under common control with the person; (4) "Business entity" includes a sole proprietorship, corporation, limited liability company, association, general or limited partnership, joint stock company, joint venture, mutual fund, bank, trust, real estate investment trust, joint tenancy or other similar form of business organization, whether organized for-profit or not-for-profit; (5) "Cap" means an agreement obligating the seller to make payments to the buyer with each payment based on the amount by which a reference price or level or the performance or value of one (1) or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price; (6) "Capital and surplus" means the sum of the capital and surplus of the insurer required to be shown on the statutory financial statement of the insurer most recently required to be filed with the commissioner; (7) (A) "Cash equivalents" means highly rated, highly liquid and readily marketable investments or securities with a remaining term to maturity of one (1) year or less, which includes money market funds as defined in § 56-3-303(a)(17) ; (B) For purposes of subdivision (7)(A), "highly rated" means an investment rated "P-1" by Moody's Investors Service, Inc., or "A-1" by the Standard and Poor's Division of the McGraw Hill Companies, Inc. or its equivalent rating by a nationally recognized statistical rating organization recognized by the NAIC-SVO; (8) "Collar" means an agreement to receive payments as the buyer of an option, cap or floor and to make payments as the seller of a different option, cap or floor; (9) "Counterparty exposure amount" means: (A) For an over-the-counter derivative instrument not entered into pursuant to a written master agreement which provides for netting of payments owed by the respective parties: (i) The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or (ii) Zero (0) if the liquidation of the derivative instrument would not result in a final cash payment to the insurer; (B) For over-the-counter derivative instruments entered into pursuant to a written master agreement that provides for netting of payments owed by the respective parties, and the domiciliary jurisdiction of the counterparty is either within the United States, or if not within the United States, is within a foreign, not United States, jurisdiction listed in the Purposes and Procedures Manual of the Securities Valuation Office of the NAIC or, if it is no longer being published, the successor publication to the Purposes and Procedures Manual of the Securities Valuation Office of the NAIC, as eligible for netting, the greater of zero (0) or the net sum payable to the insurer in connection with all derivative instruments subject to the written master agreement upon their liquidation in the event of default by the counterparty pursuant to the master agreement, assuming no conditions precedent to the obligations of the counterparty to make such a payment and assuming no set off of amounts payable pursuant to any other instrument or agreement; (C) For purposes of this subdivision (9), market value or the net sum payable, as the case may be, shall be determined at the end of the most recent quarter of the insurer's fiscal year and shall be reduced by the market value of acceptable collateral held by the insurer or a custodian on the insurer's behalf; (10) (A) "Derivative instrument" means any agreement, option or instrument, or any series or combinations of an agreement, option or instrument: (i) To make or take delivery of, or assume or relinquish, a specified amount of one (1) or more underlying interests, or to make a cash settlement in lieu thereof; or (ii) That has a price, performance, value or cash flow based primarily upon the actual or expected price, yield, level, performance, value or cash flow of one (1) or more underlying interests; (B) (i) "Derivative instruments" includes options, warrants (not attached to another financial instrument purchased by the insurer), caps, floors, collars, swaps, swaptions, forwards, futures and any other agreements, options or instruments substantially similar thereto, or any series or combinations thereof; (ii) "Derivative instruments" does not include collateralized mortgage obligations, other asset-backed securities, principal-protected structured securities, floating rate securities, or instruments that an insurer is otherwise authorized to invest in or receive under this part other than under § 56-3-303(a)(21) , and any debt obligations of the insurer; (11) "Derivative transaction" means a transaction involving the use of one (1) or more derivative instruments. Dollar roll transactions, repurchase transactions, reverse repurchase transactions and securities lending transactions shall not be included as derivative transactions for purposes of § 56-3-303(a)(21) ; (12) "Dollar roll transaction" means two (2) simultaneous transactions with settlement dates no more than ninety-six (96) days apart so that in one (1) transaction an insurer sells to a business entity, and in the other transaction the insurer is obligated to purchase from the same business entity, substantially similar securities of the following types: (A) Mortgage-backed securities issued, assumed or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation or their respective successors; and (B) Other mortgage-backed securities referred to in § 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 ( 15 U.S.C. § 77r-1 ); (13) "Equity interests" includes common stock, an equity investment in an investment company, other than a money market mutual fund described in § 56-3-303(a)(17) , a beneficial interest in a trust or a real estate investment trust, partnership interests, warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired, and equity interests in any business entity, other than preferred stock or shares as described in § 56-3-303(a)(3) ; (14) "Fixed charges" includes interest on all obligations and amortization of debt discount and expenses; (15) "Floor" means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance or value of one (1) or more underlying interests; (16) (A) "Foreign investment" means an investment in a foreign jurisdiction, or an investment in a person, real estate or asset domiciled in a foreign jurisdiction. An investment shall not be deemed to be foreign if the issuing person, qualified primary credit source or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless: (i) The issuing person is a shell business entity; and (ii) The investment is not assumed, accepted, guaranteed or insured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction; (B) For purposes of subdivision (16)(A): (i) "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; (ii) "Qualified primary credit source" means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; and (iii) "Shell business entity" means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned or previously owned by a person domiciled in a foreign jurisdiction; (17) "Foreign jurisdiction" means: (A) A jurisdiction other than a domestic jurisdiction; or (B) A commonwealth, territory or possession of the United States; (18) "Forward" means an agreement, other than a future, to make or take delivery in the future of one (1) or more underlying interests, or effect a cash settlement, based on the actual or expected price, level, performance or value of the underlying interests, but does not mean or include spot transactions effected within customary settlement periods, when-issued purchases or other similar cash market transactions; (19) "Future" means an agreement, traded on a futures exchange, to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of, one (1) or more underlying interests; (20) "Futures exchange" means a foreign or domestic exchange, contract market or board of trade on which trading in futures is conducted and, in the United States, that has been authorized for such trading by the commodities futures trading commission or any successor of the commodities futures trading commission; (21) "Hedging transaction" means a derivative transaction that is entered into and maintained to manage: (A) The risk of a change in the value, yield, price, cash flow or quantity of assets or liabilities, or a portfolio of assets and/or liabilities, that the insurer has acquired or incurred or anticipates acquiring or incurring; or (B) The currency exchange rate risk related to assets or liabilities, or a portfolio of assets and/or liabilities, that an insurer has acquired or incurred or anticipates acquiring or incurring; (22) "Income generation transaction" means a derivative transaction which is entered into to generate income. A derivative transaction which is entered into as a hedging transaction or a replication transaction shall not be considered an income generation transaction; (23) "Investment practices" means transactions of the types described in § 56-3-303(a)(10), (15), (18) and (21) ; (24) "Market value" means the price for the security or derivative instrument obtained from a generally recognized source or the most recent quotation from the source or, to the extent no generally recognized source exists, the price for the security or derivative instrument as determined pursuant to the terms of the instrument or in good faith by the insurer as can be reasonably demonstrated to the commissioner upon request, plus accrued but unpaid income on the security or derivative instrument to the extent not included in the price as of the date; (25) "NAIC" means the National Association of Insurance Commissioners; (26) "NAIC-SVO" means the securities valuation office of the National Association of Insurance Commissioners; (27) (A) "Net earnings available for fixed charges" means net income determined on either a consolidated or an unconsolidated basis after allowance for operating and maintenance expenses, depreciation and depletion, and taxes, other than federal and state income taxes, but excluding extraordinary nonrecurring items of income or expense appearing in the regular financial statements of the issuing, assuming or guaranteeing business entity; (B) In applying tests of "net earnings available for fixed charges" to an issuing, assuming or guaranteeing business entity or a lessee, whether or not in legal existence during the whole of the test period, that has at or prior to the date of investment by the insurance company acquired the assets of any other business entity by purchase, merger, consolidation or otherwise substantially as an entirety, net earnings available for fixed charges of the predecessor or constituent business entity for such portion of the test period as preceded acquisition may be included in the net earnings of the issuing, assuming or guaranteeing business entity or the lessee, in accordance with the consolidated earnings statement covering the period. The requirements imposed by § 56-3-303(a)(2) and (13) upon the issuing, assuming or guaranteeing business entity of the lessee are deemed to have been met if, at the time the investment is made, a business entity that meets the requirements has guaranteed the indebtedness or has otherwise become obligated to pay amounts that are applicable to the payment of and sufficient to discharge the principal of and interest on the indebtedness in accordance with its terms; provided, that in determining whether the requirements have been met, the pro forma annual interest on the indebtedness is included in the fixed charges of the business entity applicable to the test period in question; (28) "Net earnings available for fixed charges and dividends" are determined in the same manner as net earnings available for fixed charges, but after allowance for federal and state income taxes; (29) "Obligation" means a note, bond, debenture, trust certificate, equipment trust certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, asset-backed security, NAIC-SVO credit tenant loan, loan secured by financing a net lease or net leases, and other evidence of indebtedness for the payment of money, or participations, certificates or other evidences of an interest in any of the obligations listed in this subdivision (29), whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment; (30) "Option" means an agreement giving the buyer the right to buy or receive, known as a "call option", sell or deliver, known as a "put option", enter into, extend or terminate or effect a cash settlement based on the actual or expected price, spread, level, performance or value of one (1) or more underlying interests; (31) "Over-the-counter derivative instrument" means a derivative instrument entered into with a business entity, other than through a securities exchange, futures exchange, or cleared through a qualified clearinghouse; (32) "Person" means an individual, a business entity, a multilateral development bank or a government or quasi-governmental body, such as a political subdivision or a government sponsored enterprise; (33) "Potential exposure" means: (A) As to a futures position, the amount of initial margin required for that position; or (B) As to swaps, collars and forwards, one half percent (0.5%) times the notional amount times the square root of the remaining years to maturity; (34) "Preferred dividend requirements" means dividends at the maximum prescribed rate on all preferred stock of the same class as that being acquired by the insurance company and on all stock ranking as to dividends on a parity with the dividends or prior to the dividends, whether or not the dividends are cumulative; (35) "Qualified clearinghouse" means a clearinghouse subject to the rules of a securities exchange or a futures exchange that provides clearing services, including acting as a counterparty to each of the parties to a transaction such that the parties no longer have credit risk to each other; (36) "Replication transaction" means a derivative transaction or combination of derivative transactions effected either separately or in conjunction with cash market investments included in the insurer's investment portfolio in order to replicate the risks and returns of another authorized transaction, investment or instrument and/or operate as a substitute for cash market transactions. A derivative transaction entered into by the insurer as a hedging transaction shall not be considered a replication transaction; (37) "Repurchase transaction" means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand; (38) "Reverse repurchase transaction" means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand; (39) "Securities exchange" means: (A) An exchange registered as a national securities exchange or a securities market registered under the Securities Exchange Act of 1934 ( 15 U.S.C. § 78 et seq.); (B) Private Offerings Resales and Trading through Automated Linkages (PORTAL); or (C) A designated offshore securities market as defined in Securities Exchange Commission Regulation S, 17 CFR part 230; (40) "Securities lending transaction" means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand; (41) "State" includes the several states, the District of Columbia, the Commonwealth of Puerto Rico and the possessions of the United States; (42) "SVO Rating" means the numerical ranking designation of one (1) through six (6) assigned to securities as determined by the NAIC-SVO; (43) "Swap" means an agreement to exchange or to net payments at one (1) or more times based on the actual or expected price, yield, level, performance or value of one (1) or more underlying interests; (44) "Swaption" means an option to purchase or sell a swap at a given price and time or at a series of prices and times. "Swaption" does not mean a swap with an embedded option; (45) "Underlying interest" means the assets, liabilities or other interests, or a combination of assets, liabilities or other interests, underlying a derivative instrument, such as any one (1) or more securities, currencies, rates, indices, commodities or derivative instruments; and (46) "Warrant" means an instrument that gives the holder the right to purchase or sell the underlying interest at a given price and time or at a series of prices and times outlined in the warrant agreement. Acts 1907, ch. 458, § 2; Shan., § 3348a29; Code 1932, § 6204; Acts 1935, ch. 105, § 1; 1937, ch. 76, § 1; 1939, ch. 121, § 1; 1945, ch. 106, §§ 1, 2; 1947, ch. 120, § 1; C. Supp. 1950, § 6204; Acts 1951, ch. 77, § 1; T.C.A. (orig. ed.), § 56-217; Acts 1961, ch. 224, § 1; 1961, ch. 229, § 1; 1965, ch. 63, § 1; modified; T.C.A., § 56-306; Acts 1995, ch. 363, § 10; 1998, ch. 678, § 2.
As used in this part:
(1) "Acceptable collateral" means: (A) As to securities lending transactions, and for the purpose of calculating counterparty exposure amount, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, and as to lending foreign securities, sovereign debt rated NAIC-SVO 1; and (B) As to repurchase transactions and reverse repurchase transactions, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation;
(A) As to securities lending transactions, and for the purpose of calculating counterparty exposure amount, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, and as to lending foreign securities, sovereign debt rated NAIC-SVO 1; and
(B) As to repurchase transactions and reverse repurchase transactions, cash, cash equivalents, letters of credit, direct obligations of, or securities that are fully guaranteed as to principal and interest by, the government of the United States, or by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation;
(2) "Admitted assets" means assets permitted to be reported as admitted assets on the statutory financial statement of the insurer most recently required to be filed with the commissioner, but: (A) Excluding the assets of separate accounts, the investments of which are not subject to this part; (B) (i) The amount of the liability recorded on the insurer's statutory balance sheet for: (a) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction; and (b) Cash received in a dollar roll transaction; (ii) Shall be deducted from the insurer's admitted assets for the purpose of calculating any limitation in this part that is based upon admitted assets;
(A) Excluding the assets of separate accounts, the investments of which are not subject to this part;
(B) (i) The amount of the liability recorded on the insurer's statutory balance sheet for: (a) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction; and (b) Cash received in a dollar roll transaction; (ii) Shall be deducted from the insurer's admitted assets for the purpose of calculating any limitation in this part that is based upon admitted assets;
(i) The amount of the liability recorded on the insurer's statutory balance sheet for: (a) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction; and (b) Cash received in a dollar roll transaction;
(a) The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction; and
(b) Cash received in a dollar roll transaction;
(ii) Shall be deducted from the insurer's admitted assets for the purpose of calculating any limitation in this part that is based upon admitted assets;
(3) "Affiliate" means, as to any person, another person that, directly or indirectly through one (1) or more intermediaries, controls, is controlled by, or is under common control with the person;
(4) "Business entity" includes a sole proprietorship, corporation, limited liability company, association, general or limited partnership, joint stock company, joint venture, mutual fund, bank, trust, real estate investment trust, joint tenancy or other similar form of business organization, whether organized for-profit or not-for-profit;
(5) "Cap" means an agreement obligating the seller to make payments to the buyer with each payment based on the amount by which a reference price or level or the performance or value of one (1) or more underlying interests exceeds a predetermined number, sometimes called the strike rate or strike price;
(6) "Capital and surplus" means the sum of the capital and surplus of the insurer required to be shown on the statutory financial statement of the insurer most recently required to be filed with the commissioner;
(7) (A) "Cash equivalents" means highly rated, highly liquid and readily marketable investments or securities with a remaining term to maturity of one (1) year or less, which includes money market funds as defined in § 56-3-303(a)(17) ; (B) For purposes of subdivision (7)(A), "highly rated" means an investment rated "P-1" by Moody's Investors Service, Inc., or "A-1" by the Standard and Poor's Division of the McGraw Hill Companies, Inc. or its equivalent rating by a nationally recognized statistical rating organization recognized by the NAIC-SVO;
(A) "Cash equivalents" means highly rated, highly liquid and readily marketable investments or securities with a remaining term to maturity of one (1) year or less, which includes money market funds as defined in § 56-3-303(a)(17) ;
(B) For purposes of subdivision (7)(A), "highly rated" means an investment rated "P-1" by Moody's Investors Service, Inc., or "A-1" by the Standard and Poor's Division of the McGraw Hill Companies, Inc. or its equivalent rating by a nationally recognized statistical rating organization recognized by the NAIC-SVO;
(8) "Collar" means an agreement to receive payments as the buyer of an option, cap or floor and to make payments as the seller of a different option, cap or floor;
(9) "Counterparty exposure amount" means: (A) For an over-the-counter derivative instrument not entered into pursuant to a written master agreement which provides for netting of payments owed by the respective parties: (i) The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or (ii) Zero (0) if the liquidation of the derivative instrument would not result in a final cash payment to the insurer; (B) For over-the-counter derivative instruments entered into pursuant to a written master agreement that provides for netting of payments owed by the respective parties, and the domiciliary jurisdiction of the counterparty is either within the United States, or if not within the United States, is within a foreign, not United States, jurisdiction listed in the Purposes and Procedures Manual of the Securities Valuation Office of the NAIC or, if it is no longer being published, the successor publication to the Purposes and Procedures Manual of the Securities Valuation Office of the NAIC, as eligible for netting, the greater of zero (0) or the net sum payable to the insurer in connection with all derivative instruments subject to the written master agreement upon their liquidation in the event of default by the counterparty pursuant to the master agreement, assuming no conditions precedent to the obligations of the counterparty to make such a payment and assuming no set off of amounts payable pursuant to any other instrument or agreement; (C) For purposes of this subdivision (9), market value or the net sum payable, as the case may be, shall be determined at the end of the most recent quarter of the insurer's fiscal year and shall be reduced by the market value of acceptable collateral held by the insurer or a custodian on the insurer's behalf;
(A) For an over-the-counter derivative instrument not entered into pursuant to a written master agreement which provides for netting of payments owed by the respective parties: (i) The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or (ii) Zero (0) if the liquidation of the derivative instrument would not result in a final cash payment to the insurer;
(i) The market value of the over-the-counter derivative instrument if the liquidation of the derivative instrument would result in a final cash payment to the insurer; or
(ii) Zero (0) if the liquidation of the derivative instrument would not result in a final cash payment to the insurer;
(B) For over-the-counter derivative instruments entered into pursuant to a written master agreement that provides for netting of payments owed by the respective parties, and the domiciliary jurisdiction of the counterparty is either within the United States, or if not within the United States, is within a foreign, not United States, jurisdiction listed in the Purposes and Procedures Manual of the Securities Valuation Office of the NAIC or, if it is no longer being published, the successor publication to the Purposes and Procedures Manual of the Securities Valuation Office of the NAIC, as eligible for netting, the greater of zero (0) or the net sum payable to the insurer in connection with all derivative instruments subject to the written master agreement upon their liquidation in the event of default by the counterparty pursuant to the master agreement, assuming no conditions precedent to the obligations of the counterparty to make such a payment and assuming no set off of amounts payable pursuant to any other instrument or agreement;
(C) For purposes of this subdivision (9), market value or the net sum payable, as the case may be, shall be determined at the end of the most recent quarter of the insurer's fiscal year and shall be reduced by the market value of acceptable collateral held by the insurer or a custodian on the insurer's behalf;
(10) (A) "Derivative instrument" means any agreement, option or instrument, or any series or combinations of an agreement, option or instrument: (i) To make or take delivery of, or assume or relinquish, a specified amount of one (1) or more underlying interests, or to make a cash settlement in lieu thereof; or (ii) That has a price, performance, value or cash flow based primarily upon the actual or expected price, yield, level, performance, value or cash flow of one (1) or more underlying interests; (B) (i) "Derivative instruments" includes options, warrants (not attached to another financial instrument purchased by the insurer), caps, floors, collars, swaps, swaptions, forwards, futures and any other agreements, options or instruments substantially similar thereto, or any series or combinations thereof; (ii) "Derivative instruments" does not include collateralized mortgage obligations, other asset-backed securities, principal-protected structured securities, floating rate securities, or instruments that an insurer is otherwise authorized to invest in or receive under this part other than under § 56-3-303(a)(21) , and any debt obligations of the insurer;
(A) "Derivative instrument" means any agreement, option or instrument, or any series or combinations of an agreement, option or instrument: (i) To make or take delivery of, or assume or relinquish, a specified amount of one (1) or more underlying interests, or to make a cash settlement in lieu thereof; or (ii) That has a price, performance, value or cash flow based primarily upon the actual or expected price, yield, level, performance, value or cash flow of one (1) or more underlying interests;
(i) To make or take delivery of, or assume or relinquish, a specified amount of one (1) or more underlying interests, or to make a cash settlement in lieu thereof; or
(ii) That has a price, performance, value or cash flow based primarily upon the actual or expected price, yield, level, performance, value or cash flow of one (1) or more underlying interests;
(B) (i) "Derivative instruments" includes options, warrants (not attached to another financial instrument purchased by the insurer), caps, floors, collars, swaps, swaptions, forwards, futures and any other agreements, options or instruments substantially similar thereto, or any series or combinations thereof; (ii) "Derivative instruments" does not include collateralized mortgage obligations, other asset-backed securities, principal-protected structured securities, floating rate securities, or instruments that an insurer is otherwise authorized to invest in or receive under this part other than under § 56-3-303(a)(21) , and any debt obligations of the insurer;
(i) "Derivative instruments" includes options, warrants (not attached to another financial instrument purchased by the insurer), caps, floors, collars, swaps, swaptions, forwards, futures and any other agreements, options or instruments substantially similar thereto, or any series or combinations thereof;
(ii) "Derivative instruments" does not include collateralized mortgage obligations, other asset-backed securities, principal-protected structured securities, floating rate securities, or instruments that an insurer is otherwise authorized to invest in or receive under this part other than under § 56-3-303(a)(21) , and any debt obligations of the insurer;
(11) "Derivative transaction" means a transaction involving the use of one (1) or more derivative instruments. Dollar roll transactions, repurchase transactions, reverse repurchase transactions and securities lending transactions shall not be included as derivative transactions for purposes of § 56-3-303(a)(21) ;
(12) "Dollar roll transaction" means two (2) simultaneous transactions with settlement dates no more than ninety-six (96) days apart so that in one (1) transaction an insurer sells to a business entity, and in the other transaction the insurer is obligated to purchase from the same business entity, substantially similar securities of the following types: (A) Mortgage-backed securities issued, assumed or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation or their respective successors; and (B) Other mortgage-backed securities referred to in § 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 ( 15 U.S.C. § 77r-1 );
(A) Mortgage-backed securities issued, assumed or guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation or their respective successors; and
(B) Other mortgage-backed securities referred to in § 106 of Title I of the Secondary Mortgage Market Enhancement Act of 1984 ( 15 U.S.C. § 77r-1 );
(13) "Equity interests" includes common stock, an equity investment in an investment company, other than a money market mutual fund described in § 56-3-303(a)(17) , a beneficial interest in a trust or a real estate investment trust, partnership interests, warrants or other rights to acquire equity interests that are created by the person that owns or would issue the equity to be acquired, and equity interests in any business entity, other than preferred stock or shares as described in § 56-3-303(a)(3) ;
(14) "Fixed charges" includes interest on all obligations and amortization of debt discount and expenses;
(15) "Floor" means an agreement obligating the seller to make payments to the buyer in which each payment is based on the amount by which a predetermined number, sometimes called the floor rate or price, exceeds a reference price, level, performance or value of one (1) or more underlying interests;
(16) (A) "Foreign investment" means an investment in a foreign jurisdiction, or an investment in a person, real estate or asset domiciled in a foreign jurisdiction. An investment shall not be deemed to be foreign if the issuing person, qualified primary credit source or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless: (i) The issuing person is a shell business entity; and (ii) The investment is not assumed, accepted, guaranteed or insured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction; (B) For purposes of subdivision (16)(A): (i) "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; (ii) "Qualified primary credit source" means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; and (iii) "Shell business entity" means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned or previously owned by a person domiciled in a foreign jurisdiction;
(A) "Foreign investment" means an investment in a foreign jurisdiction, or an investment in a person, real estate or asset domiciled in a foreign jurisdiction. An investment shall not be deemed to be foreign if the issuing person, qualified primary credit source or qualified guarantor is a domestic jurisdiction or a person domiciled in a domestic jurisdiction, unless: (i) The issuing person is a shell business entity; and (ii) The investment is not assumed, accepted, guaranteed or insured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction;
(i) The issuing person is a shell business entity; and
(ii) The investment is not assumed, accepted, guaranteed or insured or otherwise backed by a domestic jurisdiction or a person, that is not a shell business entity, domiciled in a domestic jurisdiction;
(B) For purposes of subdivision (16)(A): (i) "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; (ii) "Qualified primary credit source" means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; and (iii) "Shell business entity" means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned or previously owned by a person domiciled in a foreign jurisdiction;
(i) "Qualified guarantor" means a guarantor against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction;
(ii) "Qualified primary credit source" means the credit source to which an insurer looks for payment as to an investment and against which an insurer has a direct claim for full and timely payment, evidenced by a contractual right for which an enforcement action can be brought in a domestic jurisdiction; and
(iii) "Shell business entity" means a business entity having no economic substance, except as a vehicle for owning interests in assets issued, owned or previously owned by a person domiciled in a foreign jurisdiction;
(17) "Foreign jurisdiction" means: (A) A jurisdiction other than a domestic jurisdiction; or (B) A commonwealth, territory or possession of the United States;
(A) A jurisdiction other than a domestic jurisdiction; or
(B) A commonwealth, territory or possession of the United States;
(18) "Forward" means an agreement, other than a future, to make or take delivery in the future of one (1) or more underlying interests, or effect a cash settlement, based on the actual or expected price, level, performance or value of the underlying interests, but does not mean or include spot transactions effected within customary settlement periods, when-issued purchases or other similar cash market transactions;
(19) "Future" means an agreement, traded on a futures exchange, to make or take delivery of, or effect a cash settlement based on the actual or expected price, level, performance or value of, one (1) or more underlying interests;
(20) "Futures exchange" means a foreign or domestic exchange, contract market or board of trade on which trading in futures is conducted and, in the United States, that has been authorized for such trading by the commodities futures trading commission or any successor of the commodities futures trading commission;
(21) "Hedging transaction" means a derivative transaction that is entered into and maintained to manage: (A) The risk of a change in the value, yield, price, cash flow or quantity of assets or liabilities, or a portfolio of assets and/or liabilities, that the insurer has acquired or incurred or anticipates acquiring or incurring; or (B) The currency exchange rate risk related to assets or liabilities, or a portfolio of assets and/or liabilities, that an insurer has acquired or incurred or anticipates acquiring or incurring;
(A) The risk of a change in the value, yield, price, cash flow or quantity of assets or liabilities, or a portfolio of assets and/or liabilities, that the insurer has acquired or incurred or anticipates acquiring or incurring; or
(B) The currency exchange rate risk related to assets or liabilities, or a portfolio of assets and/or liabilities, that an insurer has acquired or incurred or anticipates acquiring or incurring;
(22) "Income generation transaction" means a derivative transaction which is entered into to generate income. A derivative transaction which is entered into as a hedging transaction or a replication transaction shall not be considered an income generation transaction;
(23) "Investment practices" means transactions of the types described in § 56-3-303(a)(10), (15), (18) and (21) ;
(24) "Market value" means the price for the security or derivative instrument obtained from a generally recognized source or the most recent quotation from the source or, to the extent no generally recognized source exists, the price for the security or derivative instrument as determined pursuant to the terms of the instrument or in good faith by the insurer as can be reasonably demonstrated to the commissioner upon request, plus accrued but unpaid income on the security or derivative instrument to the extent not included in the price as of the date;
(25) "NAIC" means the National Association of Insurance Commissioners;
(26) "NAIC-SVO" means the securities valuation office of the National Association of Insurance Commissioners;
(27) (A) "Net earnings available for fixed charges" means net income determined on either a consolidated or an unconsolidated basis after allowance for operating and maintenance expenses, depreciation and depletion, and taxes, other than federal and state income taxes, but excluding extraordinary nonrecurring items of income or expense appearing in the regular financial statements of the issuing, assuming or guaranteeing business entity; (B) In applying tests of "net earnings available for fixed charges" to an issuing, assuming or guaranteeing business entity or a lessee, whether or not in legal existence during the whole of the test period, that has at or prior to the date of investment by the insurance company acquired the assets of any other business entity by purchase, merger, consolidation or otherwise substantially as an entirety, net earnings available for fixed charges of the predecessor or constituent business entity for such portion of the test period as preceded acquisition may be included in the net earnings of the issuing, assuming or guaranteeing business entity or the lessee, in accordance with the consolidated earnings statement covering the period. The requirements imposed by § 56-3-303(a)(2) and (13) upon the issuing, assuming or guaranteeing business entity of the lessee are deemed to have been met if, at the time the investment is made, a business entity that meets the requirements has guaranteed the indebtedness or has otherwise become obligated to pay amounts that are applicable to the payment of and sufficient to discharge the principal of and interest on the indebtedness in accordance with its terms; provided, that in determining whether the requirements have been met, the pro forma annual interest on the indebtedness is included in the fixed charges of the business entity applicable to the test period in question;
(A) "Net earnings available for fixed charges" means net income determined on either a consolidated or an unconsolidated basis after allowance for operating and maintenance expenses, depreciation and depletion, and taxes, other than federal and state income taxes, but excluding extraordinary nonrecurring items of income or expense appearing in the regular financial statements of the issuing, assuming or guaranteeing business entity;
(B) In applying tests of "net earnings available for fixed charges" to an issuing, assuming or guaranteeing business entity or a lessee, whether or not in legal existence during the whole of the test period, that has at or prior to the date of investment by the insurance company acquired the assets of any other business entity by purchase, merger, consolidation or otherwise substantially as an entirety, net earnings available for fixed charges of the predecessor or constituent business entity for such portion of the test period as preceded acquisition may be included in the net earnings of the issuing, assuming or guaranteeing business entity or the lessee, in accordance with the consolidated earnings statement covering the period. The requirements imposed by § 56-3-303(a)(2) and (13) upon the issuing, assuming or guaranteeing business entity of the lessee are deemed to have been met if, at the time the investment is made, a business entity that meets the requirements has guaranteed the indebtedness or has otherwise become obligated to pay amounts that are applicable to the payment of and sufficient to discharge the principal of and interest on the indebtedness in accordance with its terms; provided, that in determining whether the requirements have been met, the pro forma annual interest on the indebtedness is included in the fixed charges of the business entity applicable to the test period in question;
(28) "Net earnings available for fixed charges and dividends" are determined in the same manner as net earnings available for fixed charges, but after allowance for federal and state income taxes;
(29) "Obligation" means a note, bond, debenture, trust certificate, equipment trust certificate, production payment, negotiable bank certificate of deposit, bankers' acceptance, asset-backed security, NAIC-SVO credit tenant loan, loan secured by financing a net lease or net leases, and other evidence of indebtedness for the payment of money, or participations, certificates or other evidences of an interest in any of the obligations listed in this subdivision (29), whether constituting a general obligation of the issuer or payable only out of certain revenues or certain funds pledged or otherwise dedicated for payment;
(30) "Option" means an agreement giving the buyer the right to buy or receive, known as a "call option", sell or deliver, known as a "put option", enter into, extend or terminate or effect a cash settlement based on the actual or expected price, spread, level, performance or value of one (1) or more underlying interests;
(31) "Over-the-counter derivative instrument" means a derivative instrument entered into with a business entity, other than through a securities exchange, futures exchange, or cleared through a qualified clearinghouse;
(32) "Person" means an individual, a business entity, a multilateral development bank or a government or quasi-governmental body, such as a political subdivision or a government sponsored enterprise;
(33) "Potential exposure" means: (A) As to a futures position, the amount of initial margin required for that position; or (B) As to swaps, collars and forwards, one half percent (0.5%) times the notional amount times the square root of the remaining years to maturity;
(A) As to a futures position, the amount of initial margin required for that position; or
(B) As to swaps, collars and forwards, one half percent (0.5%) times the notional amount times the square root of the remaining years to maturity;
(34) "Preferred dividend requirements" means dividends at the maximum prescribed rate on all preferred stock of the same class as that being acquired by the insurance company and on all stock ranking as to dividends on a parity with the dividends or prior to the dividends, whether or not the dividends are cumulative;
(35) "Qualified clearinghouse" means a clearinghouse subject to the rules of a securities exchange or a futures exchange that provides clearing services, including acting as a counterparty to each of the parties to a transaction such that the parties no longer have credit risk to each other;
(36) "Replication transaction" means a derivative transaction or combination of derivative transactions effected either separately or in conjunction with cash market investments included in the insurer's investment portfolio in order to replicate the risks and returns of another authorized transaction, investment or instrument and/or operate as a substitute for cash market transactions. A derivative transaction entered into by the insurer as a hedging transaction shall not be considered a replication transaction;
(37) "Repurchase transaction" means a transaction in which an insurer purchases securities from a business entity that is obligated to repurchase the purchased securities or equivalent securities from the insurer at a specified price, either within a specified period of time or upon demand;
(38) "Reverse repurchase transaction" means a transaction in which an insurer sells securities to a business entity and is obligated to repurchase the sold securities or equivalent securities from the business entity at a specified price, either within a specified period of time or upon demand;
(39) "Securities exchange" means: (A) An exchange registered as a national securities exchange or a securities market registered under the Securities Exchange Act of 1934 ( 15 U.S.C. § 78 et seq.); (B) Private Offerings Resales and Trading through Automated Linkages (PORTAL); or (C) A designated offshore securities market as defined in Securities Exchange Commission Regulation S, 17 CFR part 230;
(A) An exchange registered as a national securities exchange or a securities market registered under the Securities Exchange Act of 1934 ( 15 U.S.C. § 78 et seq.);
(B) Private Offerings Resales and Trading through Automated Linkages (PORTAL); or
(C) A designated offshore securities market as defined in Securities Exchange Commission Regulation S, 17 CFR part 230;
(40) "Securities lending transaction" means a transaction in which securities are loaned by an insurer to a business entity that is obligated to return the loaned securities or equivalent securities to the insurer, either within a specified period of time or upon demand;
(41) "State" includes the several states, the District of Columbia, the Commonwealth of Puerto Rico and the possessions of the United States;
(42) "SVO Rating" means the numerical ranking designation of one (1) through six (6) assigned to securities as determined by the NAIC-SVO;
(43) "Swap" means an agreement to exchange or to net payments at one (1) or more times based on the actual or expected price, yield, level, performance or value of one (1) or more underlying interests;
(44) "Swaption" means an option to purchase or sell a swap at a given price and time or at a series of prices and times. "Swaption" does not mean a swap with an embedded option;
(45) "Underlying interest" means the assets, liabilities or other interests, or a combination of assets, liabilities or other interests, underlying a derivative instrument, such as any one (1) or more securities, currencies, rates, indices, commodities or derivative instruments; and
(46) "Warrant" means an instrument that gives the holder the right to purchase or sell the underlying interest at a given price and time or at a series of prices and times outlined in the warrant agreement.
Acts 1907, ch. 458, § 2; Shan., § 3348a29; Code 1932, § 6204; Acts 1935, ch. 105, § 1; 1937, ch. 76, § 1; 1939, ch. 121, § 1; 1945, ch. 106, §§ 1, 2; 1947, ch. 120, § 1; C. Supp. 1950, § 6204; Acts 1951, ch. 77, § 1; T.C.A. (orig. ed.), § 56-217; Acts 1961, ch. 224, § 1; 1961, ch. 229, § 1; 1965, ch. 63, § 1; modified; T.C.A., § 56-306; Acts 1995, ch. 363, § 10; 1998, ch. 678, § 2.
Tenn. Code Ann. § 56-25-606 — TN Code / Title 56 / Chapter 25 / Section 56-25-606
Injunction - Liquidation or receivership of domestic society
Status: in_force

(a) When the commissioner, upon investigation, finds that a domestic society: (1) Has exceeded its powers; (2) Has failed to comply with any provision of this chapter; (3) Is not fulfilling its contracts in good faith; (4) Has a membership of less than four hundred (400) after an existence of one (1) year or more; or (5) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business; the commissioner shall notify the society of such deficiency or deficiencies and state in writing the reasons for the dissatisfaction. The commissioner shall at once issue a written notice to the society requiring that the deficiency or deficiencies that exist be corrected. After the notice, the society shall have a thirty-day period in which to comply with the commissioner's request for correction, and if the society fails to comply, the commissioner shall notify the society of the findings of noncompliance and require the society to show cause, on a date named, why it should not be enjoined from carrying on any business until the violation complained of has been corrected, or why an action in quo warranto should not be commenced against the society. (b) If on the date the society does not present good and sufficient reasons why it should not be so enjoined or why the action should not be commenced, the commissioner may present the facts relating thereto to the attorney general and reporter, who shall, if the attorney general and reporter deems the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto. (c) The court shall thereupon notify the officers of the society of the hearing. If, after a full hearing, it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order. No society so enjoined shall have the authority to do business until: (1) The commissioner finds that the violation complained of has been corrected; (2) The costs of the action have been paid by the society if the court finds that the society was in default as charged; (3) The court has dissolved its injunction; and (4) The commissioner has reinstated the certificate of authority. (d) If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled to them. (e) No action under this section shall be recognized in any court of this state unless brought by the attorney general and reporter upon request of the commissioner. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the commissioner as the receiver. (f) The provisions of this section relating to hearing by the commissioner, action by the attorney general and reporter at the request of the commissioner, hearing by the court, injunction and receivership shall be applicable to a society which voluntarily determines to discontinue business. Acts 1990, ch. 703, § 1.
(a) When the commissioner, upon investigation, finds that a domestic society: (1) Has exceeded its powers; (2) Has failed to comply with any provision of this chapter; (3) Is not fulfilling its contracts in good faith; (4) Has a membership of less than four hundred (400) after an existence of one (1) year or more; or (5) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business; the commissioner shall notify the society of such deficiency or deficiencies and state in writing the reasons for the dissatisfaction. The commissioner shall at once issue a written notice to the society requiring that the deficiency or deficiencies that exist be corrected. After the notice, the society shall have a thirty-day period in which to comply with the commissioner's request for correction, and if the society fails to comply, the commissioner shall notify the society of the findings of noncompliance and require the society to show cause, on a date named, why it should not be enjoined from carrying on any business until the violation complained of has been corrected, or why an action in quo warranto should not be commenced against the society.
(1) Has exceeded its powers;
(2) Has failed to comply with any provision of this chapter;
(3) Is not fulfilling its contracts in good faith;
(4) Has a membership of less than four hundred (400) after an existence of one (1) year or more; or
(5) Is conducting business fraudulently or in a manner hazardous to its members, creditors, the public or the business; the commissioner shall notify the society of such deficiency or deficiencies and state in writing the reasons for the dissatisfaction. The commissioner shall at once issue a written notice to the society requiring that the deficiency or deficiencies that exist be corrected. After the notice, the society shall have a thirty-day period in which to comply with the commissioner's request for correction, and if the society fails to comply, the commissioner shall notify the society of the findings of noncompliance and require the society to show cause, on a date named, why it should not be enjoined from carrying on any business until the violation complained of has been corrected, or why an action in quo warranto should not be commenced against the society.
the commissioner shall notify the society of such deficiency or deficiencies and state in writing the reasons for the dissatisfaction. The commissioner shall at once issue a written notice to the society requiring that the deficiency or deficiencies that exist be corrected. After the notice, the society shall have a thirty-day period in which to comply with the commissioner's request for correction, and if the society fails to comply, the commissioner shall notify the society of the findings of noncompliance and require the society to show cause, on a date named, why it should not be enjoined from carrying on any business until the violation complained of has been corrected, or why an action in quo warranto should not be commenced against the society.
(b) If on the date the society does not present good and sufficient reasons why it should not be so enjoined or why the action should not be commenced, the commissioner may present the facts relating thereto to the attorney general and reporter, who shall, if the attorney general and reporter deems the circumstances warrant, commence an action to enjoin the society from transacting business or in quo warranto.
(c) The court shall thereupon notify the officers of the society of the hearing. If, after a full hearing, it appears that the society should be so enjoined or liquidated or a receiver appointed, the court shall enter the necessary order. No society so enjoined shall have the authority to do business until: (1) The commissioner finds that the violation complained of has been corrected; (2) The costs of the action have been paid by the society if the court finds that the society was in default as charged; (3) The court has dissolved its injunction; and (4) The commissioner has reinstated the certificate of authority.
(1) The commissioner finds that the violation complained of has been corrected;
(2) The costs of the action have been paid by the society if the court finds that the society was in default as charged;
(3) The court has dissolved its injunction; and
(4) The commissioner has reinstated the certificate of authority.
(d) If the court orders the society liquidated, it shall be enjoined from carrying on any further business, whereupon the receiver of the society shall proceed at once to take possession of the books, papers, money and other assets of the society and, under the direction of the court, proceed forthwith to close the affairs of the society and to distribute its funds to those entitled to them.
(e) No action under this section shall be recognized in any court of this state unless brought by the attorney general and reporter upon request of the commissioner. Whenever a receiver is to be appointed for a domestic society, the court shall appoint the commissioner as the receiver.
(f) The provisions of this section relating to hearing by the commissioner, action by the attorney general and reporter at the request of the commissioner, hearing by the court, injunction and receivership shall be applicable to a society which voluntarily determines to discontinue business.
Acts 1990, ch. 703, § 1.
Tenn. Code Ann. § 56-26-108 — TN Code / Title 56 / Chapter 26 / Section 56-26-108
Standard form - Required provisions
Status: in_force

Except as provided in § 56-26-110 , each such policy delivered or issued for delivery to any person in this state shall contain the provisions specified in this section in the substance of the words in which the same appear in this section; provided, that the insurer may, at its option, substitute for one (1) or more of the provisions corresponding provisions of different wording approved by the commissioner that are in each instance not less favorable in any respect to the insured or the beneficiary. The provisions shall be preceded individually by the caption appearing in this section or, at the option of the insurer, by the appropriate individual or group captions or subcaptions as the commissioner may approve. (1) Entire Contract - Changes. This policy, including the endorsements and attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless the approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions. (2) Time Limit on Certain Defenses. (A) (i) After two (2) years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for this policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of the two-year period. (ii) The policy provision in subdivision (2)(A)(i) shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during the initial two-year period, nor to limit the application of § 56-26-109(1)-(5) in the event of misstatement with respect to age or occupation or other insurance. (B) A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium: (i) Until at least age fifty (50); or (ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue; may contain in lieu of the provision in subdivision (2)(A) the following provision, from which the clause in parentheses may be omitted at the insurer's option, under the caption "INCONTESTABLE":After this policy has been in force for a period of two (2) years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application. (C) No claim for loss incurred or disability, as defined in the policy, commencing after two (2) years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy. (3) Grace Period. (A) A grace period of ______________ (insert a number not less than "7" for weekly premium policies, "10" for monthly premium policies and "31" for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. (B) A policy that contains a cancellation provision may add, at the end of the provision in subdivision (3)(A), "subject to the right of the insurer to cancel in accordance with the cancellation provision hereof." (C) A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the provision in subdivision (3)(A), "unless not less than five (5) days prior to the premium due date the insurer has delivered to the insured or has mailed to the insured's last address as shown by the records of the insurer written notice of its intention not to renew this policy, beyond the period for which the premium has been accepted." (4) Reinstatement. (A) If any renewal premium is not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept the premium without requiring in connection therewith an application for reinstatement shall reinstate the policy; provided, that if the insurer or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of the application by the insurer or, lacking the approval, upon the forty-fifth day following the date of the conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of the application. The reinstated policy shall cover only loss resulting from the accidental injury as may be sustained after the date of reinstatement and loss due to the sickness as may begin more than ten (10) days after the date. In all other respects, the insured and the insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty (60) days prior to the date of reinstatement. (B) The last sentence of subdivision (4)(A) may be omitted from any policy that the insured has the right to continue in force, subject to its terms by the timely payment of premium: (i) Until at least fifty (50) years of age; or (ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue. (5) Notice of Claim. (A) Written notice of claim must be given to the insurer within twenty (20) days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ______________ (insert the location of the office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. (B) In a policy providing a loss-of-time benefit that may be payable for at least two (2) years, an insurer may at its option insert the following between the first and second sentences of subdivision (5)(A): "Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two (2) years, shall, at least once in every six (6) months after having given notice of claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of six (6) months following any filing of proof by the insured or any payment by the insurer on account of the claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of the notice shall not impair the insured's right to any indemnity that would otherwise have accrued during the period of six (6) months preceding the date on which the notice is actually given." (6) Claim Forms. The insurer, upon receipt of a notice of claim, will furnish to the claimant the forms as are usually furnished by it for filing proofs of loss. If the forms are not furnished within fifteen (15) days after the giving of the notice, the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made. (7) Proofs of Loss. Written proof of loss must be furnished to the insurer at its office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within ninety (90) days after the termination of the period for which the insurer is liable and in case of claim for any other loss within ninety (90) days after the date of the loss. Failure to furnish the proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within the time; provided, that the proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one (1) year from the time proof is otherwise required. (8) Time for Payment of Claims. Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of the loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic amounts will be paid ______________ (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof. (9) Payment of Claims. (A) Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting the payment that may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, the indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to the beneficiary or to the estate. All other indemnities will be payable to the insured. (B) The following provisions, or either of them, may be included with the provision in subdivision (9)(A) at the option of the insurer: (i) "If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay the indemnity, up to an amount not exceeding $ ______________ (insert an amount which shall not exceed one thousand dollars ($1,000)), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of the payment"; (ii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the hospital or person rendering the services; but it is not required that the service be rendered by a particular hospital or person"; and (iii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of the supply of medicines, drugs, medical supplies and equipment, and other health care supplies may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the firm or person rendering the services; but it is not required that the service be rendered by a particular firm or person. If the insured allows this procedure, the firm or person supplying the drugs, medicines, or supplies shall have a lien on that portion of the policy indemnities attributable to the drugs, medicines, or services." (10) Physical Examinations and Autopsy. The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law. (11) Legal Actions. No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty (60) days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three (3) years after the time written proof of loss is required to be furnished. (12) Change of Beneficiary. Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured, and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy. The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option. Acts 1955, ch. 4, § 4; 1976, ch. 397, § 3; T.C.A., § 56-3308; Acts 1981, ch. 415, § 12; 1982, ch. 744, § 1.
Except as provided in § 56-26-110 , each such policy delivered or issued for delivery to any person in this state shall contain the provisions specified in this section in the substance of the words in which the same appear in this section; provided, that the insurer may, at its option, substitute for one (1) or more of the provisions corresponding provisions of different wording approved by the commissioner that are in each instance not less favorable in any respect to the insured or the beneficiary. The provisions shall be preceded individually by the caption appearing in this section or, at the option of the insurer, by the appropriate individual or group captions or subcaptions as the commissioner may approve.
(1) Entire Contract - Changes. This policy, including the endorsements and attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless the approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.
(2) Time Limit on Certain Defenses. (A) (i) After two (2) years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for this policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of the two-year period. (ii) The policy provision in subdivision (2)(A)(i) shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during the initial two-year period, nor to limit the application of § 56-26-109(1)-(5) in the event of misstatement with respect to age or occupation or other insurance. (B) A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium: (i) Until at least age fifty (50); or (ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue; may contain in lieu of the provision in subdivision (2)(A) the following provision, from which the clause in parentheses may be omitted at the insurer's option, under the caption "INCONTESTABLE":After this policy has been in force for a period of two (2) years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application. (C) No claim for loss incurred or disability, as defined in the policy, commencing after two (2) years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy.
(A) (i) After two (2) years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for this policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of the two-year period. (ii) The policy provision in subdivision (2)(A)(i) shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during the initial two-year period, nor to limit the application of § 56-26-109(1)-(5) in the event of misstatement with respect to age or occupation or other insurance.
(i) After two (2) years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for this policy shall be used to void the policy or to deny a claim for loss incurred or disability, as defined in the policy, commencing after the expiration of the two-year period.
(ii) The policy provision in subdivision (2)(A)(i) shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during the initial two-year period, nor to limit the application of § 56-26-109(1)-(5) in the event of misstatement with respect to age or occupation or other insurance.
(B) A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium: (i) Until at least age fifty (50); or (ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue; may contain in lieu of the provision in subdivision (2)(A) the following provision, from which the clause in parentheses may be omitted at the insurer's option, under the caption "INCONTESTABLE":After this policy has been in force for a period of two (2) years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.
(i) Until at least age fifty (50); or
(ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue; may contain in lieu of the provision in subdivision (2)(A) the following provision, from which the clause in parentheses may be omitted at the insurer's option, under the caption "INCONTESTABLE":After this policy has been in force for a period of two (2) years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.
may contain in lieu of the provision in subdivision (2)(A) the following provision, from which the clause in parentheses may be omitted at the insurer's option, under the caption "INCONTESTABLE":After this policy has been in force for a period of two (2) years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.
(C) No claim for loss incurred or disability, as defined in the policy, commencing after two (2) years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy.
(3) Grace Period. (A) A grace period of ______________ (insert a number not less than "7" for weekly premium policies, "10" for monthly premium policies and "31" for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. (B) A policy that contains a cancellation provision may add, at the end of the provision in subdivision (3)(A), "subject to the right of the insurer to cancel in accordance with the cancellation provision hereof." (C) A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the provision in subdivision (3)(A), "unless not less than five (5) days prior to the premium due date the insurer has delivered to the insured or has mailed to the insured's last address as shown by the records of the insurer written notice of its intention not to renew this policy, beyond the period for which the premium has been accepted."
(A) A grace period of ______________ (insert a number not less than "7" for weekly premium policies, "10" for monthly premium policies and "31" for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force.
(B) A policy that contains a cancellation provision may add, at the end of the provision in subdivision (3)(A), "subject to the right of the insurer to cancel in accordance with the cancellation provision hereof."
(C) A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the provision in subdivision (3)(A), "unless not less than five (5) days prior to the premium due date the insurer has delivered to the insured or has mailed to the insured's last address as shown by the records of the insurer written notice of its intention not to renew this policy, beyond the period for which the premium has been accepted."
(4) Reinstatement. (A) If any renewal premium is not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept the premium without requiring in connection therewith an application for reinstatement shall reinstate the policy; provided, that if the insurer or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of the application by the insurer or, lacking the approval, upon the forty-fifth day following the date of the conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of the application. The reinstated policy shall cover only loss resulting from the accidental injury as may be sustained after the date of reinstatement and loss due to the sickness as may begin more than ten (10) days after the date. In all other respects, the insured and the insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty (60) days prior to the date of reinstatement. (B) The last sentence of subdivision (4)(A) may be omitted from any policy that the insured has the right to continue in force, subject to its terms by the timely payment of premium: (i) Until at least fifty (50) years of age; or (ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue.
(A) If any renewal premium is not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept the premium without requiring in connection therewith an application for reinstatement shall reinstate the policy; provided, that if the insurer or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of the application by the insurer or, lacking the approval, upon the forty-fifth day following the date of the conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of the application. The reinstated policy shall cover only loss resulting from the accidental injury as may be sustained after the date of reinstatement and loss due to the sickness as may begin more than ten (10) days after the date. In all other respects, the insured and the insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty (60) days prior to the date of reinstatement.
(B) The last sentence of subdivision (4)(A) may be omitted from any policy that the insured has the right to continue in force, subject to its terms by the timely payment of premium: (i) Until at least fifty (50) years of age; or (ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue.
(i) Until at least fifty (50) years of age; or
(ii) In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue.
(5) Notice of Claim. (A) Written notice of claim must be given to the insurer within twenty (20) days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ______________ (insert the location of the office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. (B) In a policy providing a loss-of-time benefit that may be payable for at least two (2) years, an insurer may at its option insert the following between the first and second sentences of subdivision (5)(A): "Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two (2) years, shall, at least once in every six (6) months after having given notice of claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of six (6) months following any filing of proof by the insured or any payment by the insurer on account of the claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of the notice shall not impair the insured's right to any indemnity that would otherwise have accrued during the period of six (6) months preceding the date on which the notice is actually given."
(A) Written notice of claim must be given to the insurer within twenty (20) days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ______________ (insert the location of the office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer.
(B) In a policy providing a loss-of-time benefit that may be payable for at least two (2) years, an insurer may at its option insert the following between the first and second sentences of subdivision (5)(A): "Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two (2) years, shall, at least once in every six (6) months after having given notice of claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of six (6) months following any filing of proof by the insured or any payment by the insurer on account of the claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of the notice shall not impair the insured's right to any indemnity that would otherwise have accrued during the period of six (6) months preceding the date on which the notice is actually given."
"Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two (2) years, shall, at least once in every six (6) months after having given notice of claim, give to the insurer notice of continuance of the disability, except in the event of legal incapacity. The period of six (6) months following any filing of proof by the insured or any payment by the insurer on account of the claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of the notice shall not impair the insured's right to any indemnity that would otherwise have accrued during the period of six (6) months preceding the date on which the notice is actually given."
(6) Claim Forms. The insurer, upon receipt of a notice of claim, will furnish to the claimant the forms as are usually furnished by it for filing proofs of loss. If the forms are not furnished within fifteen (15) days after the giving of the notice, the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made.
(7) Proofs of Loss. Written proof of loss must be furnished to the insurer at its office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within ninety (90) days after the termination of the period for which the insurer is liable and in case of claim for any other loss within ninety (90) days after the date of the loss. Failure to furnish the proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within the time; provided, that the proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one (1) year from the time proof is otherwise required.
(8) Time for Payment of Claims. Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of the loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic amounts will be paid ______________ (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof.
(9) Payment of Claims. (A) Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting the payment that may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, the indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to the beneficiary or to the estate. All other indemnities will be payable to the insured. (B) The following provisions, or either of them, may be included with the provision in subdivision (9)(A) at the option of the insurer: (i) "If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay the indemnity, up to an amount not exceeding $ ______________ (insert an amount which shall not exceed one thousand dollars ($1,000)), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of the payment"; (ii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the hospital or person rendering the services; but it is not required that the service be rendered by a particular hospital or person"; and (iii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of the supply of medicines, drugs, medical supplies and equipment, and other health care supplies may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the firm or person rendering the services; but it is not required that the service be rendered by a particular firm or person. If the insured allows this procedure, the firm or person supplying the drugs, medicines, or supplies shall have a lien on that portion of the policy indemnities attributable to the drugs, medicines, or services."
(A) Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting the payment that may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, the indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to the beneficiary or to the estate. All other indemnities will be payable to the insured.
(B) The following provisions, or either of them, may be included with the provision in subdivision (9)(A) at the option of the insurer: (i) "If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay the indemnity, up to an amount not exceeding $ ______________ (insert an amount which shall not exceed one thousand dollars ($1,000)), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of the payment"; (ii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the hospital or person rendering the services; but it is not required that the service be rendered by a particular hospital or person"; and (iii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of the supply of medicines, drugs, medical supplies and equipment, and other health care supplies may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the firm or person rendering the services; but it is not required that the service be rendered by a particular firm or person. If the insured allows this procedure, the firm or person supplying the drugs, medicines, or supplies shall have a lien on that portion of the policy indemnities attributable to the drugs, medicines, or services."
(i) "If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay the indemnity, up to an amount not exceeding $ ______________ (insert an amount which shall not exceed one thousand dollars ($1,000)), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of the payment";
(ii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the hospital or person rendering the services; but it is not required that the service be rendered by a particular hospital or person"; and
(iii) "Subject to any written direction of the insured in the application or otherwise, all or a portion of any indemnities provided by this policy on account of the supply of medicines, drugs, medical supplies and equipment, and other health care supplies may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proof of the loss, be paid directly to the firm or person rendering the services; but it is not required that the service be rendered by a particular firm or person. If the insured allows this procedure, the firm or person supplying the drugs, medicines, or supplies shall have a lien on that portion of the policy indemnities attributable to the drugs, medicines, or services."
(10) Physical Examinations and Autopsy. The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law.
(11) Legal Actions. No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty (60) days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three (3) years after the time written proof of loss is required to be furnished.
(12) Change of Beneficiary. Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured, and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy. The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.
Acts 1955, ch. 4, § 4; 1976, ch. 397, § 3; T.C.A., § 56-3308; Acts 1981, ch. 415, § 12; 1982, ch. 744, § 1.
Tenn. Code Ann. § 56-6-601 — TN Code / Title 56 / Chapter 6 / Section 56-6-601
Short title
Status: in_force

This part shall be known and may be cited as the "Business Transacted with Producer Controlled Property/Casualty Insurer Act." Acts 1991, ch. 142, § 8.
This part shall be known and may be cited as the "Business Transacted with Producer Controlled Property/Casualty Insurer Act."
Acts 1991, ch. 142, § 8.
Tenn. Code Ann. § 56-9-330 — TN Code / Title 56 / Chapter 9 / Section 56-9-330
Distribution of claims - Priority
Status: in_force

(a) The priority of distribution of claims from the insurer's estate shall be in accordance with the order in which each class of claims is set forth in this section. Every claim in each class shall be paid in full or adequate funds retained for the payment before the members of the next class receive any payment. No subclasses shall be established within any class. The order of distribution of claims is: (1) Class 1. The costs and expenses of administration during rehabilitation and liquidation, including, but not limited to, the following: (A) The actual and necessary costs of preserving or recovering the assets of the insurer; (B) Compensation for all authorized services rendered in the rehabilitation and liquidation; (C) Any necessary filing fees; (D) The fees and mileage payable to witnesses; (E) Authorized reasonable attorney's fees and other professional services rendered in the rehabilitation and liquidation; and (F) The reasonable expenses of a guaranty association or foreign guaranty association for unallocated loss adjustment expenses; (2) Class 2. All claims under policies, including the claims of the federal or any state or local government for losses incurred (loss claims), including third party claims and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and policies and annuities, which, for purposes of this section only, shall include guaranteed investment contracts and funding agreements, whether for death proceeds, annuity proceeds, or investment values shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class, other than benefits or advantages recovered or recoverable in the discharge of familial obligation of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment by an employer to the employer's employee shall be treated as a gratuity; (3) Class 3. Claims of the federal government, including those that otherwise would be within Class 5, but not including claims that are within Class 2; (4) Class 4. Reasonable compensation to employees for services performed to the extent that they do not exceed two (2) months of monetary compensation and represent payment for services performed within one (1) year before the filing of the petition for liquidation or, if rehabilitation preceded liquidation, within one (1) year before the filing of the petition for rehabilitation. Principal officers and directors are not entitled to the benefit of this priority except as otherwise approved by the liquidator and the court. The priority is in lieu of any other similar priority that may be authorized by law as to wages or compensation of employees; (5) Class 5. Claims under nonassessable policies for unearned premium or other premium refunds, claims of general creditors, including claims of ceding and assuming companies in their capacity as such, and every claim arising under an unallocated annuity contract, except unallocated annuity contracts and defined government contribution plans qualified under § 403(b) of the Internal Revenue Code ( 26 U.S.C. § 403(b) ), issued in connection with a separate account agreement providing, in effect, that the assets in the separate account shall not be chargeable with liabilities arising out of any other business of the insurer, to the extent that the claim is not satisfied and fully discharged out of the assets of the separate account equal to the reserves maintained in the account for the agreement; (6) Class 6. Claims of any state or local government except those under Class 2. Claims, including those of any state and local governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of the claims shall be postponed to the class of claims under subdivision (a)(9); (7) Class 7. Claims filed late or any other claims other than claims under subdivisions (a)(8) and (9); (8) Class 8. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law; and (9) Class 9. The claims of shareholders or other owners in their capacity as shareholders. (b) If any classification or priority provided for in subsection (a), or the application of the classification or priority to any person or circumstances, is held to be unconstitutional or otherwise invalid, the invalidity shall not affect the remaining portions or applications of subsection (a) that can be given effect without the invalid portion or application. Acts 1991, ch. 142, § 4; 1993, ch. 253, § 21; 1997 , ch. 188, §§ 1 - 9; 2001, ch. 91, § 1.
(a) The priority of distribution of claims from the insurer's estate shall be in accordance with the order in which each class of claims is set forth in this section. Every claim in each class shall be paid in full or adequate funds retained for the payment before the members of the next class receive any payment. No subclasses shall be established within any class. The order of distribution of claims is: (1) Class 1. The costs and expenses of administration during rehabilitation and liquidation, including, but not limited to, the following: (A) The actual and necessary costs of preserving or recovering the assets of the insurer; (B) Compensation for all authorized services rendered in the rehabilitation and liquidation; (C) Any necessary filing fees; (D) The fees and mileage payable to witnesses; (E) Authorized reasonable attorney's fees and other professional services rendered in the rehabilitation and liquidation; and (F) The reasonable expenses of a guaranty association or foreign guaranty association for unallocated loss adjustment expenses; (2) Class 2. All claims under policies, including the claims of the federal or any state or local government for losses incurred (loss claims), including third party claims and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and policies and annuities, which, for purposes of this section only, shall include guaranteed investment contracts and funding agreements, whether for death proceeds, annuity proceeds, or investment values shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class, other than benefits or advantages recovered or recoverable in the discharge of familial obligation of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment by an employer to the employer's employee shall be treated as a gratuity; (3) Class 3. Claims of the federal government, including those that otherwise would be within Class 5, but not including claims that are within Class 2; (4) Class 4. Reasonable compensation to employees for services performed to the extent that they do not exceed two (2) months of monetary compensation and represent payment for services performed within one (1) year before the filing of the petition for liquidation or, if rehabilitation preceded liquidation, within one (1) year before the filing of the petition for rehabilitation. Principal officers and directors are not entitled to the benefit of this priority except as otherwise approved by the liquidator and the court. The priority is in lieu of any other similar priority that may be authorized by law as to wages or compensation of employees; (5) Class 5. Claims under nonassessable policies for unearned premium or other premium refunds, claims of general creditors, including claims of ceding and assuming companies in their capacity as such, and every claim arising under an unallocated annuity contract, except unallocated annuity contracts and defined government contribution plans qualified under § 403(b) of the Internal Revenue Code ( 26 U.S.C. § 403(b) ), issued in connection with a separate account agreement providing, in effect, that the assets in the separate account shall not be chargeable with liabilities arising out of any other business of the insurer, to the extent that the claim is not satisfied and fully discharged out of the assets of the separate account equal to the reserves maintained in the account for the agreement; (6) Class 6. Claims of any state or local government except those under Class 2. Claims, including those of any state and local governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of the claims shall be postponed to the class of claims under subdivision (a)(9); (7) Class 7. Claims filed late or any other claims other than claims under subdivisions (a)(8) and (9); (8) Class 8. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law; and (9) Class 9. The claims of shareholders or other owners in their capacity as shareholders.
(1) Class 1. The costs and expenses of administration during rehabilitation and liquidation, including, but not limited to, the following: (A) The actual and necessary costs of preserving or recovering the assets of the insurer; (B) Compensation for all authorized services rendered in the rehabilitation and liquidation; (C) Any necessary filing fees; (D) The fees and mileage payable to witnesses; (E) Authorized reasonable attorney's fees and other professional services rendered in the rehabilitation and liquidation; and (F) The reasonable expenses of a guaranty association or foreign guaranty association for unallocated loss adjustment expenses;
(A) The actual and necessary costs of preserving or recovering the assets of the insurer;
(B) Compensation for all authorized services rendered in the rehabilitation and liquidation;
(C) Any necessary filing fees;
(D) The fees and mileage payable to witnesses;
(E) Authorized reasonable attorney's fees and other professional services rendered in the rehabilitation and liquidation; and
(F) The reasonable expenses of a guaranty association or foreign guaranty association for unallocated loss adjustment expenses;
(2) Class 2. All claims under policies, including the claims of the federal or any state or local government for losses incurred (loss claims), including third party claims and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and policies and annuities, which, for purposes of this section only, shall include guaranteed investment contracts and funding agreements, whether for death proceeds, annuity proceeds, or investment values shall be treated as loss claims. That portion of any loss, indemnification for which is provided by other benefits or advantages recovered by the claimant, shall not be included in this class, other than benefits or advantages recovered or recoverable in the discharge of familial obligation of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment by an employer to the employer's employee shall be treated as a gratuity;
(3) Class 3. Claims of the federal government, including those that otherwise would be within Class 5, but not including claims that are within Class 2;
(4) Class 4. Reasonable compensation to employees for services performed to the extent that they do not exceed two (2) months of monetary compensation and represent payment for services performed within one (1) year before the filing of the petition for liquidation or, if rehabilitation preceded liquidation, within one (1) year before the filing of the petition for rehabilitation. Principal officers and directors are not entitled to the benefit of this priority except as otherwise approved by the liquidator and the court. The priority is in lieu of any other similar priority that may be authorized by law as to wages or compensation of employees;
(5) Class 5. Claims under nonassessable policies for unearned premium or other premium refunds, claims of general creditors, including claims of ceding and assuming companies in their capacity as such, and every claim arising under an unallocated annuity contract, except unallocated annuity contracts and defined government contribution plans qualified under § 403(b) of the Internal Revenue Code ( 26 U.S.C. § 403(b) ), issued in connection with a separate account agreement providing, in effect, that the assets in the separate account shall not be chargeable with liabilities arising out of any other business of the insurer, to the extent that the claim is not satisfied and fully discharged out of the assets of the separate account equal to the reserves maintained in the account for the agreement;
(6) Class 6. Claims of any state or local government except those under Class 2. Claims, including those of any state and local governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of the claims shall be postponed to the class of claims under subdivision (a)(9);
(7) Class 7. Claims filed late or any other claims other than claims under subdivisions (a)(8) and (9);
(8) Class 8. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payments to members of domestic mutual insurance companies shall be limited in accordance with law; and
(9) Class 9. The claims of shareholders or other owners in their capacity as shareholders.
(b) If any classification or priority provided for in subsection (a), or the application of the classification or priority to any person or circumstances, is held to be unconstitutional or otherwise invalid, the invalidity shall not affect the remaining portions or applications of subsection (a) that can be given effect without the invalid portion or application.
Acts 1991, ch. 142, § 4; 1993, ch. 253, § 21; 1997 , ch. 188, §§ 1 - 9; 2001, ch. 91, § 1.
Tenn. Code Ann. § 56-7-2908 — TN Code / Title 56 / Chapter 7 / Section 56-7-2908
[For postponed repeal effective 6/30/2025, see T.C.A. 56-7-2916] Eligibility for program - Unfair practices
Status: in_force

(a) Eligibility for the program operated pursuant to this part shall be limited to citizens of the United States, except that individuals satisfying the federally defined exceptions contained in 8 U.S.C. § 1622(b) shall also be eligible to apply. (b) A federally defined eligible individual who has not experienced a significant break in coverage and who is and continues to be a resident shall be eligible for program coverage. (c) To the extent allowed under federal law, the board may establish eligibility criteria to provide program coverage for individuals not specified in subsection (a). (1) (A) In the first twelve (12) months of the program's operation, the criteria shall include, with respect to individuals who are not federally defined eligible individuals: (i) A requirement that an individual be a resident of Tennessee for at least six (6) months; (ii) A requirement that an individual not have had health insurance coverage in the previous six (6) months; (iii) A requirement that an individual not have access to health insurance coverage at the time of application to the program; (iv) A requirement that an individual exhaust any option of continuation coverage under a group or individual health insurance plan, including COBRA continuation coverage; and (v) A requirement that the person not have coverage pursuant to § 56-7-2809 . (B) The board shall establish procedures to verify that the criteria in subdivisions (c)(1)(A)(i)-(v) have been met. (2) At the end of the first year of the program's operation, or any time thereafter, the board may assess the implementation and impact of the eligibility criteria established in subdivision (c)(1) and modify the criteria as it deems appropriate. (3) The board may establish additional eligibility criteria to provide program coverage for individuals who are not federally defined eligible individuals. The criteria may include: (A) A list of medical or health conditions for which a person shall be eligible for program coverage without applying for health insurance; (B) A requirement that an individual be uninsured for a specified period of time prior to obtaining program coverage; (C) Minimum residency requirements; (D) Citizenship requirements; or (E) Any other eligibility criteria that the board deems appropriate that are not in conflict with this part. (d) To the extent allowed under federal law, the board may establish limits on the number of individuals covered by the program or the duration of program coverage, based on available funding. In determining whether to adopt limits, the board shall consider the amount of assessments required pursuant to § 56-7-2911(a)(2) , and shall attempt to keep the assessments at a reasonable level through the adoption of limits, if necessary. (e) (1) A person shall not be eligible for coverage through the program, if: (A) The person is determined to be eligible for health benefits under medicaid; (B) The person has previously terminated coverage in the program within twelve (12) months of the date that application is made to the program, except that this subdivision (e)(1)(B) shall not apply with respect to an applicant who is a federally defined eligible individual; (C) The person is an inmate or resident of a public institution, except that this subdivision (e)(1)(C) shall not apply with respect to an applicant who is a federally defined eligible individual; or (D) The person has had prior coverage with the program terminated for fraud. (2) The board may establish additional criteria disqualifying individuals for program coverage; provided, that the criteria do not apply to federally defined eligible individuals. (f) Program coverage shall cease: (1) On the date a person is no longer a resident of Tennessee; (2) On the date a person requests coverage to end; (3) Upon the death of the covered person; (4) On the date state law requires cancellation of the policy; (5) At the option of the board, thirty (30) days after the program makes any inquiry concerning the person's eligibility or place of residence to which the person does not reply; (6) At the option of the board, on a specified number of days after the day on which a premium payment for program coverage becomes due, if the payment is not made on or before that date; or (7) On the date a person becomes eligible for coverage by another plan through the person's spouse or dependent. (g) Except under the circumstances described in subsection (e), a person who ceases to meet the eligibility requirements of this section may be terminated at the end of the policy period for which the necessary premiums have been paid. Access Tennessee has the sole discretion to determine that a person does not meet the eligibility requirements. (h) It shall constitute an unfair practice in the business of insurance, for the purposes of §§ 56-8-103 and 56-6-112 , for an insurer, insurance producer or third party administrator to refer an individual to the program, or arrange for an individual to apply to the program, for the purpose of separating that individual from group health insurance coverage. A violation of § 56-8-103 under this section shall be punishable by law as a violation of § 56-8-104 . The board has the authority and responsibility to adopt policies and procedures that effectively implement this subsection (h). The commissioner may impose a higher assessment pursuant to § 56-7-2911(a)(2) on any entity determined, after appropriate notice and an opportunity for a hearing, to have violated this subsection (h). (i) Notwithstanding any other provision of this part to the contrary, during an initial two-month period to be determined by the board, the commissioner may waive any eligibility restriction set forth in statute or adopted by the board for any individual disenrolled from the TennCare standard category on or after August 1, 2005. Amended by 2015 Tenn. Acts, ch. 185, s 5, eff. 4/22/2015. Acts 2006, ch. 867, §§ 3, 14.
(a) Eligibility for the program operated pursuant to this part shall be limited to citizens of the United States, except that individuals satisfying the federally defined exceptions contained in 8 U.S.C. § 1622(b) shall also be eligible to apply.
(b) A federally defined eligible individual who has not experienced a significant break in coverage and who is and continues to be a resident shall be eligible for program coverage.
(c) To the extent allowed under federal law, the board may establish eligibility criteria to provide program coverage for individuals not specified in subsection (a). (1) (A) In the first twelve (12) months of the program's operation, the criteria shall include, with respect to individuals who are not federally defined eligible individuals: (i) A requirement that an individual be a resident of Tennessee for at least six (6) months; (ii) A requirement that an individual not have had health insurance coverage in the previous six (6) months; (iii) A requirement that an individual not have access to health insurance coverage at the time of application to the program; (iv) A requirement that an individual exhaust any option of continuation coverage under a group or individual health insurance plan, including COBRA continuation coverage; and (v) A requirement that the person not have coverage pursuant to § 56-7-2809 . (B) The board shall establish procedures to verify that the criteria in subdivisions (c)(1)(A)(i)-(v) have been met. (2) At the end of the first year of the program's operation, or any time thereafter, the board may assess the implementation and impact of the eligibility criteria established in subdivision (c)(1) and modify the criteria as it deems appropriate. (3) The board may establish additional eligibility criteria to provide program coverage for individuals who are not federally defined eligible individuals. The criteria may include: (A) A list of medical or health conditions for which a person shall be eligible for program coverage without applying for health insurance; (B) A requirement that an individual be uninsured for a specified period of time prior to obtaining program coverage; (C) Minimum residency requirements; (D) Citizenship requirements; or (E) Any other eligibility criteria that the board deems appropriate that are not in conflict with this part.
(1) (A) In the first twelve (12) months of the program's operation, the criteria shall include, with respect to individuals who are not federally defined eligible individuals: (i) A requirement that an individual be a resident of Tennessee for at least six (6) months; (ii) A requirement that an individual not have had health insurance coverage in the previous six (6) months; (iii) A requirement that an individual not have access to health insurance coverage at the time of application to the program; (iv) A requirement that an individual exhaust any option of continuation coverage under a group or individual health insurance plan, including COBRA continuation coverage; and (v) A requirement that the person not have coverage pursuant to § 56-7-2809 . (B) The board shall establish procedures to verify that the criteria in subdivisions (c)(1)(A)(i)-(v) have been met.
(A) In the first twelve (12) months of the program's operation, the criteria shall include, with respect to individuals who are not federally defined eligible individuals: (i) A requirement that an individual be a resident of Tennessee for at least six (6) months; (ii) A requirement that an individual not have had health insurance coverage in the previous six (6) months; (iii) A requirement that an individual not have access to health insurance coverage at the time of application to the program; (iv) A requirement that an individual exhaust any option of continuation coverage under a group or individual health insurance plan, including COBRA continuation coverage; and (v) A requirement that the person not have coverage pursuant to § 56-7-2809 .
(i) A requirement that an individual be a resident of Tennessee for at least six (6) months;
(ii) A requirement that an individual not have had health insurance coverage in the previous six (6) months;
(iii) A requirement that an individual not have access to health insurance coverage at the time of application to the program;
(iv) A requirement that an individual exhaust any option of continuation coverage under a group or individual health insurance plan, including COBRA continuation coverage; and
(v) A requirement that the person not have coverage pursuant to § 56-7-2809 .
(B) The board shall establish procedures to verify that the criteria in subdivisions (c)(1)(A)(i)-(v) have been met.
(2) At the end of the first year of the program's operation, or any time thereafter, the board may assess the implementation and impact of the eligibility criteria established in subdivision (c)(1) and modify the criteria as it deems appropriate.
(3) The board may establish additional eligibility criteria to provide program coverage for individuals who are not federally defined eligible individuals. The criteria may include: (A) A list of medical or health conditions for which a person shall be eligible for program coverage without applying for health insurance; (B) A requirement that an individual be uninsured for a specified period of time prior to obtaining program coverage; (C) Minimum residency requirements; (D) Citizenship requirements; or (E) Any other eligibility criteria that the board deems appropriate that are not in conflict with this part.
(A) A list of medical or health conditions for which a person shall be eligible for program coverage without applying for health insurance;
(B) A requirement that an individual be uninsured for a specified period of time prior to obtaining program coverage;
(C) Minimum residency requirements;
(D) Citizenship requirements; or
(E) Any other eligibility criteria that the board deems appropriate that are not in conflict with this part.
(d) To the extent allowed under federal law, the board may establish limits on the number of individuals covered by the program or the duration of program coverage, based on available funding. In determining whether to adopt limits, the board shall consider the amount of assessments required pursuant to § 56-7-2911(a)(2) , and shall attempt to keep the assessments at a reasonable level through the adoption of limits, if necessary.
(e) (1) A person shall not be eligible for coverage through the program, if: (A) The person is determined to be eligible for health benefits under medicaid; (B) The person has previously terminated coverage in the program within twelve (12) months of the date that application is made to the program, except that this subdivision (e)(1)(B) shall not apply with respect to an applicant who is a federally defined eligible individual; (C) The person is an inmate or resident of a public institution, except that this subdivision (e)(1)(C) shall not apply with respect to an applicant who is a federally defined eligible individual; or (D) The person has had prior coverage with the program terminated for fraud. (2) The board may establish additional criteria disqualifying individuals for program coverage; provided, that the criteria do not apply to federally defined eligible individuals.
(1) A person shall not be eligible for coverage through the program, if: (A) The person is determined to be eligible for health benefits under medicaid; (B) The person has previously terminated coverage in the program within twelve (12) months of the date that application is made to the program, except that this subdivision (e)(1)(B) shall not apply with respect to an applicant who is a federally defined eligible individual; (C) The person is an inmate or resident of a public institution, except that this subdivision (e)(1)(C) shall not apply with respect to an applicant who is a federally defined eligible individual; or (D) The person has had prior coverage with the program terminated for fraud.
(A) The person is determined to be eligible for health benefits under medicaid;
(B) The person has previously terminated coverage in the program within twelve (12) months of the date that application is made to the program, except that this subdivision (e)(1)(B) shall not apply with respect to an applicant who is a federally defined eligible individual;
(C) The person is an inmate or resident of a public institution, except that this subdivision (e)(1)(C) shall not apply with respect to an applicant who is a federally defined eligible individual; or
(D) The person has had prior coverage with the program terminated for fraud.
(2) The board may establish additional criteria disqualifying individuals for program coverage; provided, that the criteria do not apply to federally defined eligible individuals.
(f) Program coverage shall cease: (1) On the date a person is no longer a resident of Tennessee; (2) On the date a person requests coverage to end; (3) Upon the death of the covered person; (4) On the date state law requires cancellation of the policy; (5) At the option of the board, thirty (30) days after the program makes any inquiry concerning the person's eligibility or place of residence to which the person does not reply; (6) At the option of the board, on a specified number of days after the day on which a premium payment for program coverage becomes due, if the payment is not made on or before that date; or (7) On the date a person becomes eligible for coverage by another plan through the person's spouse or dependent.
(1) On the date a person is no longer a resident of Tennessee;
(2) On the date a person requests coverage to end;
(3) Upon the death of the covered person;
(4) On the date state law requires cancellation of the policy;
(5) At the option of the board, thirty (30) days after the program makes any inquiry concerning the person's eligibility or place of residence to which the person does not reply;
(6) At the option of the board, on a specified number of days after the day on which a premium payment for program coverage becomes due, if the payment is not made on or before that date; or
(7) On the date a person becomes eligible for coverage by another plan through the person's spouse or dependent.
(g) Except under the circumstances described in subsection (e), a person who ceases to meet the eligibility requirements of this section may be terminated at the end of the policy period for which the necessary premiums have been paid. Access Tennessee has the sole discretion to determine that a person does not meet the eligibility requirements.
(h) It shall constitute an unfair practice in the business of insurance, for the purposes of §§ 56-8-103 and 56-6-112 , for an insurer, insurance producer or third party administrator to refer an individual to the program, or arrange for an individual to apply to the program, for the purpose of separating that individual from group health insurance coverage. A violation of § 56-8-103 under this section shall be punishable by law as a violation of § 56-8-104 . The board has the authority and responsibility to adopt policies and procedures that effectively implement this subsection (h). The commissioner may impose a higher assessment pursuant to § 56-7-2911(a)(2) on any entity determined, after appropriate notice and an opportunity for a hearing, to have violated this subsection (h).
(i) Notwithstanding any other provision of this part to the contrary, during an initial two-month period to be determined by the board, the commissioner may waive any eligibility restriction set forth in statute or adopted by the board for any individual disenrolled from the TennCare standard category on or after August 1, 2005.
Amended by 2015 Tenn. Acts, ch. 185, s 5, eff. 4/22/2015.
Acts 2006, ch. 867, §§ 3, 14.
Tenn. Code Ann. § 56-9-403 — TN Code / Title 56 / Chapter 9 / Section 56-9-403
Title to insurer's property - When title vests - Claims
Status: in_force

(a) (1) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under § 56-9-404(c) , be vested by operation of law with the title to all of the assets, property, contracts and rights of action, agents, balances, and all of the books, accounts and other records of the insurer located in this state. (2) The date of vesting is the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting is the date of entry of the order directing possession to be taken. (3) The domiciliary liquidator has the immediate right to recover balances due from agents and to obtain possession of the books, accounts and other records of the insurer located in this state. The domiciliary liquidator also has the right to recover all other assets of the insurer located in this state, subject to § 56-9-404 . (b) (1) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the commissioner of this state shall be vested by operation of law with the title to all of the property, contracts and right of action, and all of the books, accounts and other records of the insurer located in this state, at the same time that the domiciliary liquidator is vested with title in the domicile. (2) The commissioner of this state may petition for a conservation or liquidation order under § 56-9-401 or § 56-9-402 , or for an ancillary receivership under § 56-9-404 , or, after approval by the chancery court of Davidson County, may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require. (c) Claimants residing in this state may file claims with the liquidator or ancillary receiver, if any, in this state or with the domiciliary liquidator, if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings. Acts 1991, ch. 142, § 4.
(a) (1) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under § 56-9-404(c) , be vested by operation of law with the title to all of the assets, property, contracts and rights of action, agents, balances, and all of the books, accounts and other records of the insurer located in this state. (2) The date of vesting is the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting is the date of entry of the order directing possession to be taken. (3) The domiciliary liquidator has the immediate right to recover balances due from agents and to obtain possession of the books, accounts and other records of the insurer located in this state. The domiciliary liquidator also has the right to recover all other assets of the insurer located in this state, subject to § 56-9-404 .
(1) The domiciliary liquidator of an insurer domiciled in a reciprocal state shall, except as to special deposits and security on secured claims under § 56-9-404(c) , be vested by operation of law with the title to all of the assets, property, contracts and rights of action, agents, balances, and all of the books, accounts and other records of the insurer located in this state.
(2) The date of vesting is the date of the filing of the petition, if that date is specified by the domiciliary law for the vesting of property in the domiciliary state. Otherwise, the date of vesting is the date of entry of the order directing possession to be taken.
(3) The domiciliary liquidator has the immediate right to recover balances due from agents and to obtain possession of the books, accounts and other records of the insurer located in this state. The domiciliary liquidator also has the right to recover all other assets of the insurer located in this state, subject to § 56-9-404 .
(b) (1) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the commissioner of this state shall be vested by operation of law with the title to all of the property, contracts and right of action, and all of the books, accounts and other records of the insurer located in this state, at the same time that the domiciliary liquidator is vested with title in the domicile. (2) The commissioner of this state may petition for a conservation or liquidation order under § 56-9-401 or § 56-9-402 , or for an ancillary receivership under § 56-9-404 , or, after approval by the chancery court of Davidson County, may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require.
(1) If a domiciliary liquidator is appointed for an insurer not domiciled in a reciprocal state, the commissioner of this state shall be vested by operation of law with the title to all of the property, contracts and right of action, and all of the books, accounts and other records of the insurer located in this state, at the same time that the domiciliary liquidator is vested with title in the domicile.
(2) The commissioner of this state may petition for a conservation or liquidation order under § 56-9-401 or § 56-9-402 , or for an ancillary receivership under § 56-9-404 , or, after approval by the chancery court of Davidson County, may transfer title to the domiciliary liquidator, as the interests of justice and the equitable distribution of the assets require.
(c) Claimants residing in this state may file claims with the liquidator or ancillary receiver, if any, in this state or with the domiciliary liquidator, if the domiciliary law permits. The claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceedings.
Acts 1991, ch. 142, § 4.
Tenn. Code Ann. § 56-1-418 — TN Code / Title 56 / Chapter 1 / Section 56-1-418
Calculation of disability benefit reserves
Status: in_force

The commissioner shall annually cause to be made, or require the insurer to make, calculations of policy and claim reserves for accident and health policies providing disability benefits as defined in § 56-2-201 on the basis of regulations the commissioner prescribes from time to time regarding minimum reserve standards and tables of mortality, morbidity, interest or other contingencies to be used to compute the reserves. From July 1, 1995, until the date of promulgation of rules and regulations, all calculations with respect to policy and claim reserves for accident and health policies providing disability benefits shall be made at a rate of interest not exceeding four and one half percent (4.5%) per annum. Acts 1976, ch. 507, § 1; T.C.A., § 56-144; Acts 1995, ch. 363, § 17.
The commissioner shall annually cause to be made, or require the insurer to make, calculations of policy and claim reserves for accident and health policies providing disability benefits as defined in § 56-2-201 on the basis of regulations the commissioner prescribes from time to time regarding minimum reserve standards and tables of mortality, morbidity, interest or other contingencies to be used to compute the reserves. From July 1, 1995, until the date of promulgation of rules and regulations, all calculations with respect to policy and claim reserves for accident and health policies providing disability benefits shall be made at a rate of interest not exceeding four and one half percent (4.5%) per annum.
Acts 1976, ch. 507, § 1; T.C.A., § 56-144; Acts 1995, ch. 363, § 17.
Tenn. Code Ann. § 56-8-107 — TN Code / Title 56 / Chapter 8 / Section 56-8-107
Power of commissioner
Status: in_force

(a) The commissioner shall have power to examine and investigate the affairs of every person or insurer in this state in order to determine whether the person or insurer has been or is engaged in any unfair trade practice; however, in the case of depository institutions, the commissioner shall have the power to examine and investigate the insurance activities of depository institutions in order to determine whether the depository institution has been or is engaged in any unfair trade practice prohibited by this part. The commissioner shall notify the appropriate federal or state banking agencies of the commissioner's intent to examine or investigate a depository institution and advise the appropriate federal or state banking agencies of the suspected violations of state law prior to commencing the examination or investigation. No person shall be compelled to provide a document or disclose information that is privileged under statutory or common law. (b) In the conduct of an examination, the criteria as set forth in the market conduct examiners handbook adopted by the National Association of Insurance Commissioners that was in effect when the commissioner exercised discretion to make an examination under or to take other action permitted by this part shall be used. The commissioner may by rule also employ such other guidelines or procedures as the commissioner deems appropriate. Nothing in the market conduct examiners handbook nor any other examination procedures or guidelines adopted by rule shall be construed to make any act or omission an unfair trade or unfair claims settlement practice unless the act or omission is otherwise defined as an unfair trade or unfair claims settlement practice under this part or is established to be so pursuant to § 56-8-108 . Findings against an insurer or recommendations for corrective action to an insurer that result from the examination procedures or guidelines require affirmative action or response from an insurer only when a corresponding state or federal law specifically requires such action or response by an insurer. (c) (1) The commissioner may promulgate rules that require companies authorized to do business under this title, with the exception of those that write accident and health insurance, to annually file in the office of the commissioner an annual statement in a form adopted for use by companies, which shall provide information concerning its market conduct of that year. The rules may prescribe the time and manner in which statements are to be filed, as well as the information to be included in the statements. The commissioner may, in the commissioner's discretion, exclude companies from this requirement for good cause. (2) Notwithstanding any other provision of this section to the contrary, in order to assist in the performance of the commissioner's duties, the commissioner may share the annual statements filed in accordance with this subsection (c) with the National Association of Insurance Commissioners, its affiliates and subsidiaries; provided, that, in accordance with subsection (d), the recipient agrees to maintain the confidentiality and privileged status of the filed statements. (d) (1) All testimony, documents and other information submitted to the commissioner pursuant to this section, and all records and documents maintained pursuant to this section shall be privileged and shall not be disclosed pursuant to § 10-7-503 or § 56-1-602 , nor shall they be admissible as evidence in any civil proceeding not brought by the commissioner. The commissioner, within the commissioner's discretion, may share the documents and information with other state or federal agencies, or with any law enforcement authority. (2) Notwithstanding subdivision (d)(1), any person being investigated pursuant to this section, or counsel for such person, may obtain from the commissioner a copy of an inquisitorial order or any complaint filed against such person and a copy of any written, formal or recorded statements made by that person. Upon initiation of a formal proceeding against a person, such person shall be entitled to any and all discovery rights available under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, or the Tennessee Rules of Civil Procedure. Acts 2008, ch. 1079, §§ 1, 8; Acts 2009, ch. 383, § 1; 2011, ch. 90, § 3.
(a) The commissioner shall have power to examine and investigate the affairs of every person or insurer in this state in order to determine whether the person or insurer has been or is engaged in any unfair trade practice; however, in the case of depository institutions, the commissioner shall have the power to examine and investigate the insurance activities of depository institutions in order to determine whether the depository institution has been or is engaged in any unfair trade practice prohibited by this part. The commissioner shall notify the appropriate federal or state banking agencies of the commissioner's intent to examine or investigate a depository institution and advise the appropriate federal or state banking agencies of the suspected violations of state law prior to commencing the examination or investigation. No person shall be compelled to provide a document or disclose information that is privileged under statutory or common law.
(b) In the conduct of an examination, the criteria as set forth in the market conduct examiners handbook adopted by the National Association of Insurance Commissioners that was in effect when the commissioner exercised discretion to make an examination under or to take other action permitted by this part shall be used. The commissioner may by rule also employ such other guidelines or procedures as the commissioner deems appropriate. Nothing in the market conduct examiners handbook nor any other examination procedures or guidelines adopted by rule shall be construed to make any act or omission an unfair trade or unfair claims settlement practice unless the act or omission is otherwise defined as an unfair trade or unfair claims settlement practice under this part or is established to be so pursuant to § 56-8-108 . Findings against an insurer or recommendations for corrective action to an insurer that result from the examination procedures or guidelines require affirmative action or response from an insurer only when a corresponding state or federal law specifically requires such action or response by an insurer.
(c) (1) The commissioner may promulgate rules that require companies authorized to do business under this title, with the exception of those that write accident and health insurance, to annually file in the office of the commissioner an annual statement in a form adopted for use by companies, which shall provide information concerning its market conduct of that year. The rules may prescribe the time and manner in which statements are to be filed, as well as the information to be included in the statements. The commissioner may, in the commissioner's discretion, exclude companies from this requirement for good cause. (2) Notwithstanding any other provision of this section to the contrary, in order to assist in the performance of the commissioner's duties, the commissioner may share the annual statements filed in accordance with this subsection (c) with the National Association of Insurance Commissioners, its affiliates and subsidiaries; provided, that, in accordance with subsection (d), the recipient agrees to maintain the confidentiality and privileged status of the filed statements.
(1) The commissioner may promulgate rules that require companies authorized to do business under this title, with the exception of those that write accident and health insurance, to annually file in the office of the commissioner an annual statement in a form adopted for use by companies, which shall provide information concerning its market conduct of that year. The rules may prescribe the time and manner in which statements are to be filed, as well as the information to be included in the statements. The commissioner may, in the commissioner's discretion, exclude companies from this requirement for good cause.
(2) Notwithstanding any other provision of this section to the contrary, in order to assist in the performance of the commissioner's duties, the commissioner may share the annual statements filed in accordance with this subsection (c) with the National Association of Insurance Commissioners, its affiliates and subsidiaries; provided, that, in accordance with subsection (d), the recipient agrees to maintain the confidentiality and privileged status of the filed statements.
(d) (1) All testimony, documents and other information submitted to the commissioner pursuant to this section, and all records and documents maintained pursuant to this section shall be privileged and shall not be disclosed pursuant to § 10-7-503 or § 56-1-602 , nor shall they be admissible as evidence in any civil proceeding not brought by the commissioner. The commissioner, within the commissioner's discretion, may share the documents and information with other state or federal agencies, or with any law enforcement authority. (2) Notwithstanding subdivision (d)(1), any person being investigated pursuant to this section, or counsel for such person, may obtain from the commissioner a copy of an inquisitorial order or any complaint filed against such person and a copy of any written, formal or recorded statements made by that person. Upon initiation of a formal proceeding against a person, such person shall be entitled to any and all discovery rights available under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, or the Tennessee Rules of Civil Procedure.
(1) All testimony, documents and other information submitted to the commissioner pursuant to this section, and all records and documents maintained pursuant to this section shall be privileged and shall not be disclosed pursuant to § 10-7-503 or § 56-1-602 , nor shall they be admissible as evidence in any civil proceeding not brought by the commissioner. The commissioner, within the commissioner's discretion, may share the documents and information with other state or federal agencies, or with any law enforcement authority.
(2) Notwithstanding subdivision (d)(1), any person being investigated pursuant to this section, or counsel for such person, may obtain from the commissioner a copy of an inquisitorial order or any complaint filed against such person and a copy of any written, formal or recorded statements made by that person. Upon initiation of a formal proceeding against a person, such person shall be entitled to any and all discovery rights available under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, or the Tennessee Rules of Civil Procedure.
Acts 2008, ch. 1079, §§ 1, 8; Acts 2009, ch. 383, § 1; 2011, ch. 90, § 3.
Tenn. Code Ann. § 56-3-107 — TN Code / Title 56 / Chapter 3 / Section 56-3-107
Disbursements by life insurance companies to be upon vouchers or affidavits
Status: in_force

(a) No life insurance company doing business in this state shall make any payment out of its funds amounting to one hundred dollars ($100) or more unless the payment is evidenced by a voucher signed by or on behalf of the person receiving the money and correctly describing the consideration for the payment. If the payment is for both services and other purposes, the voucher shall set forth an itemized statement of the specific services rendered and of all other expenditures. If the expenditure is in connection with any matter pending before any legislative or public body or before any department or officer of any state or government, the voucher shall correctly describe, in addition, the nature of the matter and the interest of the company. (b) When the voucher cannot be obtained, the expenditure shall be evidenced by an affidavit describing the character and object of the expenditure and stating the reason for not obtaining the voucher. Acts 1907, ch. 439, § 1; Shan., § 3348a24; Code 1932, § 6195; T.C.A. (orig. ed.), §§ 56-224, 56-328.
(a) No life insurance company doing business in this state shall make any payment out of its funds amounting to one hundred dollars ($100) or more unless the payment is evidenced by a voucher signed by or on behalf of the person receiving the money and correctly describing the consideration for the payment. If the payment is for both services and other purposes, the voucher shall set forth an itemized statement of the specific services rendered and of all other expenditures. If the expenditure is in connection with any matter pending before any legislative or public body or before any department or officer of any state or government, the voucher shall correctly describe, in addition, the nature of the matter and the interest of the company.
(b) When the voucher cannot be obtained, the expenditure shall be evidenced by an affidavit describing the character and object of the expenditure and stating the reason for not obtaining the voucher.
Acts 1907, ch. 439, § 1; Shan., § 3348a24; Code 1932, § 6195; T.C.A. (orig. ed.), §§ 56-224, 56-328.
Tenn. Code Ann. § 56-6-1201 — TN Code / Title 56 / Chapter 6 / Section 56-6-1201
Part definitions
Status: in_force

For purposes of this part: (1) "Commissioner" means the commissioner of commerce and insurance or the commissioner's designee; (2) "Covered personal property" means personal property covered under an occupant's self-service storage insurance policy; (3) "Department" means the department of commerce and insurance; (4) "Enrolled occupant" means an occupant who elects coverage under a self-service storage insurance policy issued to an owner; (5) "Leased space" means the storage space or spaces at the self-service storage facility that is leased or rented to an occupant pursuant to a rental agreement; (6) "Location" means any physical location in this state or any web site, or similar location directed to residents of this state; (7) "Occupant" means a person, or a sublessee, successor or assign of such person, entitled to the use of leased or rented storage space at a self-service storage facility under a rental agreement, to the exclusion of others; (8) "Owner" means: (A) The owner, operator, lessor or sublessor of a self-service storage facility, the agent of such person; or (B) Any person authorized by such person to manage the facility or to receive rent from an occupant under a rental agreement; (9) "Personal property" means movable property not affixed to land and includes, but is not limited to, goods, wares, merchandise, household items and vehicles; (10) "Rental agreement" means any agreement or lease, written or oral, that establishes or modifies the terms, conditions, rules or any other provisions concerning the use and occupancy of leased or rented storage space at a self-service storage facility; (11) "Self-service storage facility": (A) Means any real property designed and used for the purpose of renting or leasing storage space to occupants who are to have access to such space for the purpose of storing and removing personal property; and (B) Does not include any part of the real property used for residential purposes; (12) "Self-service storage insurance": (A) Means insurance which may provide coverage for the repair or replacement of covered personal property against any one (1) or more of the following causes: (i) Loss; (ii) Theft; (iii) Damage; or (iv) Other similar causes of loss; and (B) Does not include a homeowner's, renter's, private passenger automobile, commercial multi-peril or similar policy; (13) "Self-service storage transaction" means the lease of self-service storage space by an owner to an occupant pursuant to a rental agreement; (14) "Supervising entity" means a business entity that is a licensed insurance producer or insurer; and (15) "Vehicle" means a motor vehicle, a trailer or a semitrailer as defined in §§ 55-1-103 and 55-1-105 and a vessel as defined in § 69-9-204 . Added by 2013 Tenn. Acts, ch. 293,s 2, eff. 7/1/2013.
For purposes of this part:
(1) "Commissioner" means the commissioner of commerce and insurance or the commissioner's designee;
(2) "Covered personal property" means personal property covered under an occupant's self-service storage insurance policy;
(3) "Department" means the department of commerce and insurance;
(4) "Enrolled occupant" means an occupant who elects coverage under a self-service storage insurance policy issued to an owner;
(5) "Leased space" means the storage space or spaces at the self-service storage facility that is leased or rented to an occupant pursuant to a rental agreement;
(6) "Location" means any physical location in this state or any web site, or similar location directed to residents of this state;
(7) "Occupant" means a person, or a sublessee, successor or assign of such person, entitled to the use of leased or rented storage space at a self-service storage facility under a rental agreement, to the exclusion of others;
(8) "Owner" means: (A) The owner, operator, lessor or sublessor of a self-service storage facility, the agent of such person; or (B) Any person authorized by such person to manage the facility or to receive rent from an occupant under a rental agreement;
(A) The owner, operator, lessor or sublessor of a self-service storage facility, the agent of such person; or
(B) Any person authorized by such person to manage the facility or to receive rent from an occupant under a rental agreement;
(9) "Personal property" means movable property not affixed to land and includes, but is not limited to, goods, wares, merchandise, household items and vehicles;
(10) "Rental agreement" means any agreement or lease, written or oral, that establishes or modifies the terms, conditions, rules or any other provisions concerning the use and occupancy of leased or rented storage space at a self-service storage facility;
(11) "Self-service storage facility": (A) Means any real property designed and used for the purpose of renting or leasing storage space to occupants who are to have access to such space for the purpose of storing and removing personal property; and (B) Does not include any part of the real property used for residential purposes;
(A) Means any real property designed and used for the purpose of renting or leasing storage space to occupants who are to have access to such space for the purpose of storing and removing personal property; and
(B) Does not include any part of the real property used for residential purposes;
(12) "Self-service storage insurance": (A) Means insurance which may provide coverage for the repair or replacement of covered personal property against any one (1) or more of the following causes: (i) Loss; (ii) Theft; (iii) Damage; or (iv) Other similar causes of loss; and (B) Does not include a homeowner's, renter's, private passenger automobile, commercial multi-peril or similar policy;
(A) Means insurance which may provide coverage for the repair or replacement of covered personal property against any one (1) or more of the following causes: (i) Loss; (ii) Theft; (iii) Damage; or (iv) Other similar causes of loss; and
(i) Loss;
(ii) Theft;
(iii) Damage; or
(iv) Other similar causes of loss; and
(B) Does not include a homeowner's, renter's, private passenger automobile, commercial multi-peril or similar policy;
(13) "Self-service storage transaction" means the lease of self-service storage space by an owner to an occupant pursuant to a rental agreement;
(14) "Supervising entity" means a business entity that is a licensed insurance producer or insurer; and
(15) "Vehicle" means a motor vehicle, a trailer or a semitrailer as defined in §§ 55-1-103 and 55-1-105 and a vessel as defined in § 69-9-204 .
Added by 2013 Tenn. Acts, ch. 293,s 2, eff. 7/1/2013.
Tenn. Code Ann. § 56-14-113 — TN Code / Title 56 / Chapter 14 / Section 56-14-113
Premiums subject to a gross premium tax - Amount
Status: in_force

(a) The premiums charged for surplus lines insurance are subject to a gross premium tax in an amount to be determined by subsection (b). (b) (1) In addition to the full amount of gross premiums charged by the insurer for the insurance, every person licensed pursuant to § 56-14-104 shall collect and pay to the commissioner a sum based on the total gross premiums charged, less any return premiums, for surplus lines insurance provided by the surplus lines agent pursuant to the license. Where the insurance covers an insured whose home state is this state, the sum payable shall be computed based on an amount equal to five percent (5%) on the gross premiums, less the amount of gross premiums allocated to this state and returned to the insured. (2) The tax on any portion of the premium unearned at termination of insurance having been credited by the state to the surplus lines agent shall be returned to the policyholder directly by the surplus lines agent or through the producing broker, if any. (3) The surplus lines agent is prohibited from rebating, for any reason, any part of the tax. (4) The commissioner is authorized to contract or compact with other states for the purpose of collecting and disbursing to reciprocal states, defined as those participating in such contract or compact, any funds collected pursuant to subsection (a) that are applicable to other properties, risks, or exposures located or to be performed outside of this state. To the extent that other states where portions of the properties, risks, or exposures reside have failed to enter into compact or reciprocal allocation procedures with this state, the net premium tax collected shall be retained by this state. (5) On or before February 15 for the quarter ending the preceding December 31, on or before May 15 for the quarter ending the preceding March 31, on or before August 15 for the quarter ending the preceding June 30, and on or before November 15 for the quarter ending the preceding September 30, at the time of filing the reports as set forth in § 56-14-106 , each surplus lines licensee shall pay the premium tax due for the policies written during the period covered by the report in the manner prescribed by the commissioner. (6) For the purposes of this section, "premium" includes all premiums, membership fees, assessments, dues, or any other consideration for insurance collected under this section. (7) The tax collected under this section shall be in lieu of all other insurance taxes. (8) The surplus lines agent shall collect from the insured the amount of the tax at the time of delivery of the cover note, certificate of insurance, policy, or other initial confirmation of insurance, in addition to the full amount of the gross premium charged by the insurer for the insurance. No agent shall absorb the tax nor shall any agent, as an inducement for insurance or for any other reason, rebate all or any part of the tax or the agent's commission. (c) All surplus lines premium taxes collected by a surplus lines agent under this section are trust funds in the agent's hands and the property of this state. Any surplus lines agent who fails or refuses to pay over to the state the surplus lines premium tax at the time required in this section, or who fraudulently withholds or appropriates or otherwise uses the money or any portions of the money belonging to the state, commits theft and shall be punished as provided by title 39, chapter 14, part 1, regardless of whether the surplus lines agent has or claims to have any interest in the money so received. (d) (1) Any surplus lines agent or writing agent, holding the premium tax funds in trust, who fails and neglects to make returns and payments promptly and correctly as provided by subdivision (b)(5) shall forfeit and pay to the state, in addition to the amount of these taxes, an amount equal to five percent (5%) for the first month or fractional part of the first month of delinquency; provided, that should the period of delinquency exceed one (1) month, the rate of penalty will be an additional five percent (5%) for the second month or fractional part of the second month and penalty thereafter at the rate of one half of one percent (0.5%) per month of the amount of tax due, the maximum penalty not to exceed ten thousand dollars ($10,000) for any agent not more than three (3) days delinquent. All delinquencies shall bear interest at the rate of ten percent (10%) per annum from the date the amount was due until paid. The penalty and interest shall apply to any part of the tax unpaid by the due date. (2) The commissioner has the discretion, for good cause shown, upon application made in advance of the delinquency date, to grant an extension of time not to exceed sixty (60) days, to the surplus lines agent or writing agent, holding the premium tax funds in trust, to file the premium tax returns and pay the tax imposed in this chapter, without penalty attached, but the tax shall bear interest as provided in subdivision (d)(1) from the date the amount was due. (3) Any surplus lines agent or writing agent, holding the premium tax funds in trust, failing to pay the tax due plus penalty and interest for sixty (60) days beyond the due date may thereafter be debarred from transacting any business of insurance in the state until these taxes and penalties are fully paid, and the commissioner shall revoke the license of the surplus lines agent or writing agent. (4) The commissioner is authorized to promulgate rules that provide for a convenience fee to cover the cost of accepting electronic monthly affidavits, annual reports and tax payments. Any fee set by rule under the authority of this subdivision (d)(4) may be assessed in addition to any applicable penalty and interest. In no event shall the convenience fee exceed the actual costs incurred by the department in accepting electronic monthly affidavits, annual reports and tax payments. Any convenience fee may be collected from the insured in addition to the premium and tax. (e) If the property of any surplus lines agent is seized upon any mesne or final process in any court in this state, or when the business of any surplus lines agent is suspended by the action of creditors or put into the hands of any assignee, receiver or trustee, all surplus lines premium tax money and penalties due the state from the surplus lines agent shall be considered preferred claims, and the state shall be a preferred creditor and shall be paid in full. (f) The attorney general and reporter, upon request of the commissioner, shall proceed in the courts of this or any other state or in any federal court or agency to recover the tax not paid within the time prescribed in this section. Amended by 2015 Tenn. Acts, ch. 155,s 17, eff. 3/1/2016. Amended by 2013 Tenn. Acts, ch. 444,s 1, eff. 1/1/2014. Acts 1969, ch. 270, § 13; T.C.A., § 56-3813; Acts 1985, ch. 354, § 3; 2003, ch. 215, § 5; 2011, ch. 446, § 1.
(a) The premiums charged for surplus lines insurance are subject to a gross premium tax in an amount to be determined by subsection (b).
(b) (1) In addition to the full amount of gross premiums charged by the insurer for the insurance, every person licensed pursuant to § 56-14-104 shall collect and pay to the commissioner a sum based on the total gross premiums charged, less any return premiums, for surplus lines insurance provided by the surplus lines agent pursuant to the license. Where the insurance covers an insured whose home state is this state, the sum payable shall be computed based on an amount equal to five percent (5%) on the gross premiums, less the amount of gross premiums allocated to this state and returned to the insured. (2) The tax on any portion of the premium unearned at termination of insurance having been credited by the state to the surplus lines agent shall be returned to the policyholder directly by the surplus lines agent or through the producing broker, if any. (3) The surplus lines agent is prohibited from rebating, for any reason, any part of the tax. (4) The commissioner is authorized to contract or compact with other states for the purpose of collecting and disbursing to reciprocal states, defined as those participating in such contract or compact, any funds collected pursuant to subsection (a) that are applicable to other properties, risks, or exposures located or to be performed outside of this state. To the extent that other states where portions of the properties, risks, or exposures reside have failed to enter into compact or reciprocal allocation procedures with this state, the net premium tax collected shall be retained by this state. (5) On or before February 15 for the quarter ending the preceding December 31, on or before May 15 for the quarter ending the preceding March 31, on or before August 15 for the quarter ending the preceding June 30, and on or before November 15 for the quarter ending the preceding September 30, at the time of filing the reports as set forth in § 56-14-106 , each surplus lines licensee shall pay the premium tax due for the policies written during the period covered by the report in the manner prescribed by the commissioner. (6) For the purposes of this section, "premium" includes all premiums, membership fees, assessments, dues, or any other consideration for insurance collected under this section. (7) The tax collected under this section shall be in lieu of all other insurance taxes. (8) The surplus lines agent shall collect from the insured the amount of the tax at the time of delivery of the cover note, certificate of insurance, policy, or other initial confirmation of insurance, in addition to the full amount of the gross premium charged by the insurer for the insurance. No agent shall absorb the tax nor shall any agent, as an inducement for insurance or for any other reason, rebate all or any part of the tax or the agent's commission.
(1) In addition to the full amount of gross premiums charged by the insurer for the insurance, every person licensed pursuant to § 56-14-104 shall collect and pay to the commissioner a sum based on the total gross premiums charged, less any return premiums, for surplus lines insurance provided by the surplus lines agent pursuant to the license. Where the insurance covers an insured whose home state is this state, the sum payable shall be computed based on an amount equal to five percent (5%) on the gross premiums, less the amount of gross premiums allocated to this state and returned to the insured.
(2) The tax on any portion of the premium unearned at termination of insurance having been credited by the state to the surplus lines agent shall be returned to the policyholder directly by the surplus lines agent or through the producing broker, if any.
(3) The surplus lines agent is prohibited from rebating, for any reason, any part of the tax.
(4) The commissioner is authorized to contract or compact with other states for the purpose of collecting and disbursing to reciprocal states, defined as those participating in such contract or compact, any funds collected pursuant to subsection (a) that are applicable to other properties, risks, or exposures located or to be performed outside of this state. To the extent that other states where portions of the properties, risks, or exposures reside have failed to enter into compact or reciprocal allocation procedures with this state, the net premium tax collected shall be retained by this state.
(5) On or before February 15 for the quarter ending the preceding December 31, on or before May 15 for the quarter ending the preceding March 31, on or before August 15 for the quarter ending the preceding June 30, and on or before November 15 for the quarter ending the preceding September 30, at the time of filing the reports as set forth in § 56-14-106 , each surplus lines licensee shall pay the premium tax due for the policies written during the period covered by the report in the manner prescribed by the commissioner.
(6) For the purposes of this section, "premium" includes all premiums, membership fees, assessments, dues, or any other consideration for insurance collected under this section.
(7) The tax collected under this section shall be in lieu of all other insurance taxes.
(8) The surplus lines agent shall collect from the insured the amount of the tax at the time of delivery of the cover note, certificate of insurance, policy, or other initial confirmation of insurance, in addition to the full amount of the gross premium charged by the insurer for the insurance. No agent shall absorb the tax nor shall any agent, as an inducement for insurance or for any other reason, rebate all or any part of the tax or the agent's commission.
(c) All surplus lines premium taxes collected by a surplus lines agent under this section are trust funds in the agent's hands and the property of this state. Any surplus lines agent who fails or refuses to pay over to the state the surplus lines premium tax at the time required in this section, or who fraudulently withholds or appropriates or otherwise uses the money or any portions of the money belonging to the state, commits theft and shall be punished as provided by title 39, chapter 14, part 1, regardless of whether the surplus lines agent has or claims to have any interest in the money so received.
(d) (1) Any surplus lines agent or writing agent, holding the premium tax funds in trust, who fails and neglects to make returns and payments promptly and correctly as provided by subdivision (b)(5) shall forfeit and pay to the state, in addition to the amount of these taxes, an amount equal to five percent (5%) for the first month or fractional part of the first month of delinquency; provided, that should the period of delinquency exceed one (1) month, the rate of penalty will be an additional five percent (5%) for the second month or fractional part of the second month and penalty thereafter at the rate of one half of one percent (0.5%) per month of the amount of tax due, the maximum penalty not to exceed ten thousand dollars ($10,000) for any agent not more than three (3) days delinquent. All delinquencies shall bear interest at the rate of ten percent (10%) per annum from the date the amount was due until paid. The penalty and interest shall apply to any part of the tax unpaid by the due date. (2) The commissioner has the discretion, for good cause shown, upon application made in advance of the delinquency date, to grant an extension of time not to exceed sixty (60) days, to the surplus lines agent or writing agent, holding the premium tax funds in trust, to file the premium tax returns and pay the tax imposed in this chapter, without penalty attached, but the tax shall bear interest as provided in subdivision (d)(1) from the date the amount was due. (3) Any surplus lines agent or writing agent, holding the premium tax funds in trust, failing to pay the tax due plus penalty and interest for sixty (60) days beyond the due date may thereafter be debarred from transacting any business of insurance in the state until these taxes and penalties are fully paid, and the commissioner shall revoke the license of the surplus lines agent or writing agent. (4) The commissioner is authorized to promulgate rules that provide for a convenience fee to cover the cost of accepting electronic monthly affidavits, annual reports and tax payments. Any fee set by rule under the authority of this subdivision (d)(4) may be assessed in addition to any applicable penalty and interest. In no event shall the convenience fee exceed the actual costs incurred by the department in accepting electronic monthly affidavits, annual reports and tax payments. Any convenience fee may be collected from the insured in addition to the premium and tax.
(1) Any surplus lines agent or writing agent, holding the premium tax funds in trust, who fails and neglects to make returns and payments promptly and correctly as provided by subdivision (b)(5) shall forfeit and pay to the state, in addition to the amount of these taxes, an amount equal to five percent (5%) for the first month or fractional part of the first month of delinquency; provided, that should the period of delinquency exceed one (1) month, the rate of penalty will be an additional five percent (5%) for the second month or fractional part of the second month and penalty thereafter at the rate of one half of one percent (0.5%) per month of the amount of tax due, the maximum penalty not to exceed ten thousand dollars ($10,000) for any agent not more than three (3) days delinquent. All delinquencies shall bear interest at the rate of ten percent (10%) per annum from the date the amount was due until paid. The penalty and interest shall apply to any part of the tax unpaid by the due date.
(2) The commissioner has the discretion, for good cause shown, upon application made in advance of the delinquency date, to grant an extension of time not to exceed sixty (60) days, to the surplus lines agent or writing agent, holding the premium tax funds in trust, to file the premium tax returns and pay the tax imposed in this chapter, without penalty attached, but the tax shall bear interest as provided in subdivision (d)(1) from the date the amount was due.
(3) Any surplus lines agent or writing agent, holding the premium tax funds in trust, failing to pay the tax due plus penalty and interest for sixty (60) days beyond the due date may thereafter be debarred from transacting any business of insurance in the state until these taxes and penalties are fully paid, and the commissioner shall revoke the license of the surplus lines agent or writing agent.
(4) The commissioner is authorized to promulgate rules that provide for a convenience fee to cover the cost of accepting electronic monthly affidavits, annual reports and tax payments. Any fee set by rule under the authority of this subdivision (d)(4) may be assessed in addition to any applicable penalty and interest. In no event shall the convenience fee exceed the actual costs incurred by the department in accepting electronic monthly affidavits, annual reports and tax payments. Any convenience fee may be collected from the insured in addition to the premium and tax.
(e) If the property of any surplus lines agent is seized upon any mesne or final process in any court in this state, or when the business of any surplus lines agent is suspended by the action of creditors or put into the hands of any assignee, receiver or trustee, all surplus lines premium tax money and penalties due the state from the surplus lines agent shall be considered preferred claims, and the state shall be a preferred creditor and shall be paid in full.
(f) The attorney general and reporter, upon request of the commissioner, shall proceed in the courts of this or any other state or in any federal court or agency to recover the tax not paid within the time prescribed in this section.
Amended by 2015 Tenn. Acts, ch. 155,s 17, eff. 3/1/2016.
Amended by 2013 Tenn. Acts, ch. 444,s 1, eff. 1/1/2014.
Acts 1969, ch. 270, § 13; T.C.A., § 56-3813; Acts 1985, ch. 354, § 3; 2003, ch. 215, § 5; 2011, ch. 446, § 1.
Tenn. Code Ann. § 56-5-109 — TN Code / Title 56 / Chapter 5 / Section 56-5-109
Information for insureds - Review for aggrieved persons - Civil penalty - Rule-making authority
Status: in_force

(a) Information to Be Furnished Insureds. Every insurer or rate service organization shall, within a reasonable time after receipt of a written request and upon payment of a reasonable charge, furnish to any insured affected by a rate published by it, all pertinent information as to the rate. (b) Aggrieved Persons. Every insurer and rate service organization shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard on written request to review the manner in which the rating system has been applied in connection with the insurance afforded. If the insurer fails to grant or reject the request within thirty (30) days, the applicant may proceed in the same manner as if the application had been rejected. Any party affected by the action of the insurer on the request may, within thirty (30) days after written notice of the action, appeal to the commissioner who, after a hearing held upon not less than ten (10) days' written notice to the appellant and to the insurer, may affirm, modify, or reverse the action. (c) After notice and hearing in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, the commissioner may impose a civil penalty of up to ten thousand dollars ($10,000) per occurrence, upon a finding that a workers' compensation insurer, without any lawful basis, has assessed an employer premium: (1) For individuals who are not employees; or (2) On the basis of improper classification of employees. (d) The commissioner shall have the authority to promulgate rules, including emergency rules, to effectuate this section. The rules may provide the commissioner with the authority to assess the charges of the administrative procedures division of the office of the secretary of state for any administrative hearing conducted under this section. Acts 1983, ch. 66, § 10; 2006, ch. 536, § 1.
(a) Information to Be Furnished Insureds. Every insurer or rate service organization shall, within a reasonable time after receipt of a written request and upon payment of a reasonable charge, furnish to any insured affected by a rate published by it, all pertinent information as to the rate.
(b) Aggrieved Persons. Every insurer and rate service organization shall provide within this state reasonable means whereby any person aggrieved by the application of its rating system may be heard on written request to review the manner in which the rating system has been applied in connection with the insurance afforded. If the insurer fails to grant or reject the request within thirty (30) days, the applicant may proceed in the same manner as if the application had been rejected. Any party affected by the action of the insurer on the request may, within thirty (30) days after written notice of the action, appeal to the commissioner who, after a hearing held upon not less than ten (10) days' written notice to the appellant and to the insurer, may affirm, modify, or reverse the action.
(c) After notice and hearing in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, the commissioner may impose a civil penalty of up to ten thousand dollars ($10,000) per occurrence, upon a finding that a workers' compensation insurer, without any lawful basis, has assessed an employer premium: (1) For individuals who are not employees; or (2) On the basis of improper classification of employees.
(1) For individuals who are not employees; or
(2) On the basis of improper classification of employees.
(d) The commissioner shall have the authority to promulgate rules, including emergency rules, to effectuate this section. The rules may provide the commissioner with the authority to assess the charges of the administrative procedures division of the office of the secretary of state for any administrative hearing conducted under this section.
Acts 1983, ch. 66, § 10; 2006, ch. 536, § 1.