This title shall be known and may be cited as the Tennessee Insurance Law.  
 As used in this chapter and Chapters 2 4, 7, 10 and 11 of this title, unless the context otherwise requires:   Commissioner means the commissioner of commerce and insurance;   Company or insurance company includes all corporations, associations, partnerships, or individuals engaged as principals in the business of insurance;   Department means the department of commerce and insurance;   Domestic designates those companies incorporated in this state;   Foreign, when used without limitation, includes all companies formed by authority of any other state or government;   Net assets means the funds of an insurance company available for the payment of its obligations in this state, including uncollected and deferred premiums not more than three (3) months due on policies actually in force, after deducting from the funds all unpaid losses and claims, and claims for losses, and all other debts and liabilities, inclusive of policy liability and exclusive of capital; and   Unearned premiums, reinsurance reserve, and net value of policies or premium reserve, severally, mean the liability of an insurance company upon its insurance contracts, other than accrued claims computed by rules of valuation established by  56-1-402  56-1-405 [see the Compiler's Notes].   
  The commissioner shall adopt data disclosure requirements developed by the National Association of Insurance Commissioners for Property and Casualty Insurors.   The commissioner is authorized to request other data that the commissioner deems necessary in considering requests for rate adjustments.   
  The commissioner, in consultation with the commissioner of health, shall promulgate rules and regulations to effect the development and implementation of standardized forms for all health care insurance claims made in this state. In developing the rules and regulations, the commissioner shall give consideration to requiring the use of Form UB92.   The commissioner and the commissioner of health shall develop and implement the standardized forms in consultation with the insurance companies offering for sale health care policies in this state.   The commissioner, in consultation with the commissioner of health, shall promulgate the rules and regulations pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   All insurance companies offering for sale health care policies in this state shall require all policyholders and third party claimants to utilize the standardized forms when making a claim against any health care insurance policy in effect in this state.   As used in this section, standardized forms includes, but is not necessarily limited to, electronic storage systems and information.   
  Notwithstanding any law to the contrary, accident and health insurance, accident and sickness insurance, health insurance, health benefit plan or other similar term used in any legislation enacted after May 24, 2000, shall not include, unless specifically provided, the following types of insurance or any combination of these types of insurance: hospital indemnity, accident, dental, specified disease, disability income, long-term care, Champus supplement, or Medicare supplement, except as provided in this section.   Nothing contained in this section shall apply to chapters 4 and 12 of this title.   Nothing contained in this section shall apply to programs and services provided pursuant to Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), and regulations promulgated pursuant to Title XIX of the Social Security Act.   
   Notwithstanding any other provision of law or rule to the contrary, if the department makes a request for information from an entity or individual licensed under this title, or required to be licensed under this title, concerning a complaint filed against the entity or individual, and the request requires a response, the entity or individual must respond to the request within a reasonable time.    As used in this section, reasonable time means a period of time not to exceed thirty (30) days from the date the request is received by the entity or individual.   For the purposes of this section, the response by the entity or individual shall constitute a response if it acknowledges the inquiry from the department and sets forth a time frame to address the substantive issues in the inquiry.       This section does not apply to or preempt any other law that requires or allows the commissioner to require an individual or entity to respond to a request from the department within a period of time less than thirty (30) days.   The commissioner may levy a civil penalty in the amount of one hundred dollars ($100) per day upon any entity or individual that fails to respond within a reasonable time.   This section does not rescind or preempt any due process rights of entities regulated pursuant to this title.   This section does not apply to entities subject to regulation by the department that participate in the TennCare program under Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program.   
 Notwithstanding any other law to the contrary, in conjunction with the issuance of licenses, permits and registrations and the investigation of consumer complaints, the department has the authority to query the Tennessee bureau of investigation's (TBI) Tennessee criminal history records system for the following information:   Tennessee criminal history records;   Tennessee repository for apprehension of persons (TRAP);   State of Tennessee orders of protection files (STOP); and   Criminal history records of the federal government and other states to which the TBI may have access. Criminal history records of the federal bureau of investigation may be obtained for the reasons listed in this section only if fingerprints are obtained and submitted through the TBI.   
  The commissioner shall conduct a study of Tennessee's insurance laws to determine what impediments, if any, exist under the insurance laws or policies of this state that may be acting as deterrents for insurance companies in this state to underwrite policies of insurance to insure a person who has used force that is justified, including deadly force, in protecting such person's self or property pursuant to  39-11-611 and 39-11-612, commonly referred to as the castle doctrine, or any other law.   The commissioner shall report to the general assembly and to the governor the results of the study required by subsection (a) no later than March 1, 2012, with recommendations on whether such insurance should, in the commissioner's opinion, become available to Tennessee residents.   
  As used in this section, unless the context otherwise requires:  Guarantee agency means a guarantor of student loans that has an agreement with the United States secretary of education;   License means a license, certification, registration, permit, approval or other similar document issued to an individual evidencing admission to or granting authority to engage in a profession, trade, occupation, business, or industry;   Licensing authority means the department or any division, board, commission, committee, agency or other governmental entity under the authority of the department or attached to a division of the department that has been established by statute or regulation to oversee the issuance and regulation of any license; and   TSAC means the Tennessee student assistance corporation.      Upon receiving a copy of a final order as provided in subsection (c) from TSAC or a guarantee agency, each licensing authority shall suspend, deny or revoke the license of any person who has defaulted on a repayment or service obligation under any federal family education loan program, the federal Higher Education Act of 1965 (20 U.S.C.  1001 et seq.), a student loan guaranteed or administered by TSAC, or any other state or federal educational loan or service-conditional scholarship program.   Notwithstanding subdivision (b)(1), a licensing authority may elect not to suspend, deny, or revoke the license of a person if the default or delinquency is the result of a medical hardship that prevented the person from working in the person's licensed field and the medical hardship significantly contributed to the default or delinquency.      Each licensing authority shall accept any determination of default from TSAC or a guarantee agency, after TSAC or the guarantee agency has afforded a debtor an opportunity to be heard in accordance with subdivision (c)(2); and the licensing authority shall rescind any disciplinary action and restore any license upon receiving notice from TSAC or the guarantee agency that the debtor has agreed to serve the debtor's obligation or is in compliance with an approved repayment plan.    Unless a debtor has made satisfactory arrangements according to the lender, TSAC or the guarantee agency, which may include administrative wage garnishment, voluntary payment arrangements, deferment or forbearance, then the debtor shall be regarded as delinquent or in default. If a debtor is delinquent or in default on a repayment or service obligation under a guaranteed student loan identified in subsection (b), or the debtor has failed to enter into a payment plan, agreed to a service obligation or comply with a payment plan previously approved by TSAC or the guarantee agency, then TSAC or the guarantee agency shall issue to the debtor a notice of intent to file an order with the appropriate licensing authority to seek to suspend, deny or revoke the debtor's license. The notice shall:   Be served upon the debtor personally or by certified mail with return receipt requested; and   State that the debtor's license shall be suspended, denied or revoked ninety (90) days after service unless within that time the debtor:  Pays the entire debt stated in the notice;   Enters into a payment plan or service obligation, or complies with a payment plan previously entered into and approved by TSAC or the guarantee agency;   Requests and qualifies for deferment, forbearance or other satisfactory compliance; or   Requests a hearing before TSAC or the guarantee agency.       The hearing request by the debtor shall be made in writing and must be received by TSAC or the guarantee agency within twenty (20) days of the date the notice is served.   TSAC or the guarantee agency, upon receipt of a request for a hearing from the debtor, shall schedule a hearing to determine whether a determination of delinquency or default which could result in suspension, denial or revocation of the debtor's license is appropriate. The debtor's license may not be suspended, denied or revoked until a determination is reached following the hearing. The issues that may be determined in the hearing are:   The amount of the debt, if any;   Whether the debtor is delinquent or in default;   Whether the debtor:  Has entered into a payment plan or service obligation approved by TSAC or the guarantee agency;   Is willing to enter into a payment plan or service obligation approved by TSAC or the guarantee agency; or   Is willing to comply with a payment plan or service obligation previously entered into and approved by TSAC or the guarantee agency;     Whether the debtor is eligible for deferment, forbearance or other satisfactory compliance; and   Whether the debtor's default or delinquency is the result of a medical hardship that prevented the debtor from working in the debtor's licensed field and the medical hardship significantly contributed to the default or delinquency.     If a debtor, without good cause, fails to respond to the notice of intent, fails to timely request a hearing, or fails to appear at a regularly scheduled hearing, the debtor's defenses, objections, or request for a payment plan or compliance with a payment plan may be determined to be without merit; and TSAC or the guarantee agency shall enter a final decision and order, requesting suspension, denial or revocation of the debtor's license, and further requesting the licensing authority to order the debtor to refrain from engaging in the licensed activity. TSAC or the guarantee agency shall send a copy of the order to the licensing authority and the debtor.   The administrative hearings shall be conducted in accordance with rules and regulations adopted under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.     When TSAC or the guarantee agency determines that the debt is paid in full or the debtor has entered into a payment plan, entered into a service obligation, is otherwise in satisfactory compliance or complied with a payment plan previously approved by TSAC or the guarantee agency, TSAC or the guarantee agency shall enter an order requesting that the licensing authority terminate the order suspending, denying or revoking the license. TSAC or the guarantee agency shall send a copy of the order to the licensing authority and the debtor. Notwithstanding any other law, rule or regulation to the contrary, when the license is reinstated, the licensing authority shall not impose a reinstatement fee that exceeds fifty dollars ($50.00).   Entry of an order seeking to terminate suspension, denial or revocation of a license does not limit the ability of TSAC or the guarantee agency to issue a new order which seeks to suspend, deny or revoke the license of the same debtor in the event of another delinquency or default.     TSAC is authorized to promulgate necessary rules and regulations to effectuate the purposes of this subsection (c). All such rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act.       The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this section. All such rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act.   
  Claims challenging liability imposed by this title must be brought in the chancery court of Davidson County pursuant to the procedures set out in title 67, chapter 1, part 9.    The commissioner may, against any person, agency, or company licensed, registered, or permitted by or operating under a certificate of authority issued by the commissioner, or acting in an unlawful capacity that brings such person, agency, or company under the jurisdiction of the commissioner, assess the actual and reasonable costs of the investigation, prosecution, and hearing of any disciplinary action held in accordance with the contested case provisions of the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3, in which sanctions of any kind are imposed on that person, agency, or company. These costs may include, but are not limited to, those incurred and assessed for the time of the prosecuting attorneys, investigators, expert witnesses, administrative judges, and any other persons involved in the investigation, prosecution, and hearing of the action.   The commissioner may promulgate rules establishing a schedule of costs that may be assessed pursuant to this section. All rules must be promulgated in accordance with the Uniform Administrative Procedures Act.    All costs assessed pursuant to this section become final thirty (30) days after the date of a final order of assessment is served.   If the individual or entity disciplined fails to pay an assessment when it becomes final, the commissioner may apply to the chancery court of Davidson County, which shall have jurisdiction over recovery of the costs, for a judgment and seek execution of the judgment.       
 There is created a department of commerce and insurance, whose chief officer is the commissioner.  
 The commissioner shall be and act as the head of the department.  
 The commissioner shall not be financially interested, directly or indirectly, in any insurance corporation subject to the supervision of the department.  
 Inquisitorial power is given to the commissioner or the commissioner's deputies to inquire into any violation of this title, and to examine any person under oath, and to compel production of books, records, or papers relative to the inquiry.  
 The commissioner is entitled to, and shall be paid, all necessary traveling expenses, including railroad fare and hotel bills paid while away from the commissioner's office on official business.  
  The commissioner is empowered, with the consent of the governor, to appoint special deputy commissioners for the better enforcement, and to apprehend all persons found in violation, of the insurance laws of this state.   The special deputies shall be clothed with powers as may be delegated by the commissioner.   The compensation of special deputy commissioners shall be limited to one half (12) of any fine assessed against any person found guilty of violating any of the insurance laws of this state; provided, that the fine so assessed shall be due to the efforts of the special deputy commissioner arresting or causing the arrest of the guilty person.   
  The commissioner is authorized to employ not more than three (3) actuaries, the qualifications of whom shall be acceptable to the commissioner, together with assistants deemed necessary by the commissioner for efficient administration of duties assigned to the actuaries. The commissioner shall assign the duties to be performed by the actuaries and assistants for the department.   The commissioner shall fix the compensation of the actuaries and assistants employed pursuant to this section and shall provide for the payment of expenses incurred by the actuaries and assistants while engaged in the performance of the duties assigned; provided, that any salary or per diem compensation shall not exceed a reasonable amount commensurate with usual compensation for like services, and the allowances of expenses shall not exceed the actual expenses incurred.   
  The commissioner shall require the actuaries employed pursuant to  56-1-207 to compute the net value of outstanding policies of life insurance in companies, associations or fraternal orders authorized to transact business in this state as required by law.   The commissioner may assign other duties to the actuaries that the commissioner deems necessary or proper.   
 The commissioner shall pay out of the fees of the commissioner's office the necessary expenses of the department, shall keep an accurate record of all receipts and expenditures, and shall require and preserve sworn vouchers for each payment. The excess of fees, after paying necessary expenses, shall be turned into the state treasury.  
  The commissioner shall appoint an advisory committee to assist the department. The advisory committee shall be composed of not more than twelve (12) members who are qualified professionals in the health insurance industry and related health fields.   The advisory committee shall meet with the commissioner or the commissioner's designee and shall report periodically to the department on its findings.   
  The commissioner shall establish within the department an office to assist older Tennesseans in understanding, evaluating, and comparing insurance products available to them. The projects, programs, and services of the office shall be coordinated with those of the commission on aging and disability created by  71-2-104. The office shall devote particular attention to addressing questions involving medicare supplement insurance policies.   Subject to the limits of any appropriation by the general assembly, the commissioner may, through the office established under subsection (a):  Employ or contract for the services of a consultant approved by the commission on aging and disability;   Train the consultant to meet with and appear before senior citizens groups to disseminate and gather information on insurance products of interest to them;   Develop a computer system capable of comparing features and rates of various insurance policies;   Reimburse volunteers for travel expenses incurred in connection with the performance of duties assigned by the office; and   Undertake any other activities that are reasonably necessary to accomplish the purposes of this section.     
  Notwithstanding any provision of this title to the contrary, the commissioner shall have the same authority to regulate and shall apply the same substantive standards to hospital and medical service corporations licensed pursuant to chapter 29 of this title as shall apply to health insurers doing business pursuant to chapter 26, part 1 of this title.    Prior to engaging in any transaction or series of transactions the net effect of which shall be to effectuate the conversion by any method, directly or indirectly, of all or substantially all of the health insurance business of the nonprofit hospital and medical service corporation, as measured by annual revenue on a consolidated basis, to a for-profit entity of any kind the equity interest of which is not wholly owned by the corporation or its insureds, the service corporation shall file with the commissioner a written notice of its intention to do so. The commissioner shall, upon receipt of the notice, forward a copy of the notice to the governor and to the speaker of the house of representatives and the speaker of the senate. The service corporation shall take no action to effectuate the completion of the conversion for a period of one (1) year from the date of the filing, or until the end of the next regular session of the general assembly in the year following the year in which the notice is given in the event the one-year period does not include a full, regular legislative session of the general assembly.   For the purposes of subdivision (b)(1):  All or substantially all of the health insurance business shall not include the sale of all or part of the assets of equity interest in a subsidiary company unless the subsidiary company constitutes in excess of seventy-five percent (75%) of the total consolidated annual revenue of the service corporation as reflected on its annual statement for the preceding year; and   The transfer of health insurance business of the service corporation shall not be deemed to include the contracting or subcontracting of business or business functions.       Notwithstanding any law to the contrary, the board of directors of the service corporation licensed pursuant to chapter 29 of this title, shall meet all of the requirements for boards of directors of nonprofit corporations pursuant to title 48, chapter 58, part 1. To the extent that chapter 29 of this title conflicts with title 48, chapter 58, title 48, chapter 58 shall control.   
 The commissioner is authorized to promulgate, by rule, a convenience fee to cover the costs of issuing or renewing licenses, registrations and permits. Any fee set by rule under the authority of this section may be assessed in addition to the fee or fees assessed for the costs of issuing or renewing licenses, registrations and permits by mail or in person. In no event shall the fee exceed the actual costs incurred in issuing or renewing a license, registration or permit.  
 The commissioner shall employ a director for the division of regulatory boards created under  4-3-1303.  
  Notwithstanding any contrary law, except title 55, chapter 17, the director has the power, duty and responsibility to:  Act as chief administrative officer for each board;   Employ all consultants, investigators, inspectors, legal counsel, and other personnel necessary to staff and carry out the functions of the boards, and assign the personnel in a manner designed to ensure their most efficient use, excluding the board of pharmacy and the state board for licensing contractors;   Provide office space and necessary quarters for the boards;   Maintain a central filing system for official records and documents of all boards;   Promulgate rules and regulations for all administrative functions and activities of the boards;   Enforce all regulations promulgated by the boards;   Collect and account for all fees prescribed to be paid to each board, and, unless otherwise prescribed by law, deposit the fees in the state treasury, and the commissioner of finance and administration shall make allotments out of the general fund as may be necessary to defray the expenses of the division and boards as provided by law;   Perform other duties the commissioner prescribes, or as prescribed by law;    Issue monthly a press release containing a disciplinary report, which shall list all disciplinary actions taken by each board during the prior month. The report shall list, by board, the following:   Name and professional address of any person disciplined the prior month;   Disciplinary action taken; and   Any civil penalty imposed; and     The disciplinary report for the prior month shall be made available to newspapers of general circulation in each of the state's metropolitan areas, Nashville, Memphis, Knoxville, Chattanooga and the tri-cities area composed of Bristol, Johnson City and Kingsport, by the fifteenth of each following month.         Notwithstanding any other law to the contrary, the director shall establish an alternative system of renewals of licenses issued by any regulatory board attached to the division of regulatory boards of the department under  4-3-1304. The system shall be designed to allow for the distribution of the renewal workload as uniformly as is practicable throughout the calendar year.   Licenses issued under the alternative method are valid for twenty-four (24) months, and shall expire on the last day of the last month of the license period; however, during a transition period or at any time thereafter, if the director, after consultation with the affected board or boards, determines that the volume of work for any given interval is unduly burdensome or costly, either the licenses or renewals, or both of them, may be issued for terms of not less than six (6) months nor more than eighteen (18) months. The fee imposed for any license under the alternative interval method for a period other than twenty-four (24) months shall be proportionate to the annual fee and modified in no other manner, except that the proportional fee shall be rounded off to the nearest quarter of a dollar (25).     As used in subdivision (b)(1), license is defined as in  4-5-102.     Notwithstanding any other law to the contrary, the director of the division of regulatory boards of the department may implement a system for electronic submission of complaints or applications for licensure or registration to any regulatory program attached to the division, including any renewal thereof, and to notify licensees electronically of renewals, rulemaking or any other notification.   
 In providing the administrative functions required under  56-1-301, 56-1-302 and 56-1-306, the director shall consult with each board as to its particular requirements, but the decision of the director in such matters shall be conclusive, except as otherwise directed by the commissioner.  
  The director or the director's duly authorized representative shall be an ex officio, nonvoting member of each board attached to the department, and shall be entitled to attend all meetings of the boards.   Each board shall advise the director of any meetings at which official action will be taken at least forty-eight (48) hours prior to the meeting, unless the director expressly waives the requirement.   
 The director, and any assistants designated by the commissioner, shall give bond as provided by law, conditioned upon the faithful performance of the duties of the office and for the faithful accounting of all money and other property that comes into their hands.  
 Any employment of personnel by the director for the division of regulatory boards shall be in accordance with rules of the departments of human resources and finance and administration.  
  Members of each board, commission, or agency attached to the division of regulatory boards created under  4-3-1303 shall receive the sum of fifty dollars ($50.00) for each day actually spent in the performance of their official duties.   All reimbursement for travel expenses shall be in accordance with the comprehensive travel regulations promulgated by the department of finance and administration and approved by the attorney general and reporter.   
  With respect to any person required to be licensed, permitted, or authorized by any board, commission or agency attached to the division of regulatory boards, each respective board, commission or agency may assess a civil penalty against the person in an amount not to exceed one thousand dollars ($1,000) for each separate violation of a statute, rule or order pertaining to the board, commission or agency. Each day of continued violation constitutes a separate violation.   Each board, commission or agency shall by rule establish a schedule designating the minimum and maximum civil penalties that may be assessed under this section. In assessing civil penalties, the following factors may be considered:  Whether the amount imposed will be a substantial economic deterrent to the violator;   The circumstances leading to the violation;   The severity of the violation and the risk of harm to the public;   The economic benefits gained by the violator as a result of noncompliance; and   The interest of the public.      Civil penalties assessed pursuant to this section shall become final thirty (30) days after the date a final order of assessment is served. Payment of any civil penalty assessed after a hearing held pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, is a prerequisite to issuance or renewal of any license issued by a board, commission or agency attached to the division unless the final decision of the board, commission or agency is stayed pursuant to  4-5-322(c), or acceptable arrangements for payment of the civil penalty are made with the board, commission or agency prior to the issuance or renewal of any license issued by a board, commission or agency attached to the division.   If the violator fails to pay an assessment when it becomes final, the division may apply to the appropriate court for a judgment and seek execution of the judgment.   Jurisdiction for recovery of the penalties shall be in the chancery court of Davidson County, or the chancery court of the county in which all or part of the violations occurred.     All sums recovered pursuant to this section shall be paid into the state treasury.   
 Before submitting an estimate of its expenditure requirements as provided in  9-4-5103, the department shall consult with each board, commission, or agency that is attached to the division of regulatory boards created under  4-3-1303 and is authorized or required to collect any fees. The board, commission, or agency shall timely submit to the commissioner an itemized list of any improvements recommended for inclusion in the department's expenditure estimate. In the preparation of the estimate, the department shall clearly indicate the disposition of each improvement recommendation received under this section. The department shall transmit with its expenditure estimate a copy of each list of recommended improvements received under this section to the commissioner of finance and administration.  
  Notwithstanding any law to the contrary, all moneys collected by any board attached to the division of regulatory boards pursuant to  4-3-1304 shall be deposited in the state general fund and credited to a separate account for each board.   Disbursements from the accounts shall be made solely for the purpose of defraying expenses incurred in the implementation and enforcement of the boards' areas of regulation.   The expenses shall not be paid from any other state funds.   Funds remaining in board accounts at the end of any fiscal year shall not revert to the general fund but shall remain available for expenditure in accordance with law.   
  Notwithstanding any contrary law, the division of regulatory boards or any board, commission or agency attached to the division of regulatory boards may assess the actual and reasonable costs of the investigation, prosecution and hearing of any disciplinary action held in accordance with the contested case provisions of the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3, and in which sanctions of any kind are imposed on any person or entity required to be licensed, permitted, registered or otherwise authorized by the division or respective board, commission or agency. These costs may include, but are not limited to, those incurred and assessed for the time of the prosecuting attorneys, investigators, expert witnesses, administrative judges and any other persons involved in the investigation, prosecution and hearing of the action.   The commissioner shall promulgate rules and regulations establishing a schedule of costs that may be assessed pursuant to this section.    All costs assessed pursuant to this section shall become final thirty (30) days after the date a final order of assessment is served.   If the individual or entity disciplined fails to pay an assessment when it becomes final, the division may apply to the appropriate court for a judgment and seek execution of the judgment.   Jurisdiction for recovery of the costs shall be in the chancery court of Davidson County.     
   Upon receiving a copy of a final order as provided in subsection (b) from the Tennessee student assistance corporation (TSAC), or a guarantee agency that has an agreement with the United States secretary of education, referred to as guarantee agency in this section, each board, commission or agency, referred to as the licensing authority in this section, attached to the division of regulatory boards shall suspend, deny or revoke the license of, or take other appropriate disciplinary action against, any person who has defaulted on a repayment or service obligation under any federal family education loan program, the federal Higher Education Act of 1965 (20 U.S.C.  1001 et seq.), as amended, a student loan guaranteed or administered by TSAC, or any other state or federal educational loan or service-conditional scholarship program.   Notwithstanding subdivision (a)(1), a licensing authority may elect not to suspend, deny, or revoke the license of a person if the default or delinquency is the result of a medical hardship that prevented the person from working in the person's licensed field and the medical hardship significantly contributed to the default or delinquency.      Each board, commission, committee, agency or other governmental entity created pursuant to this title shall accept any determination of default from TSAC or a guarantee agency, after TSAC or the guarantee agency has afforded a debtor an opportunity to be heard in accordance with subdivision (b)(2); and the board, commission, committee, agency or other governmental entity shall rescind any disciplinary action and restore any license or certificate upon receiving notice from the corporation or guarantee agency that the person has agreed to serve the person's obligation or is in compliance with an approved repayment plan.    Unless a debtor has made satisfactory arrangements according to the lender, TSAC or the guarantee agency, which may include administrative wage garnishment, voluntary payment arrangements, or deferment/forbearance, then the debtor shall be regarded as delinquent or in default. If a debtor is delinquent or in default on a repayment or service obligation under a guaranteed student loan identified in subsection (a), or the debtor has failed to enter into a payment plan or comply with a payment plan previously approved by TSAC or the guarantee agency, then TSAC or the guarantee agency shall issue to the debtor a notice of intent to file an order with the appropriate licensing authority to suspend, deny or revoke the debtor's license or certificate. The notice must:   Be served upon the debtor personally or by certified mail with return receipt requested; and   State that the debtor's license or certificate will be suspended, denied or revoked ninety (90) days after service unless within that time the debtor:  Pays the entire debt stated in the notice;   Enters into a payment plan or complies with a payment plan previously entered into and approved by TSAC or the guarantee agency; or   Requests a hearing before TSAC or the guarantee agency.       The hearing request by the debtor shall be made in writing and must be received by TSAC or the guarantee agency within twenty (20) days of the date the notice is served.   TSAC or the guarantee agency, upon receipt of a request for a hearing from the debtor, shall schedule a hearing to determine whether suspension, denial or revocation of the debtor's license or certificate is appropriate. The debtor's license or certificate may not be suspended, denied or revoked until a determination is reached following the hearing. The only issues that may be determined in the hearing are:   The amount of the debt, if any;   Whether the debtor is delinquent or in default;   Whether the debtor has entered into, or the debtor is willing to enter into, a payment plan or to comply with a payment plan previously entered into and approved by TSAC or the guarantee agency; and   Whether the debtor's default or delinquency is the result of a medical hardship that prevented the debtor from working in the debtor's licensed field and the medical hardship significantly contributed to the default or delinquency.     If a debtor fails to respond to the notice of intent, fails to timely request a hearing, or fails to appear at a regularly scheduled hearing, the debtor's defenses, objections, or request for a payment plan or compliance with a payment plan may be determined to be without merit; and TSAC or the guarantee agency shall enter a final decision and order, requesting suspension, denial or revocation of the debtor's license or certificate, and further requesting the licensing authority to order the debtor to refrain from engaging in the licensed activity or activity for which a certificate has been issued. TSAC or the guarantee agency shall send a copy of the order to the licensing authority and the debtor.   The administrative hearings shall be conducted in the same manner as those conducted pursuant to  36-5-703 and 36-5-704.     When TSAC or the guarantee agency determines that the debt is paid in full or the debtor has entered into a payment plan or complied with a payment plan previously approved by TSAC or the guarantee agency, TSAC or the guarantee agency shall terminate the order suspending, denying or revoking the license or certificate. TSAC or the guarantee agency shall send a copy of the order terminating the suspension, denial or revocation to the licensing authority and the debtor. Notwithstanding any other law, rule or regulation to the contrary, when the license or certificate is reinstated, the licensing authority shall not impose a reinstatement fee that exceeds fifty dollars ($50.00).   Entry of an order terminating suspension, denial or revocation of a license or certificate does not limit the ability of TSAC or the guarantee agency to issue a new order suspending, denying or revoking the license or certificate of the same debtor in the event of another delinquency or default.     TSAC is authorized to promulgate necessary rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to implement this subsection (b).       Each board, commission or agency attached to the division of regulatory boards shall promulgate rules and regulations to effectuate the purposes of this section.   
  In addition to any other lawful disciplinary authority, any board, commission or agency attached to the division of regulatory boards may, upon receipt of a certified order, refuse to issue or renew a license, permit or authorization to practice, and revoke, suspend or restrict any license, permit or authorization to practice that the board, commission, or agency has issued to any person who:  Has had the person's license, permit or authorization to practice in the profession or occupation subject to the jurisdiction of the board, commission or agency suspended or revoked by another state or national board, commission or agency for any acts or omissions that would constitute grounds for discipline in this state; or   Has voluntarily surrendered the person's license, permit or authorization to practice in the profession or occupation that is subject to the jurisdiction of the board, commission or agency, as a result of or during the pendency of disciplinary proceedings by another state or national board, commission or agency, for any acts or omissions that would constitute grounds for discipline in this state.     The Uniform Administrative Procedures Act, compiled in title 4, chapter 5, shall govern all matters and procedures respecting the hearing and judicial review of any contested case, as defined in  4-5-102, arising under the authority of this section.   Any board, commission or agency attached to the division of regulatory boards is authorized to promulgate rules to effectuate the purposes of this section. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act.   
 Before granting certificates of authority to an insurance company to issue policies or make contracts of insurance, the commissioner shall be satisfied, by such examination and evidence as the commissioner sees fit to make and require, that the company is duly qualified under the laws of the state to transact business in the state.  
 To determine the liability upon the contracts of insurance for insurance companies doing business in this state, foreign and domestic, other than life, the commissioner shall require the companies to charge, as the liability for reinsurance of outstanding policies, fifty percent (50%) of the premiums received on policies or risks having not more than one (1) year to run, and a pro rata of all premiums received on policies or risks having more than one (1) year to run.  
 The commissioner shall allow to the credit of an insurance company in the account of its financial condition only the assets that are or can be made available for the payment of losses in the state, but may credit any deposits of funds of the company set apart as security for a particular liability, or any deposits of funds of the company that are deposited for the purpose of meeting the requirements for doing business in another state or commonwealth. The commissioner may, in the commissioner's discretion, disallow stockholders' obligations of any description as part of the assets or capital of any insurance company, unless secured by competent collateral.  
 The commissioner shall be the custodian of all collateral in the form of stock certificates, bonds, debentures, notes and other evidences of indebtedness deposited or pledged with the commissioner under any existing law, and it shall be the commissioner's official duty safely to keep, surrender and account for the collateral deposited as provided by law, and for the safekeeping of that collateral both the commissioner and the sureties on the commissioner's official bond are liable.  
  All bonds or other evidences of debt having a fixed term and rate held by any life insurance company, assessment life association, or fraternal beneficiary association, authorized to do business in this state, may, if amply secured and not in default as to principal and interest, be valued as follows:  If purchased at par, at par value; or   If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made.     The purchase shall in no case be taken at a higher figure than the actual market value at the time of purchase.   The commissioner shall have full discretion in determining the method of calculating values according to subsection (a).   
 As often as once in five (5) years, the commissioner shall, personally or by a deputy or some competent person appointed by the commissioner for that purpose, visit each insurance company licensed in this state and examine its affairs, especially as to its financial condition and ability to fulfill its obligations, and whether it has complied with the law.  
  The commissioner shall also make an examination of each insurance company licensed in this state whenever the commissioner deems it prudent to do so, or upon the request of five (5) or more of the stockholders or persons pecuniarily interested in the company, who shall make affidavit of their belief, with specifications of their reasons for the belief, that the company is in an unsound condition.   For the purpose of ascertaining financial condition or legality of conduct, the commissioner may, for good cause, make an investigation and examination, independent of any other examination of an insurer or proposed insurer, of any accounts, records, files, documents, and transactions pertaining to the business of insurance. The investigatory and examination authority shall extend to:  Any insurance agency, agent, general agent, surplus lines agent, insurance representative, or any person holding out to be an insurance agency, agent, general agent, surplus lines agent, or insurance representative;   Any person having a contract under which that person enjoys by terms or in fact the exclusive or dominant right to manage or control an insurer;   Any corporation, association, or person engaged in the business of adjusting losses, financing premiums, or furnishing insurance services in the form of administrative services only to self-insured groups;   Any other individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance; and   Any employer that self-insures its workers' compensation liabilities pursuant to  50-6-405(b) or a group of employers qualifying as self-insurers pursuant to  50-6-405(c).      The general assembly recognizes that significant cost savings will result from the implementation of this bill. It is in the best interest of the citizens of Tennessee that the cost savings be passed to the entities that have paid faithfully workers' compensation premiums in order to ensure the economic well-being of their employees. It is the intent and purpose of the general assembly that workers' compensation premiums be adjusted downward within fifteen (15) months of July 1, 2004, to reflect the cost savings resulting from the provisions of the act. If a workers' compensation policy is subject to renewal during the fifteen (15) month period, adjustments to the policy may be made at that time.   It is the intent of the general assembly that the savings of the act shall routinely be reflected in future filings through the advisory prospective loss cost filing system, pursuant to  56-5-306(b) and 50-6-402. Nothing in this section shall be construed as amending or affecting the procedures for filing and approval of rates set forth in title 56, chapter 5.  The department of insurance was at the time of the examination accredited under the National Association of Insurance Commissioners, Financial Regulation Standards and Accreditation Program; or   The examination is performed:  Under the supervision of a department of insurance so accredited; or   With the participation of one (1) or more examiners who are employed by such an accredited state department of insurance and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their department of insurance.       
 When the commissioner or the commissioner's deputy deems it prudent for the protection of policyholders in this state, the commissioner shall in like manner, visit and examine, or cause to be visited and examined by some competent person or persons the commissioner may appoint for that purpose, any foreign insurance company applying for admission to do business in this state.   In lieu of an examination under this section of any foreign or alien insurer licensed in this state, the commissioner may accept an examination report on the company as prepared by the department of insurance for the company's state of domicile or port-of-entry state until January 1, 1994. Thereafter, these reports may only be accepted if:  
  In the course of the examination, the commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of making the examination may examine:  Any insurance company transacting, or being organized to transact, business in this state;   Any corporation, association, or person engaged in or proposing to be engaged in the organization, promotion or solicitation of shares or capital contributions to, or aiding in the formation of, an insurance company;   As an incident to the examination of the insurance company itself, any corporation, association, or person holding shares of capital stock of an insurance company for the purpose of controlling the management of the insurance company as voting trustee or otherwise;   As an incident to the examination of the insurance company itself, any corporation, association, or person having a contract, written or oral, pertaining to the management or control of an insurance company as general agent, managing agent or attorney-in-fact;   As an incident to the examination of the insurance company itself, any corporation, association, or person that has substantial control, directly or indirectly, over any insurance company doing business in this state whether by ownership of its stock or otherwise, or any corporation, association, or person owning stock in any such insurance company, which stock constitutes a substantial proportion of the stock of the insurance company;   Any subsidiary or affiliate of any insurance company doing business in this state;   Any licensed agent, broker or solicitor or any corporation, association, or person making application for a license as an agent, broker or solicitor; and   Any corporation, association, or person engaged in the business of adjusting losses or financing premiums.      Every company, corporation, association, or person being examined, its officers, directors and agents, shall provide to the commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of the examination, convenient and free access at its office to all books, records, securities, documents and any and all papers relating to the property, assets, business and affairs of the company. The officers, directors and agents of the company, corporation, association or person shall facilitate the examination and aid in the examination so far as it is in their power to do so.   The commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of the examination, has the power to:  Administer oaths and to examine under oath any person relative to the business of the company; and   Appraise or cause to be appraised by competent appraisers appointed by the commissioner or such other person all property in which the company has or claims an interest or that is security in any form for the payment of any debt or obligation to the company.        The commissioner, the commissioner's deputy, or the person appointed by the commissioner for the purpose of the examination, shall make a full and true report of the examination, which shall comprise only facts ascertained from the books, papers, records, securities or documents or other evidence obtained by investigation and examined by them or ascertained from the testimony of officers or agents or other persons examined under oath concerning the business, affairs, assets and obligations of the company. The report of examination shall be verified by the oath of the examiner in charge of the examination and shall be prima facie evidence in any action or proceeding in the name of the state against the company, its officers or agents upon the facts stated in the report.   In the conduct of an examination, the criteria as set forth in the Examiners Handbook adopted by the National Association of Insurance Commissioners and the National Association of Insurance Commissioners Accounting Practices and Procedures Manuals that were in effect when the commissioner exercised discretion to make an examination under or to take other action permitted by this chapter shall be used. The commissioner may also employ other guidelines or procedures the commissioner deems appropriate.      No later than sixty (60) days following completion of the examination, the examiner in charge shall file with the department a verified written report of examination under oath. Upon receipt of the verified report, the department shall transmit the report to the company examined, together with a notice that affords the company examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report.   Within thirty (30) days of the end of the period allowed for the receipt of written submissions or rebuttals, the commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's work papers and enter an order:  Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure the violation;   Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional data, documentation or information, and refiling pursuant to subdivision (c)(2); or   Calling for an investigatory hearing with no less than twenty (20) days' notice to the company for purposes of obtaining additional documentation, data, information and testimony.     If the examination reveals that the company is operating in violation of any law, regulation or prior order, the commissioner, in the written order, may require the company to take any action the commissioner considers necessary or appropriate in accordance with the report of examination or the hearing, if any, on the report. That order shall be subject to judicial review in accordance with title 27, chapter 9.   Nothing contained in this chapter shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating to the reports or results, to the department of insurance of this or any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time, so long as the agency or office receiving the report or matters relating to the reports agrees in writing to hold it confidential and in a manner consistent with this section.     Any company, corporation, or association that, or person who, violates or aids and abets any violation of a written order issued pursuant to this section shall be punished by a fine of not more than five thousand dollars ($5,000), which shall be sued for and recovered pursuant to  56-1-802.   All working papers, recorded information, documents and copies of working papers, recorded information and documents produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this chapter must be given confidential treatment and may not be made public by the commissioner or any other person, except to the extent provided in subsection (d). Access may also be granted to the National Association of Insurance Commissioners. The parties must agree in writing prior to receiving the information to provide to it the same confidential treatment as required by this section, unless the prior written consent of the company to which it pertains has been obtained.   
 Whoever, without justifiable cause, neglects, upon due summons, to appear and testify before the commissioner, the commissioner's deputy, or person appointed by the commissioner as provided, and whoever obstructs the commissioner, the commissioner's deputy or examiner in examining insurance companies commits a Class C misdemeanor.  
   Any insurance company authorized to do business in this state and examined under the law shall pay the proper charges incurred in the examination, including the expenses of the commissioner or the commissioner's deputy, and the expenses and compensation of the commissioner's assistants employed in the examination.   The compensation of the experts, actuaries and examiners designated by the commissioner for examining the books or business of insurance companies doing business in this state shall be fixed by the commissioner at a reasonable amount commensurate with usual compensation for like services.     All persons engaging, assisting, or making the required examination under this chapter shall be regular state employees, and their entire expenses and compensation shall be paid only by the state as now provided for by law. Notwithstanding this subsection (b), the commissioner may contract, in accordance with applicable state contracting procedures, for qualified actuaries and financial examiners the commissioner deems necessary due to the unavailability of qualified regular state employees to conduct a particular examination; provided, that, with respect to financial examinations, the compensation and per diem allowances paid to the persons shall be fixed by the commissioner at a reasonable amount commensurate with usual compensation for like services.   The full cost of the examination fixed by the commissioner shall be paid into the department for its use and benefit in meeting the expenses and compensation for the persons engaged in the examinations.   
 When it appears to the commissioner that the capital stock of a domestic insurance company is impaired to the extent of twenty percent (20%) or more, the commissioner shall notify the company that its capital is legally subject to be made good; and, if the company does not, within sixty (60) days after the notice, satisfy the commissioner that it has fully repaired its capital, or reduced its capital as provided by law, the commissioner shall institute proceedings against it.  
 When the actual funds of a domestic life insurance company, exclusive of its capital, are not of a net cash value equal to its liabilities, including the net value of its policies, computed by the rule of valuation established by part 9 of this chapter, the commissioner shall notify the company and its agents to issue no new policies until its funds become equal to its liabilities.  
  The commissioner shall revoke or suspend all certificates of authority granted to the company or its agents and cause notice of revocation or suspension to be published in one (1) or more newspapers of general circulation, if the commissioner is of the opinion, upon examination or other evidence, that:  A foreign insurance company is:  In an unsound condition; or   If a life insurance company, has actual funds, exclusive of its capital, less than its liabilities; or     A foreign insurance company has:  Failed to comply with the law; or   Its officers or agents have:   Refused to submit to examination;   Refused to perform any legal obligations in relation to examinations; or   Failed to pay any final judgment against the company recovered by a Tennessee citizen.         No new business shall be done by a company or its agents under suspension or revocation while the default or disability continues, nor until its authority to do business is restored by the commissioner.   
 Unless the ground for revocation or suspension relates only to the financial condition or soundness of the company or to a deficiency in its assets, the commissioner shall notify the company no less than ten (10) days before revoking its authority to do business in this state, and the commissioner shall specify in the notice the particulars of the supposed violation.  
 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.  
  Statement of Actuarial Opinion.   On or before March 1, 2012, and annually every year thereafter, every property and casualty insurance company doing business in this state, unless otherwise exempted by the domiciliary commissioner, shall submit the opinion of an appointed actuary entitled Statement of Actuarial Opinion. This opinion shall be filed with the appropriate National Association of Insurance Commissioners (NAIC) property and casualty annual statement instructions and shall cover the activity of the prior calendar year.   Actuarial Opinion Summary.  Every property and casualty insurance company domiciled in this state that is required to submit a statement of actuarial opinion shall annually submit an actuarial opinion summary, written by the company's appointed actuary. This actuarial opinion summary shall be filed in accordance with the appropriate NAIC property and casualty annual statement instructions and shall be considered as a document supporting the actuarial opinion required in subsection (a).   A company licensed but not domiciled in this state shall provide the actuarial opinion summary upon request.     Actuarial Report and Work Papers.  An actuarial report and underlying work papers as required by the appropriate NAIC property and casualty annual statement instructions shall be prepared to support each actuarial opinion.   If the insurance company fails to provide a supporting actuarial report and/or work papers at the request of the commissioner or the commissioner determines that the supporting actuarial report or work papers provided by the insurance company is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting actuarial report or work papers.     The appointed actuary shall not be liable for damages to any person, other than the insurance company and the commissioner, for any act, error, omission, decision or conduct with respect to the actuary's opinion, except in cases of fraud or willful misconduct on the part of the appointed actuary.   
  The statement of actuarial opinion, submitted pursuant to  56-1-419, shall be provided with the annual statement in accordance with the appropriate National Association of Insurance Commissioners (NAIC) property and casualty annual statement instructions and shall be treated as a public document.    Notwithstanding  10-7-503 or any other law to the contrary, documents, materials or other information in the possession or control of the department of commerce and insurance that are considered an actuarial report, work papers or actuarial opinion summary provided in support of the opinion, and any other material provided by the company to the commissioner in connection with the actuarial report, work papers or actuarial opinion summary, shall be confidential by law and privileged, shall not be subject to open records requests or sunshine laws, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.   This subsection (b) shall not be construed to limit the commissioner's authority to release the documents to the Actuarial Board for Counseling and Discipline (ABCD) so long as the material is required for the purpose of professional disciplinary proceedings and that the ABCD establishes procedures satisfactory to the commissioner for preserving the confidentiality of the documents, nor shall this section be construed to limit the commissioner's authority to use the documents, materials or other information in furtherance of any regulatory or legal action brought as part of the commissioner's official duties.     Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (b).   In order to assist in the performance of the commissioner's duties, the commissioner:  May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (b) with other state, federal and international regulatory agencies, with NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, provided that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information and has the legal authority to maintain confidentiality;   May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and   May enter into agreements governing sharing and use of information consistent with subsections (b)-(d).     No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (d).   
  Upon request, the commissioner shall in December each year furnish to domestic insurance companies two (2) blanks in the form adopted by rule for their annual statement.   All companies authorized to do business under Chapters 2 14-16, 18-21, 23, 24, 26-31 and 35 of this title shall annually, on or before March 1, file in the office of the commissioner an annual statement in the form adopted for use by companies, by class of business authorized, which statement shall exhibit its financial condition on December 31 of the previous year, and its business of that year, which statement shall be completed and filed in accordance with annual statement instructions established by the commissioner.   The assets and liabilities shall be computed and allowed in the statement in accordance with this chapter and Chapters 2 3, 14-16, 18-21, 23, 24, 26-31 and 35 of this title, as applicable to the company making the filing.   The commissioner is authorized to promulgate rules to require that the statement contains the opinion by a qualified actuary or loss reserve specialist on all policy claim reserves, and loss adjustment expense reserves for all insurers on an annual basis. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   The statement shall be subscribed and sworn to by the president and secretary, or in their absence, by two (2) of the company's principal officers.   The annual statement of a company of a foreign country shall embrace only its business and condition in the United States, and shall be subscribed and sworn to by its resident manager or principal representative in charge of its United States business.   Financial statements or information required by this part shall be prepared in accordance with the National Association of Insurance Commissioners Accounting Practices and Procedures Manual in effect for the period covered by the report.    The commissioner is authorized to promulgate rules to require that all companies authorized to do business in this state file audited financial reports by independent certified public accountants annually, on or before June 1 for the year ended December 31 immediately preceding.   Any determination by the independent certified public accountant that an insurer has materially misstated its financial condition as reported to the commissioner, or that an insurer does not meet the minimum capital and surplus requirements of this title, shall be reported as set out in the rules promulgated pursuant to this section. No independent certified public accountant shall be liable in any manner to any person for any statement made in connection with this report of adverse financial condition if such statement is made in good faith in compliance with this section and the rules promulgated pursuant to this section.     The commissioner is authorized to promulgate by rule the manner in which filing of annual statements and payment of annual filing fees may be filed with the commissioner. The rules may include the acceptance of electronic filings and electronic payments. The commissioner is also authorized to promulgate rules that provide for a convenience fee to cover the cost of accepting electronic filings and electronic payments. Any fee set by rule under the authority of this subsection (i) may be assessed in addition to the fee or fees assessed for the cost of accepting filings or payments. In no event shall the convenience fee exceed the actual costs incurred by the department in accepting electronic filings or electronic payments.   
 Any insurance company that neglects to make and file its annual statement in the form and within the time provided by  56-1-501 shall forfeit one hundred dollars ($100) for each day neglected, and, upon notice by the commissioner to that effect, its authority to do new business shall cease while the default continues.  
  For willfully making a false annual or other statement it is required by law to make, an insurance company, and persons making oath to or subscribing to the statement, shall be severally punished by a fine of not less than five hundred dollars ($500) nor more than one thousand dollars ($1,000).   Any person making oath to the false statement commits perjury.   
  The commissioner shall preserve in a permanent form a record of the commissioner's proceedings, including a concise statement of the result of official examinations of insurance companies.   The commissioner shall, annually, and as early as consistent with full and accurate preparation, make a report to the governor of all official transactions, and shall include in the report a statement of the receipts and expenditures of the department for the preceding year, an exhibit of the financial condition and business transactions of the several insurance companies as disclosed by their annual statements, abstracts of which statements shall appear in the report, and other information and comments in relation to insurance and the public interest in insurance the commissioner deems fit to communicate.   
  The records of the department shall, at all times, be open to the inspection of the public, subject to rules made by the commissioner for their safekeeping, free from any charge whatever.   The commissioner shall, on demand, furnish certified copies of any paper, report, or document on file in the commissioner's office to any person requesting them, upon payment of the fee allowed by law.   
 The commissioner, with the approval of the governor, shall devise a seal, with suitable inscription, for the department, a description of which, with a certificate of approval by the governor, together with an impression of the seal, shall be filed in the office of the secretary of state, and may be renewed whenever necessary.  
 Every certificate, assignment, or conveyance executed by the commissioner or the commissioner's chief deputy, relating to the business of insurance companies, in pursuance of authority conferred by law, and sealed with the seal of office, shall be recorded in the proper recording office in the same manner and with the same effect as a deed regularly acknowledged or proved before an officer authorized by law to take the proof or acknowledgment of deeds, and all copies of papers in the office of the department, certified by the commissioner or the chief deputy, and authenticated by the seal, shall in all cases be evidence equally and in like manner with the original.  
 A violation of this chapter and Chapters 2 4, 7, 11 and 32 of this title, the penalty of which is not specifically provided, is a Class C misdemeanor.  
  Every penalty fixed in this title, unless otherwise provided for, shall be sued for and recovered in the name of the state by the district attorney general of the district in which the delinquency occurs, and shall be paid into the state treasury.   Nonpayment of the penalties is a Class C misdemeanor.   
  This part shall be known and may be cited as the Standard Valuation Law.   For purposes of this part, the following definitions shall apply on or after the operative date of the valuation manual:  Accident and health insurance contracts means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness or medical conditions and as may be specified in the valuation manual;   Appointed actuary means a qualified actuary who is appointed in accordance with the valuation manual to prepare the actuarial opinion required in  56-1-903;   Company means an entity that:  Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in this state and has at least one (1) such policy in force or on claim; or   Has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance or deposit-type contracts in this state;     Deposit-type contract means contracts that do not incorporate mortality or morbidity risks, and as may be specified in the valuation manual;   Life insurance means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and as may be specified in the valuation manual;   NAIC means the National Association of Insurance Commissioners;   Policyholder behavior means any action a policyholder, contract holder or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract subject to this part including, but not limited to, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization or benefit elections prescribed by the policy or contract but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract;   Principle-based valuation means a reserve valuation that uses one (1) or more methods or one (1) or more assumptions determined by the insurer and is required to comply with  56-1-915 as specified in the valuation manual;   Qualified actuary means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries' qualification standards for actuaries signing such statements and who meets the requirements specified in the valuation manual;   Tail risk means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude; and   Valuation manual means the manual of valuation instructions adopted by the NAIC as specified in this part or as subsequently amended.     
  For policies and contracts issued prior to the operative date of the valuation manual:  The commissioner shall annually value, or cause to be valued, the reserve liabilities (reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurance company doing business in this state issued on or after January 1, 1962, and prior to the operative date of the valuation manual. In calculating reserves, the commissioner may use group methods and approximate averages for fractions of a year or otherwise. In lieu of the valuation of the reserves required of a foreign or alien company, the commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this part.   Sections 56-1-904  56-1-913 shall apply to all policies and contracts, as appropriate, subject to this part issued on or after January 1, 1962, and prior to the operative date of the valuation manual and the provisions set forth in  56-1-914 and 56-1-915 shall not apply to any such policies and contracts.   The minimum standard for the valuation of policies and contracts issued prior to January 1, 1962, shall be that provided by the laws in effect immediately prior to that date.     For policies and contracts issued on or after the operative date of the valuation manual:  The commissioner shall annually value, or cause to be valued, the reserves for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the operative date of the valuation manual. In lieu of the valuation of the reserves required of a foreign or alien company, the commissioner may accept a valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this part; and   Sections 56-1-914 and 56-1-915 shall apply to all policies and contracts issued on or after the operative date of the valuation manual.     
  For an actuarial opinion prior to the operative date of the valuation manual:  Every life insurance company doing business in this state shall annually submit the opinion of a qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The commissioner shall define by regulation the specifics of this opinion and add any other items deemed to be necessary to its scope;   For actuarial analysis of reserves and assets supporting reserves:  Every life insurance company, except as exempted by regulation, shall also annually include in the opinion required by subdivision (a)(1), an opinion of the same qualified actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified by the commissioner by regulation, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including, but not limited to, the benefits under, and expenses associated with, the policies and contracts;   The commissioner may provide by regulation for a transition period for establishing any higher reserves that the qualified actuary may deem necessary in order to render the opinion required by this section;     Each opinion required by subdivision (a)(2) shall be governed by the following provisions:  A memorandum, in form and substance acceptable to the commissioner as specified by regulation, shall be prepared to support each actuarial opinion;   If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified by regulation or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by regulations promulgated by the commissioner or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner;     Every opinion required by this subsection (a) shall be governed by the following provisions:  The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after December 31, 1995;   The opinion shall apply to all business in force including individual and group health insurance plans, in form and substance acceptable to the commissioner as specified by regulation;   The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board and on such additional standards as the commissioner prescribes by regulation;   In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state;   For purposes of this section, qualified actuary means a member in good standing of the American Academy of Actuaries who meets the requirements set forth in the regulation;   Except in cases of fraud or willful misconduct, the qualified actuary shall not be liable for damages to any person, other than the insurance company and the commissioner, for any act, error, omission, decision or conduct with respect to the actuary's opinion;   Disciplinary action by the commissioner against the company or the qualified actuary shall be defined in regulations promulgated by the commissioner;   Except as provided in subdivisions (a)(4)(L)-(N), documents, materials or other information in the possession or control of the department that are a memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection with the memorandum, shall be confidential by law and privileged, shall not be subject to  10-7-501 or  56-1-602, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties;   Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subdivision (a)(4)(H);   In order to assist in the performance of the commissioner's duties, the commissioner may:   Share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subdivision (a)(4)(H) with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;   Receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and   Enter into agreements governing sharing and use of information consistent with subdivisions (a)(4)(H)-(J);     No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subdivision (a)(4)(J);   A memorandum in support of the opinion, and any other material provided by the company to the commissioner in connection with the memorandum, may be subject to subpoena for the purpose of defending an action seeking damages from the actuary submitting the memorandum by reason of an action required by this section or by regulation;   The memorandum or other material may otherwise be released by the commissioner with the written consent of the company or to the American Academy of Actuaries upon request stating that the memorandum or other material is required for the purpose of professional disciplinary proceedings and setting forth procedures satisfactory to the commissioner for preserving the confidentiality of the memorandum or other material; and   Once any portion of the confidential memorandum is cited by the company in its marketing or is cited before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of the confidential memorandum shall be no longer confidential.       For an actuarial opinion of reserves after the operative date of the valuation manual:  Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this state and subject to regulation by the commissioner shall annually submit the opinion of the appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts are computed appropriately, are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts and comply with applicable laws of this state. The valuation manual will prescribe the specifics of this opinion including any items deemed to be necessary to its scope;   For actuarial analysis of reserves and assets supporting reserves, every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in this state and subject to regulation by the commissioner, except as exempted in the valuation manual, shall also annually include in the opinion required by subdivision (b)(1), an opinion of the same appointed actuary as to whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including, but not limited to, the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision for the company's obligations under the policies and contracts, including, but not limited to, the benefits under, and expenses associated with, the policies and contracts;   Each opinion required by subdivision (b)(2) shall be governed by the following provisions:  A memorandum, in form and substance as specified in the valuation manual, and acceptable to the commissioner, shall be prepared to support each actuarial opinion; and   If the insurance company fails to provide a supporting memorandum at the request of the commissioner within a period specified in the valuation manual or the commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the commissioner, the commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the commissioner;     Every opinion shall be governed by the following provisions:  The opinion shall be in form and substance as specified in the valuation manual and acceptable to the commissioner;   The opinion shall be submitted with the annual statement reflecting the valuation of such reserve liabilities for each year ending on or after the operative date of the valuation manual;   The opinion shall apply to all policies and contracts subject to this subsection (b), plus other actuarial liabilities as may be specified in the valuation manual;   The opinion shall be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual;   In the case of an opinion required to be submitted by a foreign or alien company, the commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in this state;   Except in cases of fraud or willful misconduct, the appointed actuary shall not be liable for damages to any person, other than the insurance company and the commissioner for any act, error, omission, decision or conduct with respect to the appointed actuary's opinion; and   Disciplinary action by the commissioner against the company or the appointed actuary shall be defined in regulations promulgated by the commissioner.       
 Except as provided in  56-1-905, 56-1-906 and 56-1-913, the minimum standard for the valuation of policies and contracts issued prior to January 1, 1962, shall be that provided by the laws in effect immediately prior to that date. Except as otherwise provided in  56-1-905, 56-1-906 and 56-1-913, the minimum standard for the valuation of all policies and contracts issued on or after January 1, 1962, shall be the commissioner's reserve valuation methods defined in  56-1-907, 56-1-908, 56-1-911 and 56-1-913, three and one half percent (3.5%) interest, or in the case of life insurance policies and contracts, other than annuity and pure endowment contracts, issued on or after May 6, 1973, four percent (4%) interest for policies issued prior to March 13, 1978, five and one half percent (5.5%) interest for single premium life insurance policies and four and one half percent (4.5%) interest for all other policies issued on or after March 13, 1978, and the following tables:   For ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in the policies: the Commissioners 1941 Standard Ordinary Mortality Table for policies issued prior to the operative date of  56-7-401(f), the Commissioners 1958 Standard Ordinary Mortality Table for policies issued on or after the operative date of  56-7-401(f) and prior to the operative date of  56-7-401(h); provided, that, for any category of policies issued on female risks, all modified net premiums and present values referred to in this part may be calculated according to an age not more than six (6) years younger than the actual age of the insured; and for policies issued on or after the operative date of  56-7-401(h):  The Commissioners 1980 Standard Ordinary Mortality Table;   At the election of the company for any one (1) or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; or   Any ordinary mortality table, adopted after 1980 by the NAIC, which is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for such policies;     For industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in the policies: the 1941 Standard Industrial Mortality Table for policies issued prior to the operative date of  56-7-401(g), and for policies issued on or after the operative date of  56-7-401(g), the Commissioners 1961 Standard Industrial Mortality Table or any industrial mortality table adopted after 1980 by the NAIC that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for the policies;   For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies: the 1937 Standard Annuity Mortality Table, or at the option of the company, the Annuity Mortality Table for 1949, Ultimate or any modification of either of these tables approved by the commissioner;   For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies: the Group Annuity Mortality Table for 1951, a modification of the table approved by the commissioner, or at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts;   For total and permanent disability benefits in or supplementary to ordinary policies or contracts: for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates adopted after 1980 by the NAIC, that are approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for those policies; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either those tables or, at the option of the company, the Class (3) Disability Table (1926); and for policies issued prior to January 1, 1961, the Class (3) Disability Table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies;   For accidental death benefits in or supplementary to policies issued on or after January 1, 1966: the 1959 Accidental Death Benefits Table or any accidental death benefits table adopted after 1980 by the NAIC that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for those policies, for policies issued on or after January 1, 1961, and prior to January 1, 1966, either that table or, at the option of the company, the Inter-Company Double Indemnity Mortality Table; and for policies issued prior to January 1, 1961, the Inter-Company Double Indemnity Mortality Table. Either table shall be combined with a mortality table for calculating the reserves for life insurance policies; and   For group life insurance, life insurance issued on the substandard basis and other special benefits: tables approved by the commissioner.   
  Except as provided in  56-1-906, the minimum standard of valuation for individual annuity and pure endowment contracts issued on or after the operative date of this section and for annuities and pure endowments purchased on or after the operative date under group annuity and pure endowment contracts, shall be the commissioner's reserve valuation methods defined in  56-1-907 and 56-1-908 and the following tables and interest rates:  For individual annuity and pure endowment contracts issued prior to March 13, 1978, excluding any disability and accidental death benefits in those contracts: the 1971 Individual Annuity Mortality Table, or any modification of this table approved by the commissioner, and six percent (6%) interest for single premium immediate annuity contracts and four percent (4%) interest for all other individual annuity and pure endowment contracts;   For individual single premium immediate annuity contracts issued on or after March 13, 1978, excluding any disability and accidental death benefits in those contracts: the 1971 Individual Annuity Mortality Table or any individual annuity mortality table adopted after 1980 by the NAIC that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for these contracts, or any modification of these tables approved by the commissioner, and seven and one half percent (7.5%) interest;   For individual annuity and pure endowment contracts issued on or after March 13, 1978, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in those contracts: the 1971 Individual Annuity Mortality Table or any individual annuity mortality table adopted after 1980 by the NAIC that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for those contracts, or any modification of these tables approved by the commissioner, and five and one half percent (5.5%) interest for single premium deferred annuity and pure endowment contracts and four and one half percent (4.5%) interest for all other individual annuity and pure endowment contracts;   For annuities and pure endowments purchased prior to March 13, 1978, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under those contracts: the 1971 Group Annuity Mortality Table or any modification of this table approved by the commissioner, and six percent (6%) interest; and   For annuities and pure endowments purchased on or after March 13, 1978, under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under those contracts: the 1971 Group Annuity Mortality Table, or any group annuity mortality table adopted after 1980 by the NAIC that is approved by regulation promulgated by the commissioner for use in determining the minimum standard of valuation for annuities and pure endowments, or any modification of these tables approved by the commissioner, and seven and one half percent (7.5%) interest.     After May 6, 1973, any company may file with the commissioner a written notice of its election to comply with this section after a specified date before January 1, 1979, which shall be the operative date of this section for that company. If a company makes no election, the operative date of this section for that company shall be January 1, 1979.   
  The interest rates used in determining the minimum standard for the valuation of the following shall be the calendar year statutory valuation interest rates as defined in this section:  Life insurance policies issued in a particular calendar year, on or after the operative date of  56-7-401(h);   Individual annuity and pure endowment contracts issued in a particular calendar year, on or after January 1, 1983;   Annuities and pure endowments purchased in a particular calendar year, on or after January 1, 1983, under group annuity and pure endowment contracts; and   The net increase, if any, in a particular calendar year after January 1, 1983, in amounts held under guaranteed interest contracts.     For calendar year statutory valuation interest rates:  The calendar year statutory valuation interest rates, I , shall be determined as follows and the results rounded to the nearer one-quarter of one percent (0.25%), where R1 is the lesser of R and 0.09, R2 is the greater of R and 0.09, R is the reference interest rate defined in this section, and W is the weighting factor defined in this section:  For life insurance:  (Click here to view Equation)    For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options:  (Click here to view Equation)    For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subdivision (b)(1)(B), the formula for life insurance in subdivision (b)(1)(A) shall apply to annuities and guaranteed interest contracts with guarantee durations in excess of ten (10) years and the formula for single premium immediate annuities in subdivision (b)(1)(B) shall apply to annuities and guaranteed interest contracts with guarantee duration of ten (10) years or less;   For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities in subdivision (b)(1)(B) shall apply;   For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities in subdivision (b)(1)(B) shall apply;      However, if the calendar year statutory valuation interest rate for a life insurance policy issued in any calendar year determined without reference to this subdivision (b)(2)(A) differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than one half of one percent (0.5%), the calendar year statutory valuation interest rate for the life insurance policies shall be equal to the corresponding actual rate for the immediately preceding calendar year;   For purposes of applying subdivision (b)(2)(A), the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year shall be determined for 1980, using the reference interest rate defined in 1979, and shall be determined for each subsequent calendar year regardless of when  56-7-401(h) becomes operative;       The weighting factors referred to in the formulas described in subsection (b) are given in the following tables:   Weighting factors for life insurance:  Guarantee   Duration Weighting   Years   Factors   10 or less  0.50   More than 10, but not more than 20    0.45   More than 20        0.35    For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy;     Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: 0.80;   Weighting factors for other annuities and for guaranteed interest contracts, except as provided in subdivision (c)(2), shall be as specified in subdivisions (c)(3)(A), (B) and (C), according to the rules and definitions in subdivisions (c)(3)(D), (E) and (F):  For annuities and guaranteed interest contracts valued on an issue year basis:  Guarantee   Weighting Factor   A     B     C   Duration     For Plan Type   5 or less: 0.80    0.60    0.50   More than 5,   but not more than 10:   0.75    0.60    0.50   More than 10,   but not more than 20:   0.65    0.50   0.45   More than 20:      0.45    0.35  0.35    For annuities and guaranteed interest contracts valued on a change in fund basis, the factors in subdivision (c)(3)(A) increased by:  For Plan Type   A     B     C   0.15    0.25    0.05    For annuities and guaranteed interest contracts valued on an issue year basis, other than those with no cash settlement options, that do not guarantee interest on considerations received more than one (1) year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis that do not guarantee interest rates on considerations received more than twelve (12) months beyond the valuation date, the factors in subdivision (c)(3)(A) or derived in subdivision (c)(3)(B) increased by:  For Plan Type   A     B     C   0.05    0.05    0.05    For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of twenty (20) years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence.   Plan type as used in subdivisions (c)(3)(A)-(C) is defined as follows:   Plan Type A: At any time policyholder may withdraw funds only:  With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company;   Without an adjustment but installments over five (5) years or more;   As an immediate life annuity; or   No withdrawal permitted;     Plan Type B: Before expiration of the interest rate guarantee, policyholder may withdraw funds only:  With an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company;   Without an adjustment but in installments over five (5) years or more;   No withdrawal permitted; or   At the end of interest rate guarantee, funds may be withdrawn without an adjustment in a single sum or installments over less than five (5) years;     Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five (5) years either:  Without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company; or   Subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund.         A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis.   As used in this section, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract, and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund.         The reference interest rate referred to in subsection (b) means:  For life insurance, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;   For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;   For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision (d)(2), with guarantee duration in excess of ten (10) years, the lesser of the average over a period of thirty-six (36) months and the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;   For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subdivision (d)(2), with guarantee duration of ten (10) years or less, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.;   For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of twelve (12) months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.; or   For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in subdivision (d)(2), the average over a period of twelve (12) months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moody's Investors Service, Inc.     For alternative method for determining reference interest rates, in the event that the monthly average of the composite yield on seasoned corporate bonds is no longer published by Moody's Investors Service, Inc., or in the event that the NAIC determines that the monthly average of the composite yield on seasoned corporate bonds as published by Moody's Investors Service, Inc., is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate adopted by the NAIC and approved by regulations promulgated by the commissioner may be substituted.   
  Except as otherwise provided in  56-1-908, 56-1-911 and 56-1-913, reserves according to the commissioner's reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, shall be the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by those policies, over the then present value of any future modified net premiums therefore. The modified net premiums for a policy shall be the uniform percentage of the respective contract premiums for the benefits such that the present value, at the date of issue of the policy, of all modified net premiums shall be equal to the sum of the then present value of the benefits provided for by the policy and the excess of subdivision (a)(1) over subdivision (a)(2), as follows:  A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one (1) per annum payable on the first and each subsequent anniversary of the policy on which a premium falls due. However, the net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan for insurance of the same amount at an age one (1) year higher than the age at issue of the policy;   A net one-year term premium for the benefits provided for in the first policy year.     For a life insurance policy issued on or after January 1, 1986, for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value or a combination in an amount greater than the excess premium, the reserve according to the commissioner's reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined in this part as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium shall, except as otherwise provided in  56-1-911, be the greater of the reserve as of the policy anniversary calculated as described in subsection (a) and the reserve as of the policy anniversary calculated as described in subsection (a), but with:  The value defined in subdivision (a)(1) being reduced by fifteen percent (15%) of the amount of such excess first year premium;   All present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date;   The policy being assumed to mature on that date as an endowment; and   The cash surrender value provided on that date being considered as an endowment benefit.     In making the comparison the mortality and interest bases in  56-1-904 and 56-1-906 shall be used.   Reserves according to the commissioner's reserve valuation method shall be calculated by a method consistent with subsections (a) and (b) for:  Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums;   Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under  408 of the Internal Revenue Code (26 U.S.C.  408), as amended;   Disability and accidental death benefits in all policies and contracts; and   All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts.     
  This section shall apply to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under  408 of the Internal Revenue Code (26 U.S.C.  408), as amended.   Reserves according to the commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in the contracts, shall be the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by the contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of the contract, that become payable prior to the end of the respective contract year. The future guaranteed benefits shall be determined by using the mortality table, if any, and the interest rate, or rates, specified in the contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.   
  In no event shall a company's aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after March 13, 1978, be less than the aggregate reserves calculated in accordance with the methods set forth in  56-1-907, 56-1-908, 56-1-911 and 56-1-912 and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for the policies.   In no event shall the aggregate reserves for all policies, contracts and benefits be less than the aggregate reserves determined by the appointed actuary to be necessary to render the opinion required by  56-1-903.   
  Reserves for policies and contracts issued prior to March 13, 1978, may be calculated, at the option of the company, according to any standards that produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by the laws in effect immediately prior to March 13, 1978.   Reserves for any category of policies, contracts or benefits established by the commissioner, issued on or after March 13, 1978, may be calculated, at the option of the company, according to any standards that produce greater aggregate reserves for the category than those calculated according to the minimum standard provided in this part, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts, shall not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided in the policies or contracts.   A company, which adopts at any time a standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided under this part may adopt a lower standard of valuation with the approval of the commissioner, but not lower than the minimum provided herein; provided that, for the purposes of this section, the holding of additional reserves previously determined by the appointed actuary to be necessary to render the opinion required by  56-1-903 shall not be deemed to be the adoption of a higher standard of valuation.   
  If in any contract year the gross premium charged by a company on a policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract shall be the greater of either the reserve calculated according to the mortality table, rate of interest and method actually used for the policy or contract; or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in  56-1-904 and 56-1-906.   For a life insurance policy issued on or after January 1, 1986, for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value, or a combination, in an amount greater than the excess premium, subsection (a) shall be applied as if the method actually used in calculating the reserve for the policy were the method described in  56-1-907, without consideration of  56-1-907(b). The minimum reserve at each policy anniversary of such a policy shall be the greater of the minimum reserve calculated in accordance with  56-1-907, including  56-1-907(b), and the minimum reserve calculated in accordance with this section.   
 In the case of a plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of a plan of life insurance or annuity that is of such a nature that the minimum reserves cannot be determined by the methods described in  56-1-907, 56-1-908 and 56-1-911, the reserves that are held under the plan shall, as determined by regulations promulgated by the commissioner:   Be appropriate in relation to the benefits and the pattern of premiums for that plan; and   Be computed by a method that is consistent with the principles of this part.   
  For accident and health insurance contracts issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under  56-1-902(b).   For disability, accident and sickness, accident and health insurance contracts issued on or after January 1, 1962, and prior to the operative date of the valuation manual, the minimum standard of valuation is the standard adopted by the commissioner by regulation.   
  For policies issued on or after the operative date of the valuation manual, the standard prescribed in the valuation manual is the minimum standard of valuation required under  56-1-902(b), except as provided under subsections (e) or (g).   The operative date of the valuation manual is January 1 of the first calendar year following the first July 1 as of which all of the following have occurred:  The valuation manual has been adopted by the NAIC by an affirmative vote of at least forty-two (42) members, or three-fourths (34) of the members voting, whichever is greater;   The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by states representing greater than seventy-five percent (75%) of the direct premiums written as reported in the following annual statements submitted for 2008: life, accident and health annual statements; health annual statements; or fraternal annual statements;   The Standard Valuation Law, as amended by the NAIC in 2009, or legislation including substantially similar terms and provisions, has been enacted by at least forty-two (42) of the following fifty-five (55) jurisdictions: The fifty (50) states of the United States, American Samoa, the American Virgin Islands, the District of Columbia, Guam and Puerto Rico.     Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual shall be effective on January 1 following the date when the change to the valuation manual has been adopted by the NAIC by an affirmative vote representing:  At least three-fourths (34) of the members of the NAIC voting, but not less than a majority of the total membership; and   Members of the NAIC representing jurisdictions totaling greater than seventy-five percent (75%) of the direct premiums written as reported in the following annual statements most recently available prior to the vote in subdivision (c)(1): life, accident and health annual statements, health annual statements or fraternal annual statements.     The valuation manual shall specify all of the following:  Minimum valuation standards for and definitions of the policies or contracts subject to  56-1-902(b). Such minimum valuation standards shall be:  The commissioner's reserve valuation method for life insurance contracts, other than annuity contracts, subject to  56-1-902(b);   The commissioner's annuity reserve valuation method for annuity contracts subject to  56-1-902(b); and   Minimum reserves for all other policies or contracts subject to  56-1-902(b);     Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation in  56-1-915(a) and the minimum valuation standards consistent with those requirements; (3)  For policies and contracts subject to a principle-based valuation under  56-1-915:  Requirements for the format of reports to the commissioner under  56-1-915(b)(2) and which shall include information necessary to determine if the valuation is appropriate and in compliance with this part;   Assumptions shall be prescribed for risks over which the company does not have significant control or influence; and   Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures;  For policies not subject to a principle-based valuation under  56-1-915, the minimum valuation standard shall either:    Be consistent with the minimum standard of valuation prior to the operative date of the valuation manual; or   Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring;  Other requirements, including, but not limited to, those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls; and   The data and form of the data required under  56-1-916, with whom the data must be submitted, and may specify other requirements including data analyses and reporting of analyses.        In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the commissioner, in compliance with this part, then the company shall, with respect to such requirements, comply with minimum valuation standards prescribed by the commissioner by regulation.   The commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a company's compliance with any requirement set forth in this part. The commissioner may rely upon the opinion, regarding provisions contained within this part, of a qualified actuary engaged by the commissioner of another state, district or territory of the United States. As used in this subsection (f), engage includes employment and contracting.   The commissioner may require a company to change any assumption or method that in the opinion of the commissioner is necessary in order to comply with the requirements of the valuation manual or this part; and the company shall adjust the reserves as required by the commissioner. The commissioner may take other disciplinary action as permitted pursuant to  56-2-305 and the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
  A company shall establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual:  Quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. For policies or contracts with significant tail risk, reflects conditions appropriately adverse to quantify the tail risk;   Incorporate assumptions, risk analysis methods and financial models and management techniques that are consistent with, but not necessarily identical to, those utilized within the company's overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods;   Incorporate assumptions that are derived in one (1) of the following manners:  The assumption is prescribed in the valuation manual;   For assumptions that are not prescribed, the assumptions shall:   Be established utilizing the company's available experience to the extent it is relevant and statistically credible; or   To the extent that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience;       Provide margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve.     A company using a principle-based valuation for one (1) or more policies or contracts subject to this section as specified in the valuation manual shall:  Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual;   Provide to the commissioner and the board of directors an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. Such controls shall be designed to assure that all material risks inherent in the liabilities and associated assets subject to such valuation are included in the valuation, and that valuations are made in accordance with the valuation manual. The certification shall be based on the controls in place as of the end of the preceding calendar year;   Develop, and file with the commissioner upon request, a principle-based valuation report that complies with standards prescribed in the valuation manual.     A principle-based valuation may include a prescribed formulaic reserve component.   
 A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual.  
  For purposes of this section, confidential information means:  A memorandum in support of an opinion submitted under  56-1-903 and any other documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such memorandum;   All documents, materials and other information, including, but not limited to, all working papers and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in the course of an examination made under  56-1-914(f); provided, however, that if an examination report or other material prepared in connection with an examination made under  56-1-411 is not held as private and confidential information under  56-1-411, an examination report or other material prepared in connection with an examination made under  56-1-914(f) shall not be confidential information to the same extent as if such examination report or other material had been prepared under  56-1-411;   Any reports, documents, materials and other information developed by a company in support of, or in connection with, an annual certification by the company under  56-1-915(b)(2) evaluating the effectiveness of the company's internal controls with respect to a principle-based valuation and any other documents, materials and other information, including, but not limited to, all working papers and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such reports, documents, materials and other information;   Any principle-based valuation report developed under  56-1-915(b)(3) and any other documents, materials and other information, including, but not limited to, all working papers and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such report; and   Any documents, materials, data and other information submitted by a company under  56-1-916, collectively, experience data, and any other documents, materials, data and other information, including, but not limited to, all working papers, and copies thereof, created or produced in connection with such experience data, in each case that include any potentially company-identifying or personally identifiable information, that is provided to or obtained by the commissioner (together with any experience data, the experience materials) and any other documents, materials, data and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the commissioner or any other person in connection with such experience materials.     For privilege for, and confidentiality of, confidential information:  Except as provided in this section, a company's confidential information is confidential by law and privileged, and shall not be subject to  10-7-503 or  56-1-602, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action; provided, however, that the commissioner is authorized to use the confidential information in the furtherance of any regulatory or legal action brought against the company as a part of the commissioner's official duties;   Neither the commissioner nor any person who received confidential information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential information;   In order to assist in the performance of the commissioner's duties, the commissioner may share confidential information:  With other state, federal and international regulatory agencies and with the NAIC and its affiliates and subsidiaries;   In the case of confidential information specified in subdivisions (a)(1) and (4) only, with the Actuarial Board for Counseling and Discipline or its successor upon request stating that the confidential information is required for the purpose of professional disciplinary proceedings and with state, federal and international law enforcement officials; and   Provided that such recipient agrees, and has the legal authority to agree, to maintain the confidentiality and privileged status of such documents, materials, data and other information in the same manner and to the same extent as required for the commissioner;     The commissioner may receive documents, materials, data and other information, including otherwise confidential and privileged documents, materials, data or information, from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information;   The commissioner may enter into agreements governing sharing and use of information consistent with this subsection (b);   No waiver of any applicable privilege or claim of confidentiality in the confidential information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subdivision (b)(3);   A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection (b) shall be available and enforced in any proceeding in, and in any court of, this state;   In this section, regulatory agency, law enforcement agency and NAIC include, but are not limited to, their employees, agents, consultants and contractors.     Notwithstanding subsection (b), any confidential information specified in subdivisions (a)(1) and (4):  May be subject to subpoena for the purpose of defending an action seeking damages from the appointed actuary submitting the related memorandum in support of an opinion submitted under  56-1-903 or principle-based valuation report developed under  56-1-915(b)(3) by reason of an action required pursuant to this part or by regulations promulgated by the commissioner;   May otherwise be released by the commissioner with the written consent of the company; and   Once any portion of a memorandum in support of an opinion submitted under  56-1-903 or a principle-based valuation report developed under  56-1-915(b)(3) is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of such memorandum or report shall no longer be confidential.     
  The commissioner may exempt specific product forms or product lines of a domestic company that is licensed and doing business only in this state from  56-1-914; provided, that:  The commissioner has issued an exemption in writing to the company and has not subsequently revoked the exemption in writing; and   The company computes reserves using assumptions and methods used prior to the operative date of the valuation manual in addition to any requirements established by the commissioner and promulgated by regulation.     For any company granted an exemption under this section,  56-1-903  56-1-913 shall be applicable. With respect to any company applying this exemption, any reference to  56-1-914 found in  56-1-903  56-1-913 shall not be applicable.   
 To the extent that this part conflicts with or is inconsistent with any law, this part shall control. This part shall apply to policies and contracts issued on or after January 1, 1962.  
 By complying with this chapter, a domestic stock insurance company, referred to in this chapter as the domestic company, may effect:   A merger or consolidation with one (1) or more domestic stock insurance companies, or with one (1) or more foreign stock insurance companies, if the merger or consolidation is authorized by the laws of the state under which each such foreign company is organized; or   An exchange of all the outstanding stock of its shareholders with a domestic stock corporation, or with a foreign stock corporation authorized to do business in this state, if the exchange is authorized by the laws of the state under which the foreign corporation is organized, the domestic or foreign corporation being referred to in this chapter as the acquiring corporation, which acquiring corporation pays or provides the following consideration:  Shares of stock or other securities issued by the acquiring corporation;   Cash;   Other consideration; or   Any combination of such stock or other securities, cash or other consideration.     
 The constituent insurance companies may adopt a plan of merger or consolidation, or the domestic insurance company and the acquiring corporation may adopt a plan of exchange of stock, as provided in  56-10-103  56-10-106.  
  The board of directors of each such corporation shall adopt a resolution approved by a majority of the whole board setting forth the proposed plan of merger, consolidation or exchange, and directing that it be submitted to a vote at a meeting of shareholders, which may be either an annual or a special meeting. The plan shall set forth:  The name of each corporation that is a party to the plan and, if the name of any of them has been changed, the name under which it was formed; and the name of the surviving corporation or the name, or the method of determining the name, of the consolidated corporation;   The terms and conditions of the proposed merger, consolidation or exchange of stock;   The manner and basis of carrying the merger, consolidation or exchange into effect; and   In the case of a merger, a statement of any amendments or changes in the charter of the surviving corporation to be effected by the merger; or in the case of a consolidation, all statements required to be included in the charter for a new corporation formed pursuant to title 48, chapter 12 or chapter 52, as applicable.     No director, officer, agent or employee of any such corporation shall receive any fee, commission, compensation or other valuable consideration whatsoever for in any manner aiding, promoting or assisting in the adoption or approval of the plan except as specifically set forth in the plan.   
  The constituent corporations in the case of a merger or consolidation, or the domestic company and the acquiring corporation in the case of an exchange of stock, shall then submit to the commissioner three (3) copies of the proposed plan certified by the president or a vice president of each as having been adopted by its board of directors in accordance with  56-10-103, together with:  Financial statements of the constituent corporations, or of the domestic company and the acquiring corporation, for its last preceding fiscal year;   Pro forma financial statements of each such corporation based on the assumption that the plan was effective as proposed at the end of the last preceding fiscal year of the domestic company;   An estimate of expenses already incurred and of expenses expected to be incurred in connection with the proposed plan;   A written statement that sets forth for each such corporation the proposed changes, if any, in management policies and in the identity of its officers and directors, which are initially contemplated should the plan be effected as proposed;   A nonrefundable fee in an amount that the commissioner shall by rule establish; and   Any other information that the commissioner may require with respect to the plan.      The commissioner shall hold a public hearing upon the terms, conditions and provisions of the proposed plan of merger, consolidation or exchange to determine if it is reasonable, fair and in the public interest. At the hearing, the shareholders and the policyholders of each such corporation, and any other interested parties, shall have the right to appear and to become parties to the proceeding.   The hearing shall be commenced not less than thirty (30) days after the date on which the plan is submitted to the commissioner. The hearing shall be held at the place, date and time that the commissioner specifies. Notice of the hearing shall be published in a newspaper having general circulation in the city or cities wherein are located the principal office of each corporation that is a party to the plan, once a week for two (2) successive weeks, the last publication of the notice to be not more than two (2) weeks prior to the hearing date. Written notice of the hearing shall be mailed at least ten (10) days prior to the hearing by each such corporation to each of their respective shareholders. All expenses of publication shall be borne as specified in the plan.     The commissioner shall issue a written order approving the plan as submitted to the commissioner, including any modifications that a majority of the whole board of directors of each corporation that is a party to the plan approves, if the commissioner finds that:  The plan, including all modifications, if effected, will not tend to affect adversely the financial stability, management, general capacity, or intention to continue the safe and prudent transaction of insurance business of any domestic insurance company that is a party to the plan;   The fulfillment of the plan will not affect either the contractual obligations of any domestic insurance company that is a party to the plan to its policyholders, or the ability and tendency of the company to render service to its policyholders in the future; and   The terms and conditions of the plan are consistent with law and are fair and reasonable.     The order of the commissioner approving or disapproving the plan shall be filed in conformity with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, within sixty (60) days after the date the plan is submitted to the commissioner. The commissioner shall give notice of the order to all parties to the proceeding and shall deliver copies thereof to each corporation that is a party to the plan. Any party to the proceeding aggrieved by the order shall be entitled to a judicial review thereof in accordance with provisions of title 27, chapter 9.   
 The plan as approved by the commissioner shall then be submitted to a vote of the shareholders of each corporation that is a party to the plan at an annual or special meeting of the shareholders. Written notice of the meeting shall be given in the manner required by  48-17-105, shall state the right of a shareholder to dissent and receive fair value for the shareholder's shares, and shall contain a copy or summary of the plan of merger, consolidation, or exchange. The plan shall be approved upon receiving the affirmative votes of the holders of at least two thirds (2/3) of the outstanding shares of capital stock of each such corporation or of such larger proportion of shares as may be specified in the plan. Notwithstanding the approval, and at any time prior to the effective date of the plan as provided in  56-10-109, the plan may be abandoned pursuant to provisions therefor, if any, set forth in the plan.  
  If one (1) or more of the constituent corporations to a merger or consolidation is a foreign corporation, the merger or consolidation shall be carried out in the following manner:  Each domestic corporation shall comply with this chapter with respect to the merger or consolidation of domestic companies, and each foreign corporation shall comply with the applicable provisions of the laws of the state under which it is organized; and   If the surviving or new corporation is to be governed by the laws of any state other than this state, it shall comply with  48-25-101  48-25-305 with respect to foreign corporations, if it is to transact business or to conduct affairs in this state, and in every case shall file with the secretary of state of this state:  An agreement that it may be served with process in this state in any proceeding for the enforcement of any obligation of any domestic corporation that is a party to the merger or consolidation and in any proceeding for the enforcement of the rights of a dissenting shareholder of any such domestic corporation against the surviving or consolidated corporation, and an irrevocable appointment of the secretary of state of this state as its agent to accept service of process in any such proceeding; and   An agreement that it will promptly pay to the dissenting shareholders of any such domestic corporation the amount, if any, to which they shall be entitled under  56-10-110.       The effect of the merger or consolidation shall be the same as in the case of the merger or consolidation of domestic corporations, except insofar as the laws of the state governing the surviving or consolidated company provide otherwise.   In the case of an exchange of securities, if the acquiring corporation is a foreign corporation, then the corporation shall comply with the applicable provisions of the laws of the state under which it is organized. The foreign acquiring corporation shall also procure a certificate of authority to transact business and conduct affairs in Tennessee pursuant to  48-25-101  48-25-305 and shall comply with all the law of this state relating to foreign corporations. The effect of the exchange of securities shall be as provided by this chapter, except insofar as the laws of the state under which the foreign acquiring corporation is organized provide otherwise.   
  After the plan of merger or consolidation is approved by the shareholders of each constituent corporation, appropriate articles of merger or consolidation shall be executed by the president or any vice president and the secretary or any assistant secretary of each such corporation and filed in triplicate with the commissioner. If the articles of merger or consolidation show that the plan of merger or consolidation has been duly approved by the shareholders of each constituent corporation, as required in  56-10-105, and otherwise conforms to the law, the commissioner shall endorse approval on each copy of the articles, shall record one (1) copy in the commissioner's office as provided in  56-1-604, and shall return the other two (2) copies to the domestic company for filing and recording with the secretary of state and the register of that county in which the surviving or consolidated company has its principal office, in the same manner as provided for certificates of incorporation.   After the plan of exchange of stock is approved by the shareholders of the domestic company and the acquiring corporation, an appropriate agreement of exchange shall be executed by the president or any vice president and the secretary or any assistant secretary of each such corporation and filed in triplicate with the commissioner. If the agreement shows that the plan of exchange has been duly approved by the shareholders of the domestic company and the acquiring corporation as required by  56-10-105 and otherwise conforms to the law, the commissioner shall endorse approval on each copy thereof, shall record one (1) copy in the commissioner's office, as provided in  56-1-604, and shall return one (1) copy to the domestic company and to the acquiring corporation.   
 If the domestic company owns at least ninety percent (90%) of the outstanding shares of another domestic or foreign stock insurance company, it may merge the other company into itself without approval by a vote of the shareholders of either company in accordance with  48-21-102. In the event, the approval of the commissioner shall be obtained in the manner specified in  56-10-104.  
  The effect of the merger or consolidation shall be as provided in  48-21-108.   The plan of exchange and the issuance and exchange of securities provided for therein shall become effective when the agreement of exchange has been recorded by the commissioner, or upon such later date as may be specified in the agreement, which may not be later than thirty (30) days after the recording. Upon the plan of exchange becoming effective, the issuance and exchange of securities provided for therein shall be deemed to have been consummated, each shareholder of the domestic company shall cease to be a shareholder of the company and the ownership of all shares of the issued and outstanding stock of the domestic company shall vest in the acquiring corporation automatically without any physical transfer or deposit of certificates representing the shares.   Certificates representing shares of stock of the domestic company prior to the plan of exchange becoming effective shall, after the plan of exchange becomes effective, represent:  Shares of the issued and outstanding capital stock or other securities issued by the acquiring corporation; and   The right, if any, to receive such cash or other consideration upon such terms as shall be specified in the plan of exchange. The certificates representing shares of stock of the domestic company may, after the plan of exchange becomes effective, be exchanged for shares of stock or other securities issued by the acquiring corporation or cash or other consideration or any combination thereof upon the terms as are specified in the plan of exchange.     
  Nothing in this chapter shall affect the power of the commissioner to regulate, supervise and control insurance companies to the extent of and as provided by this title, nor shall anything in this chapter be construed to authorize any insurance company to engage in any kind or kinds of insurance business not authorized by its charter, or to authorize any acquiring corporation that is not an insurance company to engage directly in the business of insurance.   Subsequent to the effective date of any plan of exchange, the commissioner, having regard to the findings stated in  56-10-104, shall have authority to require that the affairs of the domestic company be conducted in a manner as to assure the continued safe conduct and transaction of the business of insurance of the domestic company.   
 Any shareholder of any domestic stock insurance company which is a party to a merger, consolidation or exchange of securities as described in this chapter shall have the right to dissent and receive fair value for the shareholder's shares by complying with the procedure set forth in  48-23-102.  
 As used in this part, unless the context otherwise requires:   Commissioner means the commissioner of commerce and insurance;   Control means actual working control, in whatever manner exercised. If, as a result of the consummation of any acquisition, any person would own in excess of ten percent (10%) of the voting security of a domestic insurer, it shall be presumed that the person could, directly or indirectly, acquire control of the insurer. Any such presumption may be rebutted by evidence, at a hearing called by the commissioner at the request of the person against whom the presumption operates, but the presumption shall continue until a determination to the contrary is made;   Domestic insurance company means:  An insurance company incorporated under the laws of this state;   An insurance company having its principal office or place of business in this state; or   An insurance holding company system, as defined in  56-11-101, having its principal office or place of business in this state or that controls an insurance company incorporated under the laws of this state; and      A corporation shall be deemed a person; and   When two (2) or more persons act as a partnership, limited partnership, syndicate, or other group for the purposes of acquiring securities of the insurer, the group shall be deemed a person, and the information called for by  56-10-202(a)(1)-(5) shall be given with respect to each member of the group.     
  No person shall make a tender offer for, enter into any agreement to exchange securities for, or otherwise seek to acquire, any voting security of a domestic insurance company if, as a result of the consummation thereof, the person could, directly or indirectly, acquire control of the insurer, unless, at the time any form of initial offer is made to security holders, or prior to the acquisition of the securities, if no offer is involved, the person has filed with the commissioner and has sent to the insurer a statement containing the following information, and any additional information the commissioner may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders and shareholders of the insurer, or in the public interest:  The background and identity of all persons by whom or on whose behalf the acquisition is to be effected;   The source and amount of the funds or other considerations used or to be used in making the acquisition;   Any plans or proposals which the persons may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other major change in its business or corporate structure or management;   The number of shares of the security that the person proposes to acquire, and the terms of the offer or exchange, as the case may be; and   Information as to any contracts, arrangements or understandings with any party with respect to any securities of the insurer, including, but not limited to, transfer of any of the securities, option arrangements, puts or calls, or the giving or withholding of proxies, naming the party with whom the contract, arrangements or understandings have been entered into, and giving the details of the activity.     If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to this section, an amendment shall be filed immediately with the commissioner and sent immediately to the insurer setting forth the changes.   
 If any offer or agreement referred to in  56-10-202 is proposed to be made by means of a registration statement under the Securities Act of 1933 (15 U.S.C.  77a et seq.), or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934 (15 U.S.C.  78a et seq.), the person required to file the statement referred to in  56-10-202 may utilize the documents in furnishing the information called for by that statement.  
 The acquisitions referred to in  56-10-202 may be made unless the commissioner, within sixty (60) days after the statement required by  56-10-202 has been filed with the commissioner, disapproves the acquisitions; provided, that the commissioner shall have one hundred twenty (120) days within which to disapprove the acquisitions if within the sixty-day period the commissioner calls a public hearing and holds the public hearing within the one hundred twenty-day period. The commissioner shall call and hold the public hearing within the one hundred twenty-day period if requested to do so by the insurer referred to in  56-10-202 within the sixty-day period. The commissioner may disapprove the transaction if it is found that:   Upon completion of the acquisition, the domestic insurer referred to in  56-10-202 would be unable to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;   The financial condition of the acquiring person is such as might jeopardize the financial stability of the insurer, or prejudice the interests of its policyholders or, in the case of a possible acquisition of control other than by merger or consolidation, prejudice the interests of any remaining shareholders who are unaffiliated with the acquiring person;   The plans or proposals that the acquiring person has to liquidate the insurer, to sell its assets or to merge or consolidate it with any person, or to make any other major change in its business or corporate structure or management, are unfair or prejudicial to policyholders; or   The competence, experience and integrity of those persons who would control the operation of the domestic insurer referred to in  56-10-202 indicate that it would not be in the best interest of the policyholders and shareholders of the insurer or in the public interest to permit them to do so.   
 No vote by the stockholder of record, or any other party so entitled to vote, of any security acquired or to be acquired in contravention of this part shall be valid or effective. The chancery court for the county where the principal office of the corporation is located may, without limiting the generality of its authority, upon the petition of the insurer referred to in  56-10-202, order the issuance or entry of any injunction or any other order which the court deems proper to effect this part.  
  The commissioner is hereby granted authority to issue rules, regulations and orders as may be necessary to properly administer this part.   The commissioner may enforce this part and any rule, regulation or order made hereunder by appropriate application for equitable relief to the chancery court for Davidson County, which court is hereby vested with exclusive jurisdiction over such proceedings.   
 Any person aggrieved by any act of the commissioner under this part may appeal therefrom to the chancery court for Davidson County.  
  Every insurer domiciled in this state shall file a report with the commissioner disclosing material acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements unless the acquisitions and dispositions of assets or material nonrenewals, cancellations or revisions of ceded reinsurance agreements have been submitted to the commissioner for review, approval or information purposes pursuant to other provisions of the insurance laws, regulations, or other requirements.   The report required by subsection (a) is due within fifteen (15) days after the end of the calendar month in which any of the transactions listed in subsection (a) occur.   One (1) complete copy of the report, including any exhibits or other attachments, shall be filed with:  The insurance department of the insurer's state of domicile; and   The National Association of Insurance Commissioners.     All reports obtained by or disclosed to the commissioner pursuant to this part shall be given confidential treatment and shall not be subject to subpoena and shall not be made public by the commissioner, the National Association of Insurance Commissioners, or any other person, except to insurance departments of other states, without the prior written consent of the insurer to which it pertains unless the commissioner, after giving the insurer who would be affected notice and an opportunity to be heard pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, determines that the interest of policyholders, shareholders or the public will be served by publication, in which event the commissioner may publish all or any part in the manner the commissioner may deem appropriate.   
  No acquisitions or dispositions of assets need be reported pursuant to  56-10-301 if the acquisitions or dispositions are not material. For purposes of this part, a material acquisition, or the aggregate of any series of related acquisitions during any thirty-day period, or disposition, or the aggregate of any series of related dispositions during a thirty-day period, is one that is non-recurring and not in the ordinary course of business and involves more than five percent (5%) of the reporting insurer's total admitted assets as reported in its most recent statutory statement filed with the insurance department of the insurer's state of domicile.    Asset acquisitions subject to this part include every purchase, lease, exchange, merger, consolidation, succession or other acquisition other than the construction or development of real property by or for the reporting insurer or the acquisition of materials for such purpose.   Asset dispositions subject to this part include every sale, lease, exchange, merger, consolidation, mortgage, hypothecation, assignment, whether for the benefit of creditors or otherwise, abandonment, destruction or other disposition.      The following information is required to be disclosed in any report of a material acquisition or disposition of assets:  Date of the transaction;   Manner of acquisition or disposition;   Description of the assets involved;   Nature and amount of the consideration given or received;   Purpose of, or reason for, the transaction;   Manner by which the amount of consideration was determined;   Gain or loss recognized or realized as a result of the transaction; and   Name or names of the person or persons from whom the assets were acquired or to whom they were disposed.     Insurers are required to report material acquisitions and dispositions on a non-consolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves, and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement, and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer's capital and surplus.     
   No non-renewals, cancellations or revisions of ceded reinsurance agreements need be reported pursuant to  56-10-301 if the non-renewals, cancellations or revisions are not material. For purposes of this part, a material non-renewal, cancellation or revision is one that affects:  As respects property and casualty business, including accident and health business written by a property and casualty insurer:   More than fifty percent (50%) of the insurer's total ceded written premium; or   More than fifty percent (50%) of the insurer's total ceded indemnity and loss adjustment reserves.     As respects life, annuity, and accident and health business: more than fifty percent (50%) of the total reserve credit taken for business ceded, on an annualized basis, as indicated in the insurer's most recent annual statement; and   As respects either property and casualty or life, annuity, and accident and health business, either of the following events shall constitute a material revision which must be reported:   An authorized reinsurer representing more than ten percent (10%) of a total cession is replaced by one (1) or more unauthorized reinsurers; or   Previously established collateral requirements have been reduced or waived as respects one (1) or more unauthorized reinsurers representing collectively more than ten percent (10%) of a total cession.       However, no filing shall be required if:  As respects property and casualty business, including accident and health business written by a property and casualty insurer: the insurer's total ceded written premium represents, on an annualized basis, less than ten percent (10%) of its total written premium for direct and assumed business; or   As respects life, annuity, and accident and health business: the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent (10%) of the statutory reserve requirement prior to any cession.        The following information is required to be disclosed in any report of a material non-renewal, cancellation or revision of ceded reinsurance agreements:  Effective date of the non-renewal, cancellation or revision;   The description of the transaction with an identification of the initiator thereof;   Purpose of, or reason for, the transaction; and   If applicable, the identity of the replacement reinsurers.     Insurers are required to report all material non-renewals, cancellations or revisions of ceded reinsurance agreements on a non-consolidated basis unless the insurer is part of a consolidated group of insurers that utilizes a pooling arrangement or one hundred percent (100%) reinsurance agreement that affects the solvency and integrity of the insurer's reserves, and the insurer ceded substantially all of its direct and assumed business to the pool. An insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000) total direct plus assumed written premiums during a calendar year that are not subject to a pooling arrangement, and the net income of the business not subject to the pooling arrangement represents less than five percent (5%) of the insurer's capital and surplus.     
  This part shall be known and may be cited as the Insurance Holding Company System Act of 1986.   As used in this part, unless the context otherwise requires:  Affiliate of, or person affiliated with, a specific person, means a person that directly, or indirectly through one (1) or more intermediaries, controls, or is controlled by, or is under common control with, the person specified;   Commissioner means the commissioner of commerce and insurance;    Control including controlling, controlled by and under common control with means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.   Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent (10%) or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by  56-11-105(k) that control does not exist in fact. The commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect;     Enterprise Risk means any activity, circumstance, event or series of events involving one (1) or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, but not limited to, anything that would cause the insurer's Risk-Based Capital to fall into company action level as set forth in  56-46-104 or would cause the insurer to be in hazardous financial condition as set forth in Tenn. Comp. R. & Reg. 0780-01-66, as amended;   Group-wide supervisor means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the commissioner under  56-11-116(d) to have sufficient significant contacts with the internationally active insurance group;   Health maintenance organization means a health maintenance organization as defined at  56-32-102;   Health maintenance organization holding company system means two (2) or more affiliated persons, one (1) of which is a health maintenance organization. Health maintenance organization holding company system also means a corporation regulated pursuant to title 56, chapter 29, which owns or controls, either directly or indirectly, a health maintenance organization;   Insurance holding company system means two (2) or more affiliated persons, one (1) or more of which is an insurer;   Insurer has the same meaning as insurance company, as set forth in  56-1-102, except that it does not include:  Agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state;   Fraternal benefit societies;   Nonprofit medical and hospital service associations; or   Nonprofit dental service corporations;     Internationally active insurance group means an insurance holding company system that includes an insurer registered under  56-11-105 and meeting the following criteria:  Premiums are written in at least three (3) countries;   The percentage of gross premiums written outside the United States is at least ten percent (10%) of the insurance holding company system's total gross written premiums; and   Based on a three-year rolling average, the total assets of the insurance holding company system are at least fifty billion dollars ($50,000,000,000), or the total gross written premiums of the insurance holding company system are at least ten billion dollars ($10,000,000,000);     Person means an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing acting in concert, but does not include any joint venture partnership exclusively engaged in owning, managing, leasing or developing real or tangible personal property;   Securityholder of a specified person is one who owns any security of the person, including common stock, preferred stock, debt obligations and any other security convertible into or evidencing the right to acquire any of the foregoing;   Subsidiary of a specified person is an affiliate controlled by the person directly or indirectly through one (1) or more intermediaries; and   Voting security includes any security convertible into or evidencing a right to acquire a voting security.     
  Authorization.  Any domestic insurer or licensed health maintenance organization, either by itself or in cooperation with one (1) or more persons, may organize or acquire one (1) or more subsidiaries. The subsidiaries may conduct any kind of business or businesses and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer or a licensed health maintenance organization.   Additional Investment Authority.  In addition to investments in common stock, preferred stock, debt obligations and other securities permitted under all other sections of this title, a domestic insurer or licensed health maintenance organization may also:  Invest, in common stock, preferred stock, debt obligations, and other securities of one (1) or more subsidiaries, amounts which do not exceed the lesser of ten percent (10%) of the insurer's assets or fifty percent (50%) of the insurer's surplus as regards policyholders, or, with respect to health maintenance organization's, net worth; provided, that after such investments, the insurer's surplus as regards policyholders or health maintenance organizations net worth will be reasonable in relation to the insurer's or health maintenance organization's outstanding liabilities and adequate to meet its financial needs. In calculating the amount of such investments, investments in domestic or foreign insurance subsidiaries and health maintenance organizations shall be excluded, and there shall be included:  Total net moneys or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities, and   All amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities; and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation;      Invest any amount in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer; provided, that each subsidiary agrees to limit its investments in any asset so that such investments will not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in subdivision (b)(1) or in  56-3-301  56-3-307 or  56-3-401  56-3-409 applicable to the insurer.   For the purpose of this subdivision (b)(2), the total investment of the insurer includes:   Any direct investment by the insurer or health maintenance organization in an asset, and   The insurer's or health maintenance organization's proportionate share of any investment in an asset by any subsidiary of the insurer or health maintenance organization, which shall be calculated by multiplying the amount of the subsidiary's investment by the percentage of the ownership of the subsidiary;       With the approval of the commissioner, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one (1) or more subsidiaries; provided, that after the investment the insurer's surplus as regards policyholders or health maintenance organization's net worth will be reasonable in relation to the insurer's or health maintenance organization's outstanding liabilities and adequate to its financial needs.     Exemption from Investment Restrictions.  Investments in common stock, preferred stock, debt obligations or other securities of subsidiaries made pursuant to subsection (b) shall not be subject to any of the otherwise applicable restrictions or prohibitions contained in this title applicable to such investments of insurers except  56-3-303, 56-3-402, 56-3-403 and 56-3-404.   Qualification of Investment; When Determined.  Whether any investment made pursuant to subsection (b) meets the applicable requirements of subsection (b) is to be determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends.   Cessation of Control.  If an insurer ceases to control a subsidiary, it shall dispose of any investment in that subsidiary made pursuant to this section within three (3) years from the time of the cessation of control or within such further time as the commissioner may prescribe, unless at any time after the investment shall have been made, the investment shall have met the requirements for investment under any other section of this part, and the insurer has so notified the commissioner.   
   Filing Requirements.  No person other than the issuer shall make a tender offer for, or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, the person would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of the insurer, and no such person shall enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless, at the time any such offer, request, or invitation is made or any such agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, the person has filed with the commissioner and has sent to the insurer, a statement containing the information required by this section and the offer, request, invitation, agreement or acquisition has been approved by the commissioner in the manner prescribed in this part.   For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least thirty (30) days prior to the cessation of control. The commissioner shall determine those instances in which the party or parties seeking to divest or to acquire a controlling interest in an insurer will be required to file for, and obtain approval of, the transaction. The information shall remain confidential until the conclusion of the transaction unless the commissioner, in the commissioner's discretion, determines that confidential treatment will interfere with enforcement of this section. If the statement referred to above is otherwise filed, this subdivision (a)(2) shall not apply.   With respect to a transaction subject to this section, the acquiring person must also file a preacquisition notification with the commissioner, which shall contain the information set forth in  56-11-104(c)(1). A failure to file the notification may be subject to penalties specified in  56-11-104(e)(3).   As used in this section, domestic insurer includes any person controlling a domestic insurer unless the person as determined by the commissioner is either directly or through its affiliates primarily engaged in business other than the business of insurance.   For the purposes of this section, person does not include any securities broker holding, in the usual and customary broker's function, less than twenty percent (20%) of the voting securities of an insurance company or of any person that controls an insurance company.     Content of Statement.  The statement to be filed with the commissioner under this section shall be made under oath or affirmation and shall contain the following information:  The name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to in subsection (a) is to be effected, called the acquiring party;  If an individual, the person's principal occupation and all offices and positions held during the past five (5) years, and any conviction of crimes other than minor traffic violations during the past ten (10) years; and   If the person is not an individual, a report of the nature of its business operations during the past five (5) years or for such lesser period as the person and any predecessors thereof shall have been in existence; an informative description of the business intended to be done by the person and the person's subsidiaries; and a list of all individuals who are or who have been selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to the positions. The list shall include for each such individual the information required by subdivision (b)(1)(A);     The source, nature and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction wherein funds were or are to be obtained for any such purpose, including any pledge of the insurer's stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing the consideration; provided, that where a source of the consideration is a loan made in the lender's ordinary course of business, the identity of the lender shall remain confidential, if the person filing the statement so requests;   Fully audited financial information as to the earnings and financial condition of each acquiring party for the preceding five (5) fiscal years of each such acquiring party, or for such lesser periods as the acquiring party and any predecessors thereof shall have been in existence, and similar unaudited information as of a date not earlier than ninety (90) days prior to the filing of the statement;   Any plans or proposals that each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management;   The number of shares of any security referred to in subsection (a) that each acquiring party proposes to acquire, the terms of the offer, request, invitation, agreement, or acquisition referred to in subsection (a), and a statement as to the method for arriving at the fairness of the proposal;   The amount of each class of any security referred to in subsection (a) that is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party;   A full description of any contracts, arrangements or understandings with respect to any security referred to in subsection (a) in which any acquiring party is involved, including, but not limited to, transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description shall identify the persons with whom the contracts, arrangements or understandings have been entered into;   A description of the purchase of any security referred to in subsection (a) during the twelve (12) calendar months preceding the filing of the statement, by any acquiring party, including the dates of purchase, names of the purchasers, and consideration paid or agreed to be paid for the security;   A description of any recommendations to purchase any security referred to in subsection (a) made during the twelve (12) calendar months preceding the filing of the statement, by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party;   Copies of all tender offers for, requests, or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in subsection (a), and, if distributed, of additional soliciting material relating to the activity;   The term of any agreement, contract or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (a) for tender, and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard to the agreement;   A nonrefundable fee in an amount that the commissioner shall by rule establish;   Any additional information the commissioner may by rule or regulation prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest. If the person required to file the statement referred to in subsection (a) is a partnership, limited partnership, syndicate or other group, the commissioner may require that the information called for by subdivisions (b)(1)-(15) shall be given with respect to each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any such partner, member or person is a corporation, or the person required to file the statement referred to in subsection (a) is a corporation, the commissioner may require that the information called for by subdivisions (b)(1)-(15) shall be given with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than ten percent (10%) of the outstanding voting securities of the corporation. If any material change occurs in the facts set forth in the statement filed with the commissioner and sent to the insurer pursuant to this section, an amendment setting forth the change, together with copies of all documents and other materials relevant to the change, shall be filed with the commissioner and sent to the insurer within two (2) business days after the person learns of the change;   An agreement by the person required to file the statement referred to in subsection (a) that it will provide the annual report, specified in  56-11-105(l ), for so long as control exists; and   An acknowledgement by the person required to file the statement referred to in subsection (a) that the person and all subsidiaries within its control in the insurance holding company system will provide information to the commissioner upon request as necessary to evaluate enterprise risk to the insurer.     Alternative Filing Materials.  If any offer, request, invitation, agreement or acquisition referred to in subsection (a) is proposed to be made by means of a registration statement under the Securities Act of 1933 (15 U.S.C.  77a et seq.), or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934  (15 U.S.C.  78a et seq.), or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (a) may utilize the documents in furnishing the information called for by that statement.   Approval by Commissioner; Hearings.  The commissioner shall approve any merger or other acquisition of control referred to in subsection (a) unless, after a public hearing, the commissioner finds that:  After the change of control, the domestic insurer referred to in subsection (a) would not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed;   The effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in this state or tend to create a monopoly in this state. In applying the competitive standard in this subdivision (d)(1)(B):   The informational requirements of  56-11-104(c)(1) and the standards of  56-11-104(d)(2) shall apply;   The merger or other acquisition shall not be disapproved if the commissioner finds that any of the situations meeting the criteria provided by  56-11-104(d)(3) exist; and   The commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time;     The financial condition of any acquiring party is such that it might jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders;   The plans or proposals that the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest;   The competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or   The acquisition is likely to be hazardous or prejudicial to the insurance buying public.     The public hearing referred to in subdivision (d)(1) shall be held within thirty (30) days after the statement required by subsection (a) is filed, and at least twenty (20) days' notice of the public hearing shall be given by the commissioner to the person filing the statement. Not less than seven (7) days' notice of the public hearing shall be given by the person filing the statement to the insurer and to such other persons as may be designated by the commissioner. The commissioner shall make a determination within the sixty-day period preceding the effective date of the proposed transaction. At the hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, and any other person whose interest may be affected by the proposed transaction, shall have the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection therewith shall be entitled to conduct discovery proceedings in the same manner as is presently allowed in the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. All discovery proceedings shall be concluded not later than three (3) days prior to the commencement of the public hearing.   If the proposed acquisition of control will require the approval of more than one (1) commissioner, the public hearing referred to in subdivision (d)(2) may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a). Such person shall file the statement referred to in subsection (a) with the National Association of Insurance Commissioners (NAIC) within five (5) days of making the request for a public hearing. A commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within ten (10) days of the receipt of the statement referred to in subsection (a). A hearing conducted on a consolidated basis shall be public and shall be held within the United States before the commissioners of the states in which the insurers are domiciled. Such commissioners shall hear and receive evidence. A commissioner may attend such hearing, in person or by telecommunication.   In connection with a change of control of a domestic insurer, any determination by the commissioner that the person acquiring control of the insurer shall be required to maintain or restore the capital of the insurer to the level required by this title, shall be made not later than sixty (60) days after the date of notification of the change in control submitted pursuant to  56-11-103(a)(1).   The commissioner may retain, at the acquiring person's expense, any attorneys, actuaries, accountants and other experts not otherwise a part of the commissioner's staff as may be reasonably necessary to assist the commissioner in reviewing the proposed acquisition of control.     Exemptions.  This section does not apply to:  Any transaction that is subject to the provisions of chapter 10 of this title dealing with the merger or consolidation of two (2) or more insurers.   Any offer, request, invitation, agreement or acquisition that the commissioner by order shall exempt therefrom as:  Not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer; or   As otherwise not comprehended within the purposes of this section.       Violations.  The following are violations of this section:  The failure to file any statement, amendment, or other material required to be filed pursuant to subsection (a) or (b); or   The effectuation or any attempt to effectuate an acquisition of control of, divestiture of, or merger with, a domestic insurer unless the commissioner has given approval to the acquisition or merger.     Jurisdiction; Consent to Service of Process.  The courts of this state are hereby vested with jurisdiction over every person not resident, domiciled, or authorized to do business in this state who files a statement with the commissioner under this section, and overall actions involving the person arising out of violations of this section, and each such person shall be deemed to have performed acts equivalent to and constituting an appointment by such a person of the commissioner to be the person's true and lawful attorney, upon whom may be served all lawful process in any action, suit or proceeding arising out of violations of this section. Copies of all lawful process shall be served on the commissioner and transmitted by registered or certified mail by the commissioner to the person at the person's last known address.   
  Definitions.  As used in this section only:  Acquisition means any agreement, arrangement or activity, the consummation of which results in a person acquiring directly or indirectly the control of another person, and includes, but is not limited to, the acquisition of voting securities, the acquisition of assets, bulk reinsurance and mergers; and   Involved insurer includes an insurer that either acquires or is acquired, is affiliated with an acquirer or acquired, or is the result of a merger.     Scope.  Except as exempted in subdivision (b)(2), this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in this state.   This section does not apply to the following:  A purchase of securities solely for investment purposes so long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in this state. If a purchase of securities results in a presumption of control under  56-11-101(b)(3), it is not solely for investment purposes unless the commissioner of insurance of the insurer's state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the commissioner of commerce and insurance of this state;   The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the commissioner of commerce and insurance in accordance with subdivision (c)(1) thirty (30) days prior to the proposed effective date of the acquisition. However, the pre-acquisition notification is not required for exclusion from this section if the acquisition would otherwise be excluded from this section by any other subdivision of this subdivision (b)(2);   The acquisition of already affiliated persons;   An acquisition if, as an immediate result of the acquisition:   In no market would the combined market share of the involved insurers exceed five percent (5%) of the total market;   There would be no increase in any market share; or   In no market would the combined market share of the involved insurers exceed twelve percent (12%) of the total market, and the market share increases by more than two percent (2%) of the total market. For the purpose of this subdivision (b)(2)(D), market means direct written insurance premium in this state for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in this state;     An acquisition for which a pre-acquisition notification would be required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business; or   An acquisition of an insurer whose domiciliary commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternative to improving the condition; the public benefits of improving the insurer's condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary commissioner of insurance to the commissioner of commerce and insurance of this state.       Pre-acquisition Notification, Waiting Period.  An acquisition covered by subsection (b) may be subject to an order pursuant to subsection (e) unless the acquiring person files a pre-acquisition notification and the waiting period has expired. The acquired person may file a pre-acquisition notification. The commissioner shall give confidential treatment to information submitted under this subsection (c) in the same manner as provided in  56-11-108.  The pre-acquisition notification shall be in the form and contain the information as prescribed by the National Association of Insurance Commissioners relating to those markets that, under subdivision (b)(2)(D), cause the acquisition not to be exempted from this section. The commissioner may require additional material and information deemed necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (d). The required information may include an opinion of an economist as to the competitive impact of the acquisition in this state accompanied by a summary of the education and experience of the person indicating the person's ability to render an informed opinion.   The waiting period required shall begin on the date of receipt of the commissioner of a pre-acquisition notification and shall end on the earlier of the thirtieth day after the date of the receipt, or termination of the waiting period by the commissioner. Prior to the end of the waiting period, the commissioner, on a one-time basis, may require the submission of additional needed information relevant to the proposed acquisition, in which event the waiting period shall end on the earlier of the thirtieth day after receipt of the additional information by the commissioner, or termination of the waiting period by the commissioner.     Competitive Standard.  The commissioner may enter an order under subdivision (e)(1) with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in this state or tend to create a monopoly therein, or if the insurer fails to file adequate information in compliance with subsection (c).   In determining whether a proposed acquisition would violate the competitive standard of subdivision (d)(1), the commissioner shall consider the following:  Any acquisition covered under subsection (b) involving two (2) or more insurers competing in the same market is prima facie evidence of violation of the competitive standards:  Insurer A  Insurer B   4% 4% or more   10% 2% or more   15% 1% or more    If the market is highly concentrated and the involved insurers possess the following shares of the market:   If the market is not highly concentrated and the involved insurers possess the following shares of the market:    Insurer A  Insurer B   5% 5% or more   10% 4% or more   15% 3% or more   19% 1% or more   A highly concentrated market is one in which the share of the four (4) largest insurers is seventy-five percent (75%) or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two (2) insurers are involved, exceeding the total of the two (2) columns in the table is prima facie evidence of violation of the competitive standard in subdivision (d)(1). For the purpose of this subdivision (d)(2)(A), the insurer with the largest share of the market shall be deemed to be Insurer A.    There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market from the two (2) largest to the eight (8) largest has increased by seven percent (7%) or more of the market over a period of time extending from any base year five (5) to ten (10) years prior to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (b) involving two (2) or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in subdivision (d)(1) if:   There is a significant trend toward increased concentration in the market;   One (1) of the insurers involved is one (1) of the insurers in a grouping of the large insurers showing the requisite increase in the market share; and   Another involved insurer's market is two percent (2%) or more.     As used in this subdivision (d)(2):   Insurer includes any company or group of companies under common management, ownership or control;   Market means the relevant product and geographical markets. In determining the relevant product and geographical markets, the commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the National Association of Insurance Commissioners and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, the line being that used in the annual statement required to be filed by insurers doing business in this state and the relevant geographical market is assumed to be this state; and   The burden of showing prima facie evidence of violation of the competitive standard rests upon the commissioner.     Even though an acquisition is not prima facie violative of the competitive standard under subdivisions (d)(2)(A) and (B), the commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under subdivisions (d)(2)(A) and (B), a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this subdivision (d)(2)(D) include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market.     An order may not be entered under subdivision (e)(1) if:  The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits that would arise from the economies exceed the public benefits that would arise from not lessening competition; or   The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits that would arise from not lessening competition.       Orders and Penalties.  If an acquisition violates the standards of this section, the commissioner may enter an order requiring an involved insurer to cease and desist from doing business in this state with respect to the line or lines of insurance involved in the violation.   The commissioner may also issue an order denying the application of an acquired or acquiring insurer for a license to do business in this state.   An order shall not be entered unless there is a hearing, notice of the hearing is issued prior to the end of the waiting period and not less than fifteen (15) days prior to the hearing, and the hearing is concluded and the order is issued no later than sixty (60) days after the date of the filing of the pre-acquisition notification with the commissioner. Every order shall be accompanied by a written decision of the commissioner setting forth the commissioner's findings of fact and conclusions of law.   An order pursuant to this subsection (e) shall not apply if the acquisition is not consummated.   Any person who violates a cease and desist order of the commissioner under this section and while the order is in effect may, after notice and hearing, and upon order of the commissioner, be subject to any one (1) or more of the following at the discretion of the commissioner:  A monetary penalty of not more than ten thousand dollars ($10,000) for every day of violation; or   Suspension or revocation of the person's license.     Any insurer or other person who fails to make any filing required by this section and who also fails to demonstrate a good faith effort to comply with any filing requirement shall be subject to a fine of not more than fifty thousand dollars ($50,000).     Inapplicable Provisions.  Sections 56-11-110(b) and (c) and 56-11-112 do not apply to acquisitions covered under subsection (b).   
   Registration.  Every insurer and every health maintenance organization that is authorized to do business in this state and that is a member of an insurance holding company system or health maintenance organization holding company system shall register with the commissioner, except a foreign insurer subject to registration requirements and standards adopted by statute or regulation in the jurisdiction of its domicile that are substantially similar to those contained in:  This section;    56-11-106(a)(1), (b), (d); and   Either  56-11-106(a)(2) or a provision such as the following: Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions within fifteen (15) days after the end of the month in which it learns of each change or addition.     Any insurer or health maintenance organization that is subject to registration under this section shall register within fifteen (15) days after it becomes subject to registration, and annually thereafter by April 30 of each year for the previous calendar year, unless the commissioner for good cause shown extends the time for registration, and then within the extended time. The commissioner may require any insurer or health maintenance organization authorized to do business in the state which is a member of an insurance or health maintenance organization holding company system that is not subject to registration under this section to furnish a copy of the registration statement, the summary specified in  56-11-105(c), or other information filed by the insurance company or health maintenance organization with the insurance or health maintenance organization regulatory authority of its domiciliary jurisdiction.     Information and Form Required.  Every insurer and every health maintenance organization subject to registration shall file the registration statement on a form prescribed by the National Association of Insurance Commissioners, which shall contain the following current information:  The capital structure, general financial condition, ownership and management of the insurer or health maintenance organization and any person controlling the insurer or health maintenance organization;   The identity and relationship of every member of the insurance holding company system or health maintenance organization holding company system;   The following agreements in force, and transactions currently outstanding or that have occurred during the last calendar year between the insurer or health maintenance organization and its affiliates:  Loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the insurer or health maintenance organization, or of the insurer or health maintenance organization by its affiliates;   Purchases, sales, or exchange of assets;   Transactions not in the ordinary course of business;   Guarantees or undertakings for the benefit of an affiliate that result in an actual contingent exposure of the insurer's or the health maintenance organization's assets to liability, other than insurance or provider or enrollee contracts entered into in the ordinary course of the insurer's or health maintenance organization's business;   All management agreements, service contracts and all cost-sharing arrangements;   Reinsurance agreements;   Dividends and other distributions to shareholders; and   Consolidated tax allocation agreements;     Any pledge of the insurer's or the health maintenance organization's stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system or health maintenance organization holding company system;   If requested by the commissioner, the insurer or health maintenance organization shall include financial statements of, or within an insurance or health maintenance organization holding company system, including all affiliates. Financial statements may include, but are not limited to, annual audited financial statements filed with the U.S. Securities and Exchange Commission (SEC) pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. An insurer or health maintenance organization required to file financial statements pursuant to this subdivision (b)(5) may satisfy the request by providing the commissioner with the most recently filed parent corporation financial statements that have been filed with the SEC;   Other matters concerning transactions between registered insurers or registered health maintenance organizations and any affiliates as may be included from time to time in any registration forms adopted or approved by the commissioner;   Statements that the insurer's or health maintenance organization's board of directors oversees corporate governance and internal controls and that the insurer's or health maintenance organization's officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures; and   Any other information required by the commissioner by rule or regulation.     Summary of Registration Statement.  All registration statements shall contain a summary outlining all items in the current registration statement representing changes from the prior registration statement.   Materiality.  No information need be disclosed on the registration statement filed pursuant to subsection (b) if the information is not material for the purposes of this section. Unless the commissioner by rule, regulation or order provides otherwise, sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees involving one-half of one percent (0.5%) or less of an insurer's or health maintenance organization's admitted assets as of December 31 next preceding, shall not be deemed material for purposes of this section.   Reporting of Dividends to Shareholders.  Subject to  56-11-106(b), each registered insurer and each registered health maintenance organization shall report to the commissioner, for informational purposes, all dividends and other distributions to shareholders within five (5) business days following the declaration thereof, and at least ten (10) days prior to their payment. The commissioner shall promulgate rules that establish procedures to:  Consider promptly the informational prepayment notices and the standards set forth in  56-11-106(b); and   Review annually all ordinary dividends within the preceding twelve (12) months.     Information of Insurers.  Any person within an insurance holding company system or health maintenance organization holding company system subject to registration shall be required to provide complete and accurate information to an insurer or health maintenance organization, where the information is reasonably necessary to enable the insurer or health maintenance organization to comply with this part.   Termination of Registration.  The commissioner shall terminate the registration of any insurer or health maintenance organization that demonstrates that it no longer is a member of an insurance holding company system or health maintenance organization holding company system.   Consolidated Filing.  The commissioner may require or allow two (2) or more affiliated insurers or two (2) or more affiliated health maintenance organizations subject to registration under this section to file a consolidated registration statement.   Alternative Registration.  The commissioner may allow an insurer or health maintenance organization that is authorized to do business in this state and that is part of an insurance holding company system or health maintenance organization holding company system to register on behalf of any affiliated insurer or health maintenance organization that is required to register under subsection (a) and to file all information and material required to be filed under this section.   Exemptions.  This section does not apply to any insurer, health maintenance organization, information or transaction if, and to the extent that, the commissioner by rule, regulation, or order may exempt the same from this section.   Disclaimer.  Any person may file with the commissioner a disclaimer of affiliation with any authorized insurer or health maintenance organization or such a disclaimer may be filed by the insurer or health maintenance organization or any member of any insurance holding company system or health maintenance organization holding company system. The disclaimer shall fully disclose all material relationships and bases for affiliation between the person and the insurer or health maintenance organization as well as the basis for disclaiming the affiliation. A disclaimer of affiliation shall be deemed to have been granted unless the commissioner, within thirty (30) days following receipt of a complete disclaimer, notifies the filing party the disclaimer is disallowed. In the event of disallowance, the disclaiming party may request an administrative hearing, which shall be granted. The disclaiming party shall be relieved of any duty to register or report under this section if approval of the disclaimer has been granted by the commissioner, or if the disclaimer is deemed to have been approved.   Enterprise Risk Filing.  The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report shall, to the best of the ultimate controlling person's knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report shall be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.   Violations.  The failure to file a registration statement or any summary of the registration statement or enterprise risk filing required by this section within the time specified for the filing is a violation of this section.   
  Transactions Within a Holding Company System.  Transactions within an insurance or health maintenance organization holding company system, to which an insurer or health maintenance organization subject to registration is a party, shall be subject to the following standards:  The terms shall be fair and reasonable;   Agreements for cost sharing services and management shall include such provisions as required by rule and regulation issued by the commissioner;   Charges or fees for services performed shall be reasonable;   Expenses incurred and payment received shall be allocated to the insurer or health maintenance organization in conformity with customary insurance accounting practices, or, in the case of health maintenance organizations, customary accounting practices applicable to health maintenance organizations, consistently applied;   The books, accounts and records of each party to all the transactions shall be so maintained as to clearly and accurately disclose the nature and details of the transactions, including the accounting information necessary to support the reasonableness of the charges or fees to the respective parties; and   The insurer's surplus as regards policyholders, or the health maintenance organization's net worth, following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's, or health maintenance organization's, outstanding liabilities and adequate to meet the insurer's or health maintenance organization's financial needs.     The following transactions involving a domestic insurer or a health maintenance organization and any person in its insurance or health maintenance organization holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this section, which are subject to any materiality standards contained in subdivisions (a)(2)(A)-(G), may not be entered into unless the insurer or health maintenance organization has notified the commissioner in writing of its intention to enter into the transaction at least thirty (30) days prior thereto, or a shorter period that the commissioner may permit, and the commissioner has not disapproved it within the period. The notice for amendments or modifications shall include the reasons for the change and the financial impact on the domestic insurer. Informal notice shall be reported, within thirty (30) days after a termination of a previously filed agreement, to the commissioner for determination of the type of filing required, if any:  Sales, purchases, exchanges, loans, extensions of credit, or investments; provided, that exchanges, loans, extensions of credit, or investments the transactions are equal to or exceed:   With respect to nonlife insurers and health maintenance organizations, the lesser of three percent (3%) of the insurer's or health maintenance organization's admitted assets, or twenty-five percent (25%) of surplus as regards policyholders, or, with respect to health maintenance organizations, net worth as of December 31 next preceding; and   With respect to life insurers, three percent (3%) of the insurer's admitted assets, each as of December 31 next preceding;     Loans or extensions of credit to any person who is not an affiliate, where the insurer or health maintenance organization makes the loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer or health maintenance organization making the loans or extensions of credit; provided, that the transactions are equal to or exceed:   With respect to nonlife insurers and health maintenance organizations, the lesser of three percent (3%) of the insurer's or health maintenance organization's admitted assets, or twenty-five percent (25%) of surplus as regards policyholders, or, with respect to health maintenance organizations, net worth as of December 31 next preceding; and   With respect to life insurers, three percent (3%) of the insurer's admitted assets as of December 31 next preceding;     Reinsurance agreements or modifications thereto, including:   All reinsurance pooling agreements;   Agreements in which the reinsurance premium or a change in the insurer's or health maintenance organization's liabilities, or the projected reinsurance premium or a change in the insurer's liabilities in any of the next three (3) years, equals or exceeds five percent (5%) of the insurer's surplus as regards policyholders, or, with respect to health maintenance organizations, net worth, as of December 31 next preceding, including those agreements that may require as consideration the transfer of assets from an insurer or health maintenance organization to a non-affiliate, if an agreement or understanding exists between the insurer or health maintenance organization and non-affiliate that any portion of the assets will be transferred to one (1) or more affiliates of the insurer or health maintenance organization;     All management agreements, service contracts, tax allocation agreements, guarantees and all cost-sharing arrangements;   Guarantees when made by a domestic insurer or health maintenance organization; provided, however, that a guarantee which is quantifiable as to amount is not subject to the notice requirements of this paragraph unless it exceeds the lesser of one-half of one percent (0.5%) of the insurer's or health maintenance organization's admitted assets, or ten percent (10%) of surplus as regards policyholders, or with respect to health maintenance organizations, net worth, as of December 31 next preceding. Further, all guarantees which are not quantifiable as to amount are subject to the notice requirements of this subdivision (a)(2)(E);   Direct or indirect acquisitions or investments in a person that controls the insurer or health maintenance organization or in an affiliate of the insurer or health maintenance organization in an amount which, together with its present holdings in such investments, exceeds two and one-half percent (2.5%) of the insurer's surplus to policyholders, or, with respect to health maintenance organizations, net worth. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to  56-11-102 (or authorized under any other section of this title), or in non-subsidiary insurance affiliates that are subject to this part, are exempt from this requirement; and   Any material transactions, specified by regulation, which the commissioner determines may adversely affect the interests of the insurer's policyholders or the health maintenance organization's enrollees or providers. Nothing in this subdivision (a)(2) shall be deemed to authorize or permit any transactions that, in the case of an insurer or health maintenance organization that is not a member of the same insurance or health maintenance organization holding company system, would be otherwise contrary to law.     A domestic insurer or a health maintenance organization may not enter into transactions that are part of a plan or series of like transactions with persons within the insurance or health maintenance organization holding company system, if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. If the commissioner determines that the separate transactions were entered into over any twelve-month period for this purpose, the commissioner may exercise the authority under  56-11-111.   The commissioner, in reviewing transactions pursuant to subdivision (a)(2), shall consider whether the transactions comply with the standards set forth in subdivision (a)(1), and whether they may adversely affect the interests of policyholders, or, in the case of health maintenance organizations, enrollees or providers.   The commissioner shall be notified within thirty (30) days of any investment of the domestic insurer or health maintenance organization in any one (1) corporation if the total investment in the corporation by the insurance holding company system or health maintenance organization holding company system exceeds ten percent (10%) of the corporation's voting securities.     Dividends and Other Distributions.  No domestic insurer and no health maintenance organization shall pay an extraordinary dividend or make any other extraordinary distribution to its shareholders until:  Thirty (30) days after the commissioner has received notice of the declaration thereof and has not within the period disapproved the payment; or   The commissioner shall have approved the payment within the thirty-day period.     For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding twelve (12) months exceeds the greater of:  Ten percent (10%) of the insurer's surplus as regards policyholders, or, with respect to health maintenance organizations, net worth, as of December 31 next preceding; or   The net gain from operations of the insurer, if the insurer is a life insurer, or of the net income, if the insurer is not a life insurer, or a health maintenance organization, not including realized capital gains, for the twelve-month period ending December 31 next preceding, but shall not include pro rata distributions of any class of the insurer's or health maintenance organization's own securities.     Notwithstanding any other law in this title, an insurer or health maintenance organization may declare an extraordinary dividend or distribution that is conditional upon the commissioner's approval thereof, and such a declaration shall confer no rights upon shareholders until:  The commissioner has approved the payment of such a dividend or distribution; or   The commissioner has not disapproved the payment within the thirty-day period referred to in subdivision (b)(1).      A domestic insurer or health maintenance organization shall pay a dividend or make a distribution to its shareholders only from the insurer's or health maintenance organization's earned surplus; provided, that the insurer or health maintenance organization may pay a dividend or make a distribution not from earned surplus if the commissioner's approval is first received.   As used in this subdivision (b)(4), earned surplus means unassigned surplus as reported in the insurer's or health maintenance organization's most recent financial statement.       Management of Domestic Insurers and Health Maintenance Organizations Subject to Registration.  Notwithstanding the control of a domestic insurer or any licensed health maintenance organization by any person, the officers and directors of the insurer or health maintenance organization shall not thereby be relieved of any obligation or liability to which they would otherwise be subject to by law, and the insurer or health maintenance organization shall be managed so as to assure its separate operating identity consistent with this part.   Nothing in this section shall preclude a domestic insurer or any licensed health maintenance organization from having or sharing a common management or cooperative or joint use of personnel, property or services with one (1) or more other persons under arrangements meeting the standards of subdivision (a)(1).   Not less than one-third (1/3) of the directors of a domestic insurer or any licensed health maintenance organization, and not less than one-third (1/3) of the members of each committee of the board of directors of any domestic insurer or health maintenance organization shall be persons who are not officers or employees of the insurer or health maintenance organization or of any entity controlling, controlled by, or under common control with the insurer or health maintenance organization and who are not beneficial owners of a controlling interest in the voting stock of the insurer or health maintenance organization or entity. At least one (1) such person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee thereof.   The board of directors of a domestic insurer or any licensed health maintenance organization shall establish one (1) or more committees comprised solely of directors who are not officers or employees of the insurer or health maintenance organization or of any entity controlling, controlled by, or under common control with the insurer or health maintenance organization and who are not beneficial owners of a controlling interest in the voting stock of the insurer or health maintenance organization or any such entity. The committee or committees shall have responsibility for nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers deemed to be principal officers of the insurer or health maintenance organization and recommending to the board of directors the selection and compensation of the principal officers.   Subdivisions (c)(3) and (4) shall not apply to a domestic insurer or any licensed health maintenance organization if the person controlling the insurer or health maintenance organization, such as an insurer, a health maintenance organization, a mutual insurance holding company, or a publicly held corporation, has a board of directors and committees thereof that meet the requirements of subdivisions (c)(3) and (4) with respect to such controlling entity.   An insurer or health maintenance organization may make application to the commissioner for a waiver from the requirements of this subsection (c), if the insurer's or health maintenance organization's annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, is less than three hundred million ($300,000,000). An insurer or health maintenance organization may also make application to the commissioner for a waiver from the requirements of this subsection (c) based upon unique circumstances. The commissioner may consider various factors including, but not limited to, the type of business entity, volume of business written, availability of qualified board members, or the ownership or organizational structure of the entity.     Adequacy of Surplus.  For purposes of this part, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and adequate to meet its financial needs, the following factors, among others, shall be considered:  The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria;   The extent to which the insurer's business is diversified among the several lines of insurance;   The number and size of risks insured in each line of business;   The extent of the geographical dispersion of the insurer's insured risks;   The nature and extent of the insurer's reinsurance program;   The quality, diversification and liquidity of the insurer's investment portfolio;   The recent past and projected future trend in the size of the insurer's investment portfolio;   The surplus as regards policyholders maintained by other comparable insurers;   The adequacy of the insurer's reserves; and   The quality and liquidity of investments in affiliates. The commissioner may treat any such investment as a disallowed asset for purposes of determining the adequacy of surplus as regards policyholders whenever in the commissioner's judgment the investment so warrants.     Subdivisions (d)(1)(A)-(J) shall also apply to health maintenance organizations, to the extent appropriate.     
  Power of Commissioner.  Subject to the limitation contained in this section, and in addition to the powers that the commissioner has under chapters 1 and 32 of this title, relating to the examination of insurers or health maintenance organizations, the commissioner also has the power to examine any insurer or health maintenance organization registered under  56-11-105 and its affiliates to ascertain the financial condition of the insurer or health maintenance organization, including the enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance or health maintenance organization holding company system, or by the insurance or health maintenance organization holding company system on a consolidated basis.   Access to Books and Records.  The commissioner may order any insurer or health maintenance organization registered under  56-11-105 to produce any records, books, or other information papers in the possession of the insurer or health maintenance organization or its affiliates that are reasonably necessary to determine compliance with this title.   To determine compliance with this title, the commissioner may order any insurer or health maintenance organization registered under  56-11-105 to produce information not in the possession of the insurer or health maintenance organization if the insurer or health maintenance organization can obtain access to such information pursuant to contractual relationships, statutory obligations, or other methods. In the event the insurer or health maintenance organization cannot obtain the information requested by the commissioner, the insurer or health maintenance organization shall provide the commissioner a detailed explanation of the reason that the insurer or health maintenance organization cannot obtain the information and the identity of the holder of information. Whenever it appears to the commissioner that the detailed explanation is without merit, the commissioner may require, after notice and hearing, the insurer or health maintenance organization to pay a penalty of one hundred dollars ($100) for each day's delay, or may suspend or revoke the insurer's license.     Use of Consultants.  The commissioner may retain, at the registered insurer or health maintenance organization's expense, attorneys, actuaries, accountants and other experts, not otherwise a part of the commissioner's staff, that shall be reasonably necessary to assist in the conduct of the examination under subsection (a). Any persons so retained shall be under the direction and control of the commissioner and shall act in a purely advisory capacity.   Expenses.  Each registered insurer or health maintenance organization producing for examination records, books and papers pursuant to subsection (a) shall be liable for and shall pay the expense of the examination in accordance with chapters 1 and 32 of this title.   Compelling Production.  In the event the insurer fails to comply with an order, the commissioner shall have the power to examine the affiliates to obtain the information. The commissioner shall also have the power to issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this section. Upon the failure or refusal of any person to obey a subpoena, the commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. Every person shall be obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the state. Such person shall be entitled to the same fees and mileage, if claimed, as a witness in courts of this state, which fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their testimony, shall be itemized and charged against, and be paid by, the company being examined.   
  Documents, materials, or other information in the possession or control of the department that are obtained by or disclosed to the commissioner or any other person in the course of an examination or investigation made pursuant to  56-11-107, and all information reported or provided to the department pursuant to  56-11-103(b)(13)-(15), 56-11-105, 56-11-106, and 56-11-116(d), are confidential by law and privileged, are not subject to  10-7-503 or  56-1-602, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer or health maintenance organization to which it pertains unless the commissioner, after giving the insurer or health maintenance organization and its affiliates who would be affected thereby notice and opportunity to be heard, determines that the interest of policyholders, enrollees, providers, shareholders, or the public will be served by the publication thereof, in which event the commissioner may publish all or any part thereof, in the manner the commissioner may deem appropriate.   Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner or with whom such documents, materials or other information are shared pursuant to this part shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a).   In order to assist in the performance of the commissioners duties, the commissioner:  May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (a), with other state, federal and international regulatory agencies, with the National Association of Insurance Commissioners (NAIC) and its affiliates and subsidiaries, and with state, federal, and international law enforcement authorities, including members of any supervisory college described in  56-11-116; provided, that the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material or other information, and has verified in writing the legal authority to maintain confidentiality.   Notwithstanding subdivision (c)(1), may only share confidential and privileged documents, material, or information reported pursuant to  56-11-105(l ) with commissioners of states having statutes or regulations substantially similar to subsection (a) and who have agreed in writing not to disclose such information;   May receive documents, materials or information, including otherwise confidential and privileged documents, materials or information from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and   Shall enter into written agreements with the NAIC governing sharing and use of information provided pursuant to this part consistent with this subsection (c) that shall:  Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC and its affiliates and subsidiaries pursuant to this part, including procedures and protocols for sharing by the NAIC with other state, federal or international regulators;   Specify that ownership of information shared with the NAIC and its affiliates and subsidiaries pursuant to this part remains with the commissioner and the NAICs use of the information is subject to the direction of the commissioner;   Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC pursuant to this part is subject to a request or subpoena to the NAIC for disclosure or production; and   Require the NAIC and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the NAIC and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the NAIC and its affiliates and subsidiaries pursuant to this part.       The sharing of information by the commissioner pursuant to this part shall not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution and enforcement of this part.   No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subsection (c).   Documents, materials or other information in the possession or control of the NAIC pursuant to this part shall be confidential by law and privileged, shall not be subject to  10-7-503 or   56-1-602, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.   
 The commissioner may promulgate rules, regulations and orders necessary to carry out this part.  
  Injunctions.  Whenever it appears to the commissioner that any insurer or health maintenance organization, or any director, officer, employee or agent thereof, has committed or is about to commit a violation of this part or of any rule, regulation, or order issued by the commissioner under this part, the commissioner may apply to the chancery court to enjoin the insurer or health maintenance organization or any director, officer, employee or agent of the insurer or health maintenance organization from violating or continuing to violate this part or any such rule, regulation or order, and for other equitable relief as the nature of the case and the interest of the insurer or health maintenance organization's policyholders, enrollees, providers, creditors, and shareholders or the public may require.   Voting of Securities; When Prohibited.  No security that is the subject of any agreement or arrangement regarding acquisition, or that is acquired or to be acquired, in contravention of this part or of any rule, regulation or order issued by the commissioner under this part may be voted at any shareholders' meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of the securities, unless the action would materially affect control of the insurer or health maintenance organization or unless the courts of this state have so ordered. If an insurer or health maintenance organization or the commissioner has reason to believe that any security of the insurer or health maintenance organization has been or is about to be acquired in contravention of this part or of any rule, regulation or order issued by the commissioner under this part, the insurer or health maintenance organization or the commissioner may apply to the chancery court of Davidson County to enjoin any offer, request, invitation, agreement or acquisition made in contravention of  56-11-103 or any rule, regulation, or order issued by the commissioner under  56-11-103 to enjoin the voting of any security so acquired, to void any vote of the security already cast at any meeting of shareholders and for other equitable relief as the nature of the case and the interest of the insurer or health maintenance organization's policyholders, enrollees, providers, creditors and shareholders or the public may require.   Sequestration of Voting Securities.  In any case where a person has acquired or is proposing to acquire any voting securities in violation of this part or any rule, regulation or order issued by the commissioner under this part, the chancery court of Davidson County may, on such notice as the court deems appropriate, upon the application of the insurer or health maintenance organization or the commissioner, seize or sequester any voting securities of the insurer or health maintenance organization owned directly or indirectly by the person, and issue the order with respect thereto as may be appropriate to effectuate this part. Notwithstanding any other law, for the purposes of this part, situs of the ownership of the securities of domestic insurers or health maintenance organizations shall be deemed to be in this state.   
  Any insurer or health maintenance organization failing, without just cause, to file any registration statement as required in this part shall be required, after notice and hearing, to pay a penalty of one hundred dollars ($100) for each day's delay, to be recovered by the commissioner, and the penalty so recovered shall be paid into the general revenue fund of this state. The maximum penalty under this section is ten thousand dollars ($10,000). The commissioner may reduce the penalty if the insurer or health maintenance organization demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer or health maintenance organization.   Every director or officer of an insurance holding company system or health maintenance organization holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any of the officers or agents of the insurer or health maintenance organization to engage in transactions or make investments that have not been properly reported or submitted pursuant to  56-11-105(a) and 56-11-106(a)(2) and (b), or that violate this part, shall pay, in the director's or officer's individual capacity, a civil forfeiture of not more than one thousand dollars ($1,000) per violation, after notice and hearing before the commissioner. In determining the amount of the civil forfeiture, the commissioner shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and other matters as justice may require.   Whenever it appears to the commissioner that any insurer or health maintenance organization subject to this part, or any director, officer, employee or agent thereof, has engaged in any transaction or entered into a contract that is subject to  56-11-106 and that would not have been approved had such approval been requested, the commissioner may order the insurer or health maintenance organization to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the commissioner may also order the insurer or health maintenance organization to void any such contracts and restore the status quo if the action is in the best interest of the policyholders, creditors, or the public.   Whenever it appears to the commissioner that any insurer or health maintenance organization or any director, officer, employee or agent thereof has committed a willful violation of this part, the commissioner may cause criminal proceedings to be instituted against the insurer or health maintenance organization or the responsible director, officer, employee or agent. Any insurer or health maintenance organization that willfully violates this part may be fined not more than ten thousand dollars ($10,000). Any individual who willfully violates this part may be fined in the person's individual capacity not more than ten thousand dollars ($10,000) or be punished for a Class E felony, or both.   Any officer, director or employee of an insurance holding company system or health maintenance organization holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the commissioner in the performance of the officer, director or employee's duties under this part, upon conviction, shall be fined not more than ten thousand dollars ($10,000) or be punished for a Class E felony, or both. Any fines imposed shall be paid by the officer, director, or employee in the person's individual capacity.   Whenever it appears to the commissioner that any person has committed a violation of  56-11-103 and which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with  56-9-503.   
 Whenever it appears to the commissioner that any person has committed a violation of this part that so impairs the financial condition of a domestic insurer or of a health maintenance organization as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, enrollees, providers, creditors, shareholders or the public, the commissioner may proceed as provided in chapter 9 of this title to take possession of the property of the domestic insurer or health maintenance organization and to conduct its business.  
  If an order for liquidation or rehabilitation of a domestic insurer or health maintenance organization has been entered, the receiver appointed under the order shall have a right to recover on behalf of the insurer or health maintenance organization:  From any parent corporation or holding company or person or affiliate who otherwise controlled the insurer or health maintenance organization, the amount of distributions, other than distributions of shares of the same class of stock, paid by the insurer or health maintenance organization on its capital stock; or   Any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or health maintenance organization or its subsidiaries to a director, officer or employee, where the distribution or payment pursuant to subdivision (a)(1) or (a)(2) is made at any time during the one (1) year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of subsections (b)-(d).     No such distribution shall be recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable, and that the insurer or health maintenance organization did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer or health maintenance organization to fulfill its contractual obligations.   Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or health maintenance organization or affiliate at the time the distributions were paid, shall be liable up to the amount of distributions or payments the person received under subsection (a). Any person who otherwise controlled the insurer or health maintenance organization at the time the distributions were declared shall be liable up to the amount of distributions the person would have received had the person been paid immediately. If two (2) or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.   The maximum amount recoverable under this section shall be the amount needed in excess of all other available assets of the impaired or insolvent insurer or health maintenance organization to pay the contractual obligations of the impaired or insolvent insurer or health maintenance organization and to reimburse any guaranty funds.   To the extent that any person liable under subsection (c) is insolvent or otherwise fails to pay claims due from it pursuant to subsection (c), its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.   
 Whenever it appears to the commissioner that any person has committed a violation of this part which makes the continued operation of an insurer or health maintenance organization contrary to the interests of policyholders, enrollees, providers or the public, the commissioner may, after giving notice and an opportunity to be heard, determine to suspend, revoke or refuse to renew the insurer or health maintenance organization's license or authority to do business in this state for such period as the commissioner finds is required for the protection of policyholders, enrollees, providers or the public. Any such determination shall be accompanied by specific findings of fact and conclusions of law.  
 Any person aggrieved by an act, determination, rule, regulation, order, or any other action of the commissioner pursuant to this part may appeal as set forth in the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
  Power of Commissioner.  With respect to any insurer or health maintenance organization registered under  56-11-105, and in accordance with subsection (c), the commissioner shall also have the power to participate in a supervisory college for any domestic insurer or health maintenance organization that is part of an insurance holding company system with international operations in order to determine compliance by the insurer or health maintenance organization with this title. The powers of the commissioner with respect to supervisory colleges include, but are not limited to, the following:  Initiating the establishment of a supervisory college;   Clarifying the membership and participation of other supervisors in the supervisory college;   Clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor;   Coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and   Establishing a crisis management plan.     Expenses.  Each registered insurer or health maintenance organization subject to this section shall be liable for and shall pay the reasonable expenses of the commissioners participation in a supervisory college in accordance with subsection (c), including reasonable travel expenses.   For purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or health maintenance organization or its affiliates, and the commissioner may establish a regular assessment to the insurer or health maintenance organization for the payment of these expenses.     Supervisory College.  In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management and governance processes, and as part of the examination of individual insurers in accordance with  56-11-107, the commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or health maintenance organization or its affiliates, including other state, federal and international regulatory agencies. The commissioner may enter into agreements in accordance with  56-11-108(c) providing the basis for cooperation between the commissioner and the other regulatory agencies, and the activities of the supervisory college. Nothing in this section shall delegate to the supervisory college the authority of the commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.   Group-Wide Supervision of Internationally Active Insurance Groups.   The commissioner is authorized to act as the group-wide supervisor for any internationally active insurance group in accordance with this section. However, the commissioner may also acknowledge that another regulatory official shall serve as the group-wide supervisor if the internationally active insurance group:   Does not have substantial insurance operations in the United States;   Has substantial insurance operations in the United States, but not in this state; or   Has substantial insurance operations in the United States and this state, but the commissioner has determined pursuant to the factors set forth in subdivisions (d)(2) and (6) that the other regulatory official is the appropriate group-wide supervisor.     An insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the commissioner make a determination or acknowledgment as to a group-wide supervisor pursuant to this section.      In cooperation with other state, federal, and international regulatory agencies, the commissioner shall identify a single group-wide supervisor for an internationally active insurance group. The commissioner may determine that the commissioner is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in this state, or the commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. The commissioner shall consider the following factors when making a determination or acknowledgement under this subsection (d):   The place of domicile of the insurers within the internationally active insurance group that hold the largest share of the group's written premiums, assets, or liabilities;   The place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group;   The location of the executive offices or largest operational offices of the internationally active insurance group;   Whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the commissioner determines to be:  Substantially similar to the system of regulation provided under the laws of this state; or   Otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and     Whether another regulatory official acting or seeking to act as the group-wide supervisor provides the commissioner with reasonably reciprocal recognition and cooperation.     However, a regulatory official identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgement of the group-wide supervisor must be made after consideration of the factors listed in subdivisions (d)(2)(A)(i)-(v), and must be made in cooperation with and subject to the acknowledgement of other regulatory officials involved with the supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group.     Notwithstanding any other law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the commissioner shall acknowledge that regulatory official as the group-wide supervisor. However, the commissioner shall make a determination or acknowledgement as to the appropriate group-wide supervisor for the internationally active insurance group pursuant to subdivision (d)(2) if a material change in the internationally active insurance group results in:  The internationally active insurance group's insurers domiciled in this state holding the largest share of the group's premiums, assets, or liabilities; or   This state being the place of domicile of the top-tiered insurer or insurers in the insurance holding company system of the internationally active insurance group.     Pursuant to  56-11-107, the commissioner is authorized to collect from any insurer registered pursuant to  56-11-105 all information necessary to determine whether the commissioner may act as the group-wide supervisor of an internationally active insurance group or if the commissioner may acknowledge another regulatory official to act as the group-wide supervisor. Prior to issuing a determination that an internationally active insurance group is subject to group-wide supervision by the commissioner, the commissioner shall notify the insurer registered pursuant to  56-11-105 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group has not less than thirty (30) days to provide the commissioner with additional information pertinent to the pending determination. The commissioner shall publish on the website of the department the identity of internationally active insurance groups that the commissioner has determined are subject to group-wide supervision by the commissioner.   If the commissioner is the group-wide supervisor for an internationally active insurance group, the commissioner is authorized to:  Assess the enterprise risks within the internationally active insurance group to ensure that:   The material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and   Reasonable and effective mitigation measures are in place;     Request, from any member of an internationally active insurance group subject to the commissioner's supervision, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding:   Governance, risk assessment, and management;   Capital adequacy; and   Material intercompany transactions;     Coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of the internationally active insurance group that are engaged in the business of insurance;   Communicate with other state, federal, or international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of  56-11-108, through supervisory colleges as set forth in this section, or otherwise;   Enter into agreements with or obtain documentation from any insurer registered under  56-11-105, any member of the internationally active insurance group, and any other state, federal, or international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the commissioner's role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. The agreements or documentation do not serve as evidence in any proceeding that any insurer or person with an insurance holding company system not domiciled or incorporated in this state is doing business in this state or is otherwise subject to jurisdiction in this state; and   Engage in other group-wide supervision activities consistent with the authority and purposes enumerated in this section and considered necessary by the commissioner.     If the commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the National Association of Insurance Commissioners is the group-wide supervisor, the commissioner is authorized to reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor if:  The commissioner's cooperation complies with the laws of this state; and   The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the commissioner's activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the commissioner is authorized to refuse recognition and cooperation.     The commissioner is authorized to enter into agreements with or obtain documentation from any insurer registered under  56-11-105, any affiliate of the insurer, and other state, federal, or international regulatory agencies for members of the internationally active insurance group that provide the basis for or otherwise clarify a regulatory official's role as group-wide supervisor.   The commissioner may promulgate rules necessary for the administration of this section. All rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   A registered insurer subject to this section is liable for and shall pay the reasonable expenses of the commissioner's participation in the administration of this section, including the engagement of attorneys, actuaries, and any other professionals, and all reasonable travel expenses.     
  Solely for purposes of this part, a foreign insurer or foreign health maintenance organization that participates in the TennCare program under Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program is deemed to be a domestic insurer, and shall comply with any provisions of this part that apply to domestic insurers.   The confidentiality provisions of  56-11-108 shall apply to all foreign insurers and foreign health maintenance organizations subject to this part pursuant to this section to the same and full extent as they apply to domestic insurers.   The commissioner shall have the authority to waive any portion of this part for such a foreign insurer or foreign health maintenance organization subject to this part pursuant to this section upon a determination that the foreign insurer or foreign health maintenance organization is subject to holding company requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in this part. The decision whether to exercise any authority under this subsection (c) is in the sole discretion of the commissioner.   A foreign insurer or foreign health maintenance organization deemed to be a domestic insurer under this section shall be considered a domestic insurer for the purposes of this part and shall not be considered a domestic insurer for any other purposes under this chapter, unless otherwise expressly stated.   
 To the extent that this part conflicts with or is inconsistent with any laws in this title, this part shall control.  
 If any provision of this part or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this part which can be given effect without the invalid provisions or application, and for this purpose the provisions of this part are severable.  
  The purpose of this part is to provide the requirements for maintaining a risk management framework and completing an Own Risk and Solvency Assessment (ORSA) and provide guidance and instructions for filing an ORSA Summary Report with the insurance commissioner of this state.   The requirements of this part shall apply to all insurers domiciled in this state and all health maintenance organizations licensed in this state unless exempt pursuant to  56-11-206.   The ORSA Summary Report will contain confidential and sensitive information related to an insurer, health maintenance organization or insurance groups identification of risks material and relevant to the insurer, health maintenance organization or insurance group filing the report. This information will include proprietary and trade secret information that has the potential for harm and competitive disadvantage to the insurer, health maintenance organization or insurance group if the information is made public. As such, the ORSA Summary Report shall be a confidential document filed with the commissioner and shared only as stated in this part and to assist the commissioner in the performance of the commissioner's duties, and that in no event shall the ORSA Summary Report be subject to public disclosure.   
  Health maintenance organization means a health maintenance organization as defined at  56-32-102.   Insurance group, for the purpose of conducting an Own Risk and Solvency Assessment, means those insurers or health maintenance organizations and affiliates included within an insurance or health maintenance company holding company system as defined in part 1 of this chapter.   Insurer has the same meaning as set forth in  56-1-102, except that it shall not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state.   ORSA Guidance Manual means the current version of the Own Risk and Solvency Assessment Guidance Manual developed and adopted by the National Association of Insurance Commissioners (NAIC) and as amended from time to time. A change in the ORSA Guidance Manual shall be effective on the January 1 following the calendar year in which the changes have been adopted by the NAIC.   ORSA Summary Report means a confidential high-level summary of an insurer, health maintenance organization or insurance groups ORSA.   Own Risk and Solvency Assessment or ORSA means a confidential internal assessment, appropriate to the nature, scale and complexity of an insurer, health maintenance organization or insurance group, conducted by that insurer, health maintenance organization or insurance group of the material and relevant risks associated with the insurer, health maintenance organization or insurance group's current business plan, and the sufficiency of capital resources to support those risks.   
 An insurer or health maintenance organization shall maintain a risk management framework to assist the insurer with identifying, assessing, monitoring, managing and reporting on its material and relevant risks. This requirement may be satisfied if the insurance group of which the insurer or health maintenance organization is a member maintains a risk management framework applicable to the operations of the insurer or health maintenance organization.  
 Subject to  56-11-206, an insurer or health maintenance organization, or the insurance group of which the insurer or health maintenance organization is a member, shall regularly conduct an ORSA consistent with a process comparable to the ORSA Guidance Manual. The ORSA shall be conducted no less than annually but also at any time when there are significant changes to the risk profile of the insurer or health maintenance organization or the insurance group of which the insurer or health maintenance organization is a member.  
  Upon the commissioner's request, and no more than once each year, an insurer or health maintenance organization shall submit to the commissioner an ORSA Summary Report or any combination of reports that together contain the information described in the ORSA Guidance Manual, applicable to the insurer, health maintenance organization or the insurance group of which it is a member. Notwithstanding any request from the commissioner, if the insurer or health maintenance organization is a member of an insurance group, the insurer or health maintenance organization shall submit the report or reports required by this subsection (a) if the commissioner is the lead state commissioner of the insurance group as determined by the procedures within the Financial Analysis Handbook adopted by the National Association of Insurance Commissioners.   The report or reports shall include a signature of the insurer or insurance groups chief risk officer or other executive having responsibility for the oversight of the insurers or health maintenance organizations enterprise risk management process attesting to the best of such person's belief and knowledge that the insurer or health maintenance organization applies the enterprise risk management process described in the ORSA Summary Report and that a copy of the report has been provided to the insurers board of directors or the appropriate committee thereof.   An insurer or health maintenance organization may comply with subsection (a) by providing the most recent and substantially similar report or reports provided by the insurer or another member of an insurance group of which the insurer is a member to the commissioner of another state or to a supervisor or regulator of a foreign jurisdiction, if that report provides information that is comparable to the information described in the ORSA Guidance Manual. Any such report in a language other than English must be accompanied by a translation of that report into the English language.   
  An insurer or health maintenance organization shall be exempt from the requirements of this part, if:  The insurer or health maintenance organization has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program (7 U.S.C.  1503), less than five hundred million dollars ($500,000,000); and   The insurance group of which the insurer is a member has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than one billion dollars ($1,000,000,000).     If an insurer or health maintenance organization qualifies for exemption pursuant to subdivision (a)(1), but the insurance group of which the insurer or health maintenance organization is a member does not qualify for exemption pursuant to subdivision (a)(2), then the ORSA Summary Report that may be required pursuant to  56-11-205 shall include every insurer or health maintenance organization within the insurance group. This requirement may be satisfied by the submission of more than one (1) ORSA Summary Report for any combination of insurers or health maintenance organizations; provided, that any combination of reports includes every insurer or health maintenance organization within the insurance group.   If an insurer or health maintenance organization does not qualify for exemption pursuant to subdivision (a)(1), but the insurance group of which it is a member qualifies for exemption pursuant to subdivision (a)(2), then the only ORSA Summary Report that may be required pursuant to  56-11-205 shall be the report applicable to that insurer or health maintenance organization.   An insurer or health maintenance organization that does not qualify for exemption pursuant to subsection (a) may apply to the commissioner for a waiver from the requirements of this part based upon unique circumstances. In deciding whether to grant the insurer's or health maintenance organization's request for waiver, the commissioner may consider the type and volume of business written, ownership and organizational structure, and any other factor the commissioner considers relevant to the insurer or health maintenance organization or insurance group of which the insurer or health maintenance organization is a member. If the insurer or health maintenance organization is part of an insurance group with insurers or health maintenance organizations domiciled in more than one (1) state, the commissioner shall coordinate with the lead state commissioner and with the other domiciliary commissioners in considering whether to grant the insurer's or health maintenance organization's request for a waiver.   Notwithstanding the exemptions stated in this section, the commissioner may require that:  An insurer or health maintenance organization maintain a risk management framework, conduct an ORSA and file an ORSA Summary Report based on unique circumstances including, but not limited to, the type and volume of business written, ownership and organizational structure, federal agency requests, and international supervisor requests; or   An insurer or health maintenance organization maintain a risk management framework, conduct an ORSA and file an ORSA Summary Report if the insurer or health maintenance organization has Risk-Based Capital for company action level event as set forth in  56-46-104, meets one (1) or more of the standards of an insurer deemed to be in hazardous financial condition as defined in Tenn. Comp. R. & Reg. 0780-01-66, or otherwise exhibits qualities of a troubled insurer or health maintenance organization as determined by the commissioner.     If an insurer or health maintenance organization that qualifies for an exemption pursuant to subsection (a) subsequently no longer qualifies for that exemption due to changes in premium as reflected in the insurers or health maintenance organization's most recent annual statement or in the most recent annual statements of the insurers or health maintenance organizations within the insurance group of which the insurer or health maintenance organization is a member, the insurer or health maintenance organization shall have one (1) year following the year the threshold is exceeded to comply with the requirements of this part.   
  The ORSA Summary Report shall be prepared consistent with the ORSA Guidance Manual, subject to the requirements of subsection (b). Documentation and supporting information shall be maintained and made available upon examination or upon request of the commissioner.   The review of the ORSA Summary Report, and any additional requests for information, shall be made using similar procedures currently used in the analysis and examination of multi-state or global insurers or health maintenance organizations and insurance groups.   
  Documents, materials or other information, including the ORSA Summary Report, in the possession of or control of the department that are obtained by, created by or disclosed to the commissioner or any other person under this part, is recognized by this state as being proprietary and to contain trade secrets. All such documents, materials or other information shall be confidential by law and privileged, shall not be subject to  10-7-503 or   56-1-602, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties. The commissioner shall not otherwise make the documents, materials or other information public without the prior written consent of the insurer or health maintenance organization.   Neither the commissioner nor any person who receives documents, materials or other ORSA-related information, through examination or otherwise, while acting under the authority of the commissioner or with whom such documents, materials or other information are shared pursuant to this part shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a).   In order to assist in the performance of the commissioner's regulatory duties, the commissioner:  May, upon request, share documents, materials or other ORSA-related information, including the confidential and privileged documents, materials or information subject to subsection (a), including proprietary and trade secret documents and materials with other state, federal and international financial regulatory agencies, including members of any supervisory college as described in  56-11-116 with the NAIC and with any third-party consultants designated by the commissioner; provided, that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality;   May receive documents, materials or other ORSA-related information, including otherwise confidential and privileged documents, materials or information, including proprietary and trade-secret information or documents, from regulatory officials of other foreign or domestic jurisdictions, including members of any supervisory college as described in  56-11-116, and from the NAIC, and shall maintain as confidential or privileged any documents, materials or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and   Shall enter into a written agreement with the NAIC or a third-party consultant governing sharing and use of information provided pursuant to this part, consistent with this subsection (c) that shall:  Specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC or a third-party consultant pursuant to this part, including procedures and protocols for sharing by the NAIC with other state regulators from states in which the insurance group has domiciled insurers. The agreement shall provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the ORSA-related documents, materials or other information and has verified in writing the legal authority to maintain confidentiality;   Specify that ownership of information shared with the NAIC or a third-party consultant pursuant to this part remains with the commissioner and the NAIC's or a third-party consultant's use of the information is subject to the direction of the commissioner;   Prohibit the NAIC or third-party consultant from storing the information shared pursuant to this part in a permanent database after the underlying analysis is completed;   Require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC or a third-party consultant pursuant to this part is subject to a request or subpoena to the NAIC or a third-party consultant for disclosure or production;   Require the NAIC or a third-party consultant to consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this part; and   In the case of an agreement involving a third-party consultant, provide for the insurer's written consent.       The sharing of information and documents by the commissioner pursuant to this part shall not constitute a delegation of regulatory or rulemaking authority or rulemaking. The commissioner is solely responsible for the administration, execution and enforcement of this part.   No waiver of any applicable privilege or claim of confidentiality in the documents, proprietary and trade-secret materials or other ORSA-related information shall occur as a result of disclosure of such ORSA-related information or documents to the commissioner under this section or as a result of sharing as authorized in this part.   Documents, materials or other information in the possession or control of the NAIC or a third-party consultant pursuant to this part shall be confidential by law and privileged, shall not be subject to  10-7-503 or   56-1-602, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action.   
 Any insurer or health maintenance organization failing, without just cause, to timely file the ORSA Summary Report as required in this part shall be required, after notice and hearing, to pay a penalty of one hundred dollars ($100) for each days delay, to be recovered by the commissioner and the penalty so recovered shall be paid into the general revenue fund of this state. The maximum penalty under this section is ten thousand dollars ($10,000). The commissioner may reduce the penalty if the insurer or health maintenance organization demonstrates to the commissioner that the imposition of the penalty would constitute a financial hardship to the insurer or health maintenance organization.  
 If any provision of this part, or the application thereof to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this part which can be given effect without the invalid provision or application, and to that end the provisions of this part are severable.  
 This part shall be known and may be cited as the Tennessee Insurance Guaranty Association Act.  
 The purpose of this part is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, and to provide an association to assess the cost of the protection among insurers.  
 This part shall apply to all kinds of direct insurance, but shall not be applicable to:   Life, annuity, health or disability insurance;   Mortgage guaranty, financial guaranty or other forms of insurance offering protection against investment risks;   Fidelity or surety bonds, or any other bonding obligations;   Credit insurance, vendors' single interest insurance, or other collateral protection insurance or any similar insurance protecting the interests of a creditor arising out of a creditor-debtor transaction;   Insurance of warranties or service contracts, including insurance that provides for the repair, replacement, or service of goods or property, or indemnification for repair, replacement or service for the operational or structural failure of the goods or property due to a defect in materials, workmanship, or normal wear and tear or provides reimbursement for the liability incurred by the issuer of the agreements or service contracts that provide the benefits;   Title insurance;   Ocean marine insurance;   Any transaction or combination of transactions between a person, including affiliates of the person,  and an insurer, including affiliates of the insurer, that involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk;   Any insurance provided by or guaranteed by government;   Any insurance issued on a limited or unlimited assessable basis; or   Excess insurance.   
 As used in this part, unless the context otherwise requires:   Account means any one (1) of the accounts created by  56-12-105;   Affiliate means a person who directly, or indirectly, through one (1) or more intermediaries, controls, is controlled by, or is under common control with an insolvent insurer on December 31 of the year next preceding the date the insurer becomes an insolvent insurer;   Association means the Tennessee insurance guaranty association created under  56-12-105;   Claimant means any insured making a first-party claim or any person instituting a liability claim; provided, that no person who is an affiliate of an insolvent insurer may be a claimant;   Commissioner means the commissioner of commerce and insurance;   Control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent (10%) or more of the voting securities of any other person. This presumption may be rebutted by a showing that control does not exist in fact;    Covered claim means an unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of an insurance policy to which this part applies and was issued by an insurer that is insolvent, if the insurer becomes an insolvent insurer after March 31, 1999, and:   The claimant or insured is a resident of this state when the insured event occurs; provided, that for an entity other than an individual, the residence of a claimant, insured or policyholder is the state in which its principal place of business is located when the insured event occurs; or   The claim is a first-party claim for damage to property with a permanent location in this state.     Covered claim does not include:   Any amount awarded as punitive or exemplary damages;   Any amount sought as a return of premium under any retrospective rating plan;   Any amount due any reinsurer, insurer, insurance pool, or underwriting association as subrogation recoveries, reinsurance recoveries, contribution, indemnification or otherwise. No such claim for any amount due any reinsurer, insurer, insurance pool, or underwriting association may be asserted against a person insured under a policy issued by an insolvent insurer other than to the extent the claim exceeds the association's obligations and limitations set forth in this part or policy limits of the insured, whichever amount is greater;   Any first party claim by an insured whose net worth exceeds ten million dollars ($10,000,000) on December 31 of the year next preceding the date the insurer becomes an insolvent insurer. An insured's net worth on this date is deemed to include the aggregate net worth of the insured and all of its subsidiaries as calculated on a consolidated basis; and   Any first-party claims by an insured that is an affiliate of the insolvent insurer;       Insolvent insurer means an insurer authorized to transact insurance in this state, either when the policy was issued or when the insured event occurred, and against whom a final order of liquidation has been entered after March 31, 1999, with a finding of insolvency by a court of competent jurisdiction in the insurer's state of domicile;    Member insurer means any person who:   Writes any kind of insurance to which this part applies under  56-12-103 including the exchange of reciprocal or inter-insurance contracts; and   Is licensed to transact insurance in this state, except county mutual fire insurance companies and nonprofit service corporations.     An insurer shall cease to be a member insurer effective on the day after the termination or expiration of its license to transact the kinds of insurance to which this chapter applies; provided, that the insurer shall remain liable as a member insurer for any and all obligations, including obligations for assessments levied before the termination or expiration of the insurer's license and assessments levied after the termination or expiration, which relate to any insurer that became an insolvent insurer before the termination or expiration of the insurer's license;      Net direct written premiums means direct gross premiums written in this state on insurance policies to which this part applies, less return premiums and dividends paid or credited to policyholders on this direct business;   Net direct written premiums does not include premiums on contracts between insurers or reinsurers; and     Person means any individual, corporation, partnership, governmental entity, association, voluntary organization or any other legal entity.   
  There is created a nonprofit unincorporated legal entity to be known as the Tennessee insurance guaranty association.   All insurers defined as member insurers shall be and remain members of the association as a condition of their authority to transact insurance in this state.   The association shall perform its functions under a plan of operation established and approved under  56-12-109 and shall exercise its powers through a board of directors established under  56-12-107.   For purposes of assessment, and the maintenance of records, the association shall be divided into two (2) separate accounts as follows:  The workers' compensation insurance account; and   The account for all other insurance to which this part applies.     
  The board of directors of the association shall consist of five (5) persons serving terms as established in the plan of operation. The members of the board shall be selected by the commissioner. Each board member so selected shall be a resident of this state and shall represent a company licensed to do business in this state. The last two (2) members of the board shall be an officer or employee of domestic insurance companies. Vacancies on the board shall be filled for the remaining period of the term in the same manner as initial appointments.   In making selections to the board, the commissioner shall consider, among other things, whether all member insurers are fairly represented.   Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors.   
  The association shall:   Be obligated to the extent of the covered claims existing prior to the determination of insolvency and arising within thirty (30) days after the determination of insolvency, or before the policy expiration date if less than thirty (30) days after the determination, or before the insured replaces the policy or on request effects cancellation, if the insured does so within thirty (30) days of the determination, but the obligation shall include only that amount of each covered claim that is in excess of one hundred dollars ($100) and is less than one hundred thousand dollars ($100,000), except that the association shall pay the full amount of any covered claim arising out of a workers' compensation policy. In no event shall the association be obligated to a policyholder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy from which the claim arises;   In the case of claims other than workers' compensation arising from bodily injury, sickness, or disease, including death resulting from bodily injury, sickness, or disease, the amount for which the association shall be obligated shall not exceed the claimant's reasonable expenses incurred for necessary medical, surgical, X-ray and dental services, including prosthetic devices and necessary ambulance, hospital, professional nursing and funeral services, and any amounts actually lost by reason of claimant's inability to work and earn wages or salary or their equivalent that would otherwise have been earned in the normal course of the injured claimant's employment, to which may be added at the discretion of the association an additional sum as compensation for permanent physical impairment if the payment can be made within the policy limits;     Any obligation of the association to defend an insured shall cease upon the association's payment, by settlement releasing the insured or on a judgment, of an amount equal to the lesser of the association's covered claim obligation limit or the applicable policy limit;   Notwithstanding any other provisions of this part, except in the case of a claim for benefits under workers' compensation coverage, any obligation of the association to any and all persons shall cease when ten million dollars ($10,000,000) has been paid in the aggregate to or on behalf of any single insured and its affiliates by the association and any one (1) or more associations similar to the association of any other state or states or any property and casualty security fund that obtains contributions from insurers on a pre-insolvency basis, on covered claims or allowed claims arising under the policy or policies of any one (1) insolvent insurer. For the purposes of this section, affiliate means a person who directly, or indirectly, through one (1) or more intermediaries, controls, is controlled by, or is under common control with another person. If the association determines that there may be more than one (1) claimant having a covered claim or allowed claim against the association or any associations similar to the association or any property and casualty insurance security fund in other states, under the policy or policies of any one (1) insolvent insurer, the association may establish a plan to allocate amounts payable by the association in the manner that the association in its discretion deems equitable;       Be deemed the insurer to the extent of its obligation on the covered claims and to this extent shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent including, but not limited to, the right to pursue and retain salvage and subrogation recoverable on paid covered claim obligations. The association shall not be deemed the insolvent insurer for any purpose relating to the issue of whether the association is amenable to the personal jurisdiction of the courts of any other state;   Allocate claims paid and expenses incurred among the two (2) accounts separately, and assess member insurers separately for each account amounts necessary to pay the obligations of the association under subdivision (a)(1) subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, and expenses authorized by this part. The assessments of each member insurer shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year on the kinds of insurance in the account bears to the net direct written premiums of all member insurers for the preceding calendar year on the kinds of insurance in the account. Each member insurer shall be notified of the assessment not later than thirty (30) days before it is due. No member insurer may be assessed in any year on any account an amount greater than two percent (2%) of that member insurer's net direct written premiums for the preceding calendar year on the kinds of insurance in the account. If the maximum assessment, together with the other assets of the association in any account, does not provide in any one (1) year in any account an amount sufficient to make all necessary payments from that account, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. The association may exempt or defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurer's financial statement to reflect amounts of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. Each member insurer may set off against any assessment, authorized payments made on covered claims and expenses incurred in the payment of the claims by the member insurer if they are chargeable to the account for which the assessment is made;   Investigate claims brought against the association and adjust, compromise, settle, and pay covered claims to the extent of the association's obligation and deny all other claims and may review settlements, releases and judgments to which the insolvent insurer or its insureds were parties to determine the extent to which the settlements, releases and judgments may be properly contested;   Notify any persons as the commissioner directs under  56-12-109(b)(1);   Handle claims through its employees or through one (1) or more insurers or other persons designated as servicing facilities. Designation of a servicing facility is subject to the approval of the commissioner, but such designation may be declined by a member insurer; and   Reimburse each servicing facility for obligations of the association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the association, and shall pay the other expenses of the association authorized by this part.     The association may:  Appear in, defend, and appeal any action on a claim brought against the association;   Employ or retain such persons as are necessary to handle claims and perform other duties of the association;   Borrow funds necessary to effect the purposes of this part in accordance with the plan of operation. In the event of an insolvency resulting in covered claims payable by the association in excess of its capacity to pay from assessments under subdivision (a)(3), the association, in its sole discretion, may by resolution request the local development authority to issue bonds and/or notes pursuant to title 4, chapter 31, part 8, in such amounts as the association may determine necessary to provide funds for the payments of covered claims and expenses related thereto. However, the amount of the bond issuance may be limited by  4-31-804 and 4-31-805 with the local development authority having the final authority to determine the total amount of the bond issuance including issuance costs. When the association and the local development authority agree that bonds or notes shall be issued to pay covered claims in the event of an insolvency, the association shall have the authority to annually assess member insurers for amounts necessary to secure and provide for the repayment of the indebtedness, including, without limitation, the principal, redemption premium, if any, and interest on, and related costs of issuance of such indebtedness including bond investors insurance. Necessary assessments collected pursuant to this authority shall be collected under the same procedures provided in subdivision (a)(3). Assessments collected under this section may be assigned and pledged to or on behalf of the local development authority for the benefit of the holders of such indebtedness, in order to provide for the payment of the principal of, redemption premium, if any, and interest on such indebtedness, the costs of issuance, and the funding of any reserves and any other payments under the documents under which the indebtedness was incurred. In addition to the assessments provided for in this section, the association in its sole discretion may utilize assessments made under subdivision (a)(3), to service such indebtedness, if necessary. The association shall have no obligation to pay covered claims solely from the proceeds of bonds or notes issued under  4-31-804; provided, that if the association may cause assessments to be made hereunder for such covered claims, and assigns and pledges such assessments to or on behalf of the local development authority as issuer of such indebtedness for the benefit of the holders of bonds or notes, the association may administer such covered claims and present valid covered claims for payment;   Sue or be sued, and such power to sue includes the power and right to intervene as a party before any court that has jurisdiction over an insolvent insurer as defined by this part;   Negotiate and become a party to such contracts as are necessary to carry out the purpose of this part;   Perform such other acts as are necessary or proper to effectuate the purpose of this part; and   Refund to the member insurers in proportion to the contribution of each member insurer to that account that amount by which the assets of the account exceed the liabilities, if, at the end of any calendar year, the board of directors finds that the assets of the association in any account exceed the liabilities of that account as estimated by the board of directors for the coming year.     With respect to any suit involving the association:  Any action relating to or arising out of this part against the association shall be brought in a court in this state. Such court shall have exclusive jurisdiction over any action relating to or arising out of this part against the association; and   Exclusive venue in any action brought against the association is in the circuit or chancery court in Davidson County; provided, that the association may waive such venue as to a specific action.     
   The association shall submit to the commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments thereto shall become effective upon approval in writing by the commissioner.   If the association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate this part. Such rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner.     All member insurers shall comply with the plan of operation.   The plan of operation shall:  Establish the procedures whereby all the powers and duties of the association under  56-12-107 will be performed;   Establish procedures for handling assets of the association;   Establish the amount and method of reimbursing members of the board of directors under  56-12-106;   Establish procedures by which claims may be filed with the association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the association or its agent, and a list of such claims shall be periodically submitted to the association or similar organization in another state by the receiver or liquidator;   Establish regular places and times for meetings of the board of directors;   Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;   Provide that any member insurer aggrieved by any final action or decision of the association may appeal to the commissioner within thirty (30) days after the action or decision;   Establish the procedures whereby selections for the board of directors will be submitted to the commissioner;   Contain additional provisions necessary or proper for the execution of the powers and duties of the association; and   Establish procedures for the disposition of liquidating dividends or other moneys received from the estate of the insolvent insurer.     The plan of operation may provide that any or all powers and duties of the association, except those under  56-12-107(a)(3) and (b)(3), are delegated to a corporation, association, or other organization that performs or will perform functions similar to those of this association, or its equivalent, in two (2) or more states. Such a corporation, association or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the association. A delegation under this subsection (d) shall take effect only with the approval of both the board of directors and the commissioner, and may be made only to a corporation, association, or organization that extends protection not substantially less favorable and effective than that provided by this part.   
  The commissioner shall:  Notify the association of the existence of an insolvent insurer not later than three (3) days after receiving notice of the determination of the insolvency. The association shall be entitled to a copy of any complaint seeking an order of liquidation with a finding of insolvency against a member company at the same time such complaint is filed with a court of competent jurisdiction; and   Upon request of the board of directors, provide the association with a statement of the net direct written premiums of each member insurer.     The commissioner may:  Require that the association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this part. Such notification shall be by mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient;    Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer which fails to pay an assessment when due or that fails to comply with the plan of operation; or   As an alternative, the commissioner may levy a forfeiture on any member insurer who fails to pay an assessment when due. Such forfeiture shall not exceed five percent (5%) of an unpaid assessment per month, but no forfeiture shall be less than one hundred dollars ($100) per month; and     Revoke the designation of any servicing facility if the commissioner finds claims are being handled unsatisfactorily.     Any final action or order of the commissioner under this part shall be subject to judicial review exclusively by common law writ of certiorari in the chancery court of Davidson County.   
  Any person recovering under this part shall be deemed to have assigned that person's rights under the policy to the association to the extent of that person's recovery from the association. Every insured or claimant seeking the protection of this part shall cooperate with the association to the same extent as that person would have been required to cooperate with the insolvent insurer. The association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except those causes of action as the insolvent insurer would have had if the sums had been paid by the insolvent insurer and except as provided in subsection (b).   The association shall have the right to recover from the following persons the amount of any covered claim paid on behalf of such person pursuant to this part:  Any insured whose net worth on December 31 of the year immediately preceding the date the insurer becomes an insolvent insurer exceeds twenty-five million dollars ($25,000,000) and whose liability obligations to other persons are satisfied in whole or in part by payments made under this part; and   Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this part.     The association and any similar organization in another state are claimants in the liquidation of an insolvent insurer for any amounts paid by them on covered claims obligations as determined under this part or similar laws in other states and shall receive dividends and any other distributions at the priority set forth in  56-9-330. The receiver, liquidator or statutory successor of an insolvent insurer shall be bound by determinations of covered claim eligibility under this part and by settlements of claims made by the association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that which the claimant would have been entitled in the absence of this part against the assets of the insolvent insurer. The expenses of the association or similar organization in handling claims shall be accorded the same priority as the liquidator's expenses for handling claims.   The association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the association and estimates of anticipated claims on the association that shall preserve the rights of the association against the assets of the insolvent insurer.   
  Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer, which is also a covered claim, shall be required to exhaust first such person's right under such policy. Any amount payable on a covered claim under this part shall be reduced by the amount of any recovery under such insurance policy.   Any person having a claim that may be recovered under more than one (1) insurance guaranty association or its equivalent shall seek recovery first from the association of the place of residence of the insured, except that if it is a first party claim for damage to property with a permanent location, the person shall seek recovery first from the association of the location of the property, and if it is a workers' compensation claim, the person shall seek recovery first from the association of the residence of the claimant. Any recovery under this part shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent.   
  The board of directors may, upon majority vote, make reports to the commissioner upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer. Such reports shall be considered public documents.   The board of directors shall, at the conclusion of any insurer insolvency in which the association was obligated to pay covered claims, prepare a report on the history and causes of such insolvency, based on the information available to the association, and submit such report to the commissioner.   
  The association shall be subject to examination and regulation by the commissioner.   The board of directors shall submit, not later than March 30 of each year, a financial report for the preceding calendar year in a form approved by the commissioner.   
 The association shall be exempt from payment of all fees, except examination fees, and all taxes levied by this state or any of its subdivisions, except taxes levied on real or personal property.  
 Member insurers assessed a percentage of net direct written premiums for any preceding calendar year, as provided in  56-12-107(a)(3), shall be allowed a credit against premium taxes imposed on such member insurers by  56-4-205, up to twenty-five percent (25%) of the net premium taxes due in any one (1) calendar year until the aggregate of all assessments paid to the guaranty association has been offset by such premium tax credits. The guaranty association shall certify to the commissioner on an annual basis the names of the member insurers and the assessments paid. The provisions herein are applicable to all insolvencies occurring after April 28, 1975; provided, that only premium taxes paid on and after March 1977, will be subject to credit as herein provided.  
 There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer, the association or its agents or employees, the board of directors, or the commissioner or the commissioner's representatives for any action taken by them in the performance of their powers and duties under this part.  
  All proceedings in which the association is obligated to defend by reason of this part shall be stayed for six (6) months from the date the insolvency is determined or such additional time as shall be granted either by the court in which the action is pending or by the chancery court of Davidson County, upon petition by the association for good cause shown to permit proper defense of such causes of action.   The association shall not be obligated to satisfy in part or in whole any decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured, but shall be permitted to defend such claim on its merits.   
 No member insurer shall include any advertising matter in its advertisements in reference to the coverage afforded by the Tennessee insurance guaranty association.  
 Assessments made by the Tennessee insurance guaranty association as provided in  56-12-107(a)(3) shall be allowed as a credit against premium taxes imposed on member insurers up to twenty-five percent (25%) of the net premium taxes due in any one (1) calendar year, until the aggregate of all assessments paid to the association have been offset by such premium tax credits.  
  All obligations for unearned premium claims shall include only that amount of each covered claim that is in excess of two hundred fifty dollars ($250) and is less than ten thousand dollars ($10,000).    Unearned premium claims arising out of workers' compensation policies shall be subject to the limitations of subsection (a).   Unearned premium claims shall not include credit adjustments developed under retrospective rating plans.     
  In no case shall a covered claim include any claim filed with the association, domiciliary receiver, ancillary receiver or liquidator, after the earlier of:  Eighteen (18) months after the date of the order of liquidation; or   The final date set by the court for the filing of claims against the liquidator or receiver of an insolvent insurer.     In no case shall a covered claim include any claim filed with the association, domiciliary, or ancillary receiver or a liquidator for protection afforded under the insured's policy for incurred-but-not-reported losses.   
 This part shall be known and may be cited as the Tennessee Life and Health Insurance Guaranty Association Act.  
  The purpose of this part is to protect, subject to certain limitations, the persons listed in  56-12-204(a) against failure in the performance of contractual obligations, under life, health, and annuity policies, plans, or contracts specified in  56-12-204(b), because of the impairment or insolvency of the member insurer that issued the policies, plans, or contracts.   To provide this protection, an association of member insurers is hereby created to pay benefits and to continue coverages as limited in this part.   Members of the association are subject to assessment to provide funds to carry out the purpose of this part, and shall provide such services as are necessary to implement the protections accorded to policyholders by this part.   
 As used in this part:   Account means any of the accounts created under  56-12-205;   Association means the Tennessee life and health insurance guaranty association created under  56-12-205;   Commissioner means the commissioner of commerce and insurance;   Contractual obligation means an obligation under a policy or contract or certificate under a group policy or contract, or a portion thereof, for which coverage is provided under  56-12-204;   Covered contract or covered policy means a contract or policy, or a portion of a contract or policy, for which coverage is provided under  56-12-204;   Extra-contractual claims includes, for example, claims relating to bad faith in the payment of claims, punitive or exemplary damages, or attorneys' fees and costs;   Health benefit plan means any hospital or medical expense policy or certificate, or health maintenance organization subscriber contract or any other similar health contract. The term does not include accident only insurance, credit insurance, dental only insurance, vision only insurance, Medicare supplement insurance, disability income insurance, coverage for on-site medical clinics, benefits for long-term care, home health care, community-based care or any combination thereof, specified disease, hospital confinement indemnity, or limited benefit health insurance if the types of coverage do not provide coordination of benefits and are provided under separate policies or certificates, or other limited benefit or supplemental health insurance excluded from the definition of health insurance in  56-1-105;   Impaired insurer means a member insurer which, after July 1, 1989, is not an insolvent insurer, and is placed under an order of rehabilitation or conservation by a court of competent jurisdiction;   Insolvent insurer means a member insurer which, after July 1, 1989, is placed under an order of liquidation by a court of competent jurisdiction with a finding of insolvency;   Insurance means life, annuity, and health benefits provided under a contract issued by a member insurer;   Long-term care insurance has the same meaning as set forth in  56-42-103(5);   Member insurer means an insurer, health maintenance organization, or nonprofit hospital and medical service organization licensed or that holds a certificate of authority to transact in this state any kind of insurance or health maintenance organization business for which coverage is provided under  56-12-204, and includes an insurer or health maintenance organization whose license or certificate of authority in this state may have been suspended, revoked, not renewed, or voluntarily withdrawn, but does not include:  A fraternal benefit society;   A mandatory state pooling plan;   A mutual assessment company or other person that operates on an assessment basis;   An insurance exchange;   An organization that is authorized under the law of this state to issue charitable gift annuities; or   An entity similar to any of the above;     Moody's Corporate Bond Yield Average means the Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor thereto;   Owner of a policy or contract and policyholder, policy owner, and contract owner mean the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the member insurer. Owner, policyholder, policy owner, and contract owner does not include persons with a mere beneficial interest in a policy or contract;   Person means an individual, corporation, limited liability company, partnership, association, governmental body or entity, or voluntary organization;   Premiums means amounts or considerations, by whatever name called, received on covered policies or contracts less returned premiums, considerations, and deposits and less dividends and experience credits. Premiums does not include amounts or considerations received for policies or contracts, or for the portions of policies or contracts for which coverage is not provided under  56-12-204(b), except that assessable premium must not be reduced on account of  56-12-204(b)(2)(C) relating to interest limitations or  56-12-204(c)(2) relating to limitations with respect to one (1) individual, one (1) participant, and one (1) policy or contract owner. Premiums does not include:  Premiums on an unallocated annuity contract; or   With respect to multiple non-group policies of life insurance owned by one (1) owner, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, premiums in excess of five million dollars ($5,000,000) with respect to these policies or contracts, regardless of the number of policies or contracts held by the owner;     Principal place of business of a person, other than a natural person, means the single state in which the natural person who establishes a policy for the direction, control, and coordination of the operations of the entity as a whole, primarily exercises that function as determined by the association in its reasonable judgment by considering the following factors:  The state in which the primary executive and administrative headquarters of the entity is located;   The state in which the principal office of the chief executive officer of the entity is located;   The state in which the board of directors or similar governing person or persons of the entity conducts the majority of its meetings;   The state in which the executive or management committee of the board of directors or similar governing person or persons of the entity conducts the majority of its meetings; and   The state from which the management of the overall operations of the entity is directed;     Receivership court means the court in the insolvent or impaired insurer's state having jurisdiction over the conservation, rehabilitation, or liquidation of the member insurer;   Resident means a person to whom a contractual obligation is owed and who resides in this state on the date of entry of a court order that determines a member insurer to be an impaired insurer or a court order that determines a member insurer to be an insolvent insurer. A person may be a resident of only one (1) state, which, in the case of a person other than a natural person, is its principal place of business. Citizens of the United States who are either residents of foreign countries or residents of United States possessions, territories, or protectorates that do not have an association similar to the association created by this part are deemed residents of the state of domicile of the member insurer that issued the policies or contracts;   State means a state, the District of Columbia, Puerto Rico, and a United States possession, territory, or protectorate;   Structured settlement annuity means an annuity purchased in order to fund periodic payments for a plaintiff or other claimant in payment for, or with respect to, personal injury suffered by the plaintiff or other claimant;   Supplemental contract means a written agreement entered into for the distribution of proceeds under a life, health, or annuity policy or contract; and   Unallocated annuity contract means an annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under the contract or certificate.   
   This part provides coverage for the policies and contracts specified in subsection (b):  To persons who, regardless of where they reside except for nonresident certificate holders under group policies or contracts, are the beneficiaries, assignees, or payees, including healthcare providers rendering services covered under health insurance policies or certificates, of persons covered under subdivision (a)(1)(B); and   To persons who are owners of or certificate holders or enrollees under the policies or contracts, other than structured settlement annuities, and who:   Are residents; or   Are not residents, but only under all of the following conditions:  The member insurer that issued the policies or contracts is domiciled in this state;   The states in which the persons reside have associations similar to the association created by this part; and   The persons are not eligible for coverage by an association in any other state due to the fact that the insurer or the health maintenance organization was not licensed in the state at the time specified in the state's guaranty association law.         For structured settlement annuities specified in subsection (b), subdivisions (a)(1)(A) and (a)(1)(B) do not apply, and this part, except as provided in subdivisions (a)(3) and (a)(4), provides coverage to a person who is a payee under a structured settlement annuity, or beneficiary of a payee if the payee is deceased, if the payee:  Is a resident, regardless of where the contract owner resides; or   Is not a resident, but only under both of the following conditions:   (a)  The contract owner of the structured settlement annuity is a resident; or  (i)  (a)  The contract owner of the structured settlement annuity is a resident; or   The contract owner of the structured settlement annuity is not a resident, but the insurer that issued the structured settlement annuity is domiciled in this state, and the state in which the contract owner resides has an association similar to the association created by this part; and     Neither the payee, the beneficiary, nor the contract owner is eligible for coverage by the association of the state in which the payee or contract owner resides.       This part does not provide coverage to the following:  A person who is a payee or the beneficiary of a contract owner resident of this state if the payee or beneficiary is afforded any coverage by the association of another state; or   A person who acquires rights to receive payments through a structured settlement factoring transaction as defined in 26 U.S.C.  5891(c)(3)(A), regardless of whether the transaction occurred before or after that section took effect.     This part provides coverage to a person who is a resident of this state and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person who would otherwise receive coverage under this part is provided coverage under the laws of any other state, the person is not provided coverage under this part. In determining the application of this subdivision (a)(4) in situations where a person could be covered by the association of more than one (1) state, whether as an owner, payee, enrollee, beneficiary, or assignee, this part must be construed in conjunction with other state laws to result in coverage by only one (1) association.      This part provides coverage to the persons specified in subsection (a) for policies or contracts of direct, non-group life insurance, accident and health insurance, which, for purposes of this part, includes health maintenance organization subscriber contracts and certificates, or annuities, for certificates under direct group policies and contracts, and for supplemental contracts to any of these, in each case issued by member insurers, except as limited by this part. Annuity contracts and certificates under group annuity contracts include allocated funding agreements, structured settlement annuities, and any immediate or deferred annuity contracts.   Except as otherwise provided in subdivision (b)(3), this part does not provide coverage for:  A portion of a policy or contract not guaranteed by the member insurer, or under which the risk is borne by the policy or contract owner;   A policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract;   A portion of a policy or contract to the extent that the rate of interest on which it is based, or the interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value:   Averaged over the period of four (4) years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this part, whichever is earlier, exceeds the rate of interest determined by subtracting two (2) percentage points from Moody's Corporate Bond Yield Average averaged for that same four-year period or for such lesser period if the policy or contract was issued less than four (4) years before the member insurer becomes an impaired or insolvent insurer under this part, whichever is earlier; and   On and after the date on which the member insurer becomes an impaired or insolvent insurer under this part, whichever is earlier, exceeds the rate of interest determined by subtracting three (3) percentage points from Moody's Corporate Bond Yield Average as most recently available;     A portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured, including, but not limited to, benefits payable by an employer, association, or other person under:   A multiple employer welfare arrangement as defined in 29 U.S.C.  1002(40);   A minimum premium group insurance plan;   A stop-loss group insurance plan; or   An administrative services only contract;     A portion of a policy or contract to the extent that it provides for:   Dividends or experience rating credits;   Voting rights; or   Payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract;     A policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state;   A portion of a policy or contract to the extent that the assessments required by  56-12-208 with respect to the policy or contract are preempted by federal or state law;   An obligation that does not arise under the express written terms of the policy or contract issued by the member insurer to the enrollee, certificate holder, contract owner, or policy owner, including without limitation:   Claims based on marketing materials;   Claims based on side letters, riders, or other documents that were issued by the member insurer without meeting applicable policy or contract form filing or approval requirements;   Misrepresentations of or regarding policy or contract benefits;   Extra-contractual claims; or   A claim for penalties or consequential or incidental damages;     A contractual agreement that establishes the member insurer's obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer;   An unallocated annuity contract;   A portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner's rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this part, whichever is earlier. If a policy's or contract's interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture under this subdivision (b)(2)(K), the interest or change in value determined by using the procedures defined in the policy or contract will be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and will not be subject to forfeiture;   A policy or contract providing any hospital, medical, prescription drug, or other healthcare benefits pursuant to part C or part D of Subchapter XVIII, Chapter 7 of Title 42 of the United States Code, commonly known as Medicare part C and D, or Subchapter XIX, Chapter 7 of Title 42 of the United States Code, commonly known as Medicaid, or any regulations issued pursuant thereto; or   Structured settlement annuity benefits to which a payee, or beneficiary, has transferred his or her rights in a structured settlement factoring transaction as defined in 26 U.S.C.  5891(c)(3)(A), regardless of whether the transaction occurred before or after that section became effective.     The exclusion from coverage in subdivision (b)(2)(C) does not apply to any portion of a policy or contract, including a rider, that provides long-term care or any other health insurance benefits.     The benefits that the association may become obligated to cover must in no event exceed the lesser of:  The contractual obligations for which the member insurer is liable or would have been liable if it were not an impaired or insolvent insurer; or    With respect to one (1) life, regardless of the number of policies or contracts:   Three hundred thousand dollars ($300,000) in life insurance death benefits, but not more than one hundred thousand dollars ($100,000) in net cash surrender and net cash withdrawal values for life insurance;   One hundred thousand dollars ($100,000) in health insurance benefits; provided, for policies or contracts issued by a member insurer that becomes insolvent after January 1, 2010, the limits for health insurance benefits are as follows:  One hundred thousand dollars ($100,000) for coverages that are not disability income insurance, health benefit plans, or long-term care insurance, including any net cash surrender and net cash withdrawal values;   Three hundred thousand dollars ($300,000) for disability income insurance and three hundred thousand dollars ($300,000) for long-term care insurance;   Five hundred thousand dollars ($500,000) for health benefit plans; and     Two hundred fifty thousand dollars ($250,000) in the present value of annuity benefits, including net cash surrender and net cash withdrawal values; or     With respect to each payee of a structured settlement annuity, or beneficiary or beneficiaries of the payee if deceased, two hundred fifty thousand dollars ($250,000) in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values, if any;   The association is not obligated to cover more than:   An aggregate of three hundred thousand dollars ($300,000) in benefits with respect to any one (1) life under subdivisions (c)(2)(A) and (B) except with respect to benefits for health benefit plans under subdivision (c)(2)(A)(ii)(c), in which case the aggregate liability of the association must not exceed five hundred thousand dollars ($500,000) with respect to any one (1) individual; or   With respect to one (1) owner of multiple non-group policies of life insurance, whether the policy or contract owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, more than five million dollars ($5,000,000) in benefits, regardless of the number of policies and contracts held by the owner;     The limitations set forth in this subsection (c) are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the association's obligations under this part may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights;   For purposes of this part, benefits provided by a long-term care rider to a life insurance policy or annuity contract are considered the same type of benefits as the base life insurance policy or annuity contract to which it relates.       In performing its obligations to provide coverage under  56-12-207, the association is not required to guarantee, assume, reinsure, reissue, or perform, or cause to be guaranteed, assumed, reinsured, reissued, or performed, the contractual obligations of the insolvent or impaired insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract.   
  There is created a nonprofit legal entity to be known as the Tennessee life and health insurance guaranty association. All member insurers are and shall remain members of the association as a condition of their authority to transact insurance or a health maintenance organization business in this state. The association shall perform its function under the plan of operation established and approved pursuant to  56-12-209, and shall exercise its powers through a board of directors established by  56-12-206. For purposes of administration and assessment, the association shall maintain two (2) accounts:  The life insurance and annuity account, which includes the following subaccounts:  Life insurance account; and   Annuity account, excluding unallocated annuities; and     The health account.     The association is under the immediate supervision of the commissioner and subject to the applicable provisions of the insurance laws of this state. Meetings or records of the association may be opened upon majority vote of the board of directors of the association.   
  The board of directors of the association shall consist of not less than five (5) nor more than nine (9) member insurers serving terms as established in the plan of operation. The members of the board shall be selected by member insurers, subject to the approval of the commissioner. Vacancies on the board shall be filled for the remaining period of the term by a majority vote of the remaining board members, subject to the approval of the commissioner. To select the initial board of directors, and initially organize the association, the commissioner shall give notice to all member insurers of the time and place of the organizational meeting. In determining voting rights at the organizational meeting, each member insurer shall be entitled to one (1) vote in person or by proxy. If the board of directors is not selected within sixty (60) days after notice of the organizational meeting, the commissioner may appoint the initial members.   In approving selections or in appointing members to the board, the commissioner shall consider, among other things, whether all member insurers are fairly represented.   Members of the board may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors in accordance with the state's travel regulations. Members of the board shall not otherwise be compensated by the association for their services.   
  If a member insurer is an impaired insurer, the association may, in its discretion, and subject to any conditions imposed by the association that do not impair the contractual obligations of the impaired insurer and that are approved by the commissioner:  Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, any or all of the policies or contracts of the impaired insurer; and   Provide monies, pledges, loans, notes, guarantees, or other means as are proper to effectuate subdivision (a)(1) and assure payment of the contractual obligations of the impaired insurer pending action under subdivision (a)(1).     If a member insurer is an insolvent insurer, then the association shall, in its discretion, either:     Guarantee, assume, reissue, or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, the policies or contracts of the insolvent insurer; or   Assure payment of the contractual obligations of the insolvent insurer; and     Provide monies, pledges, loans, notes, guarantees, or other means reasonably necessary to discharge the association's duties; or     Provide benefits and coverage in accordance with the following provisions:  With respect to policies and contracts, assure payment of benefits that would have been payable under the policies or contracts of the insolvent insurer for claims incurred:   With respect to group policies and contracts, no later than the earlier of the next renewal date under those policies or contracts or forty-five (45) days, but in no event less than thirty (30) days, after the date on which the association becomes obligated with respect to the policies and contracts; and   With respect to non-group policies, contracts, and annuities no later than the earlier of the next renewal date, if any, under the policies or contracts or one (1) year, but in no event less than thirty (30) days, from the date on which the association becomes obligated with respect to the policies or contracts;     Make diligent efforts to provide all known insureds, enrollees, or annuitants for non-group policies and contracts, or group policy or contract owners with respect to group policies and contracts, thirty-days' notice of the termination pursuant to subdivision (b)(2)(A), of the benefits provided;   With respect to non-group policies and contracts covered by the association, make available to each known insured, enrollee, or annuitant, or owner if other than the insured or annuitant, and with respect to an individual formerly an insured, enrollee, or annuitant under a group policy or contract who is not eligible for replacement group coverage, make available substitute coverage on an individual basis in accordance with subdivision (b)(2)(D), if the insureds, enrollees, or annuitants had a right under law or the terminated policy, contract, or annuity to convert coverage to individual coverage or to continue an individual policy, contract, or annuity in force until a specified age or for a specified time, during which the insurer or health maintenance organization had no right unilaterally to make changes in any provision of the policy, contract, or annuity or had a right only to make changes in premium by class;     In providing the substitute coverage required under subdivision (b)(2)(C), the association may offer either to reissue the terminated coverage or to issue an alternative policy or contract at actuarially justified rates subject to the prior approval of the commissioner;   Alternative or reissued policies or contracts must be offered without requiring evidence of insurability, and must not provide for any waiting period or exclusion that would not have applied under the terminated policy or contract; and   The association may reinsure any alternative or reissued policy or contract;       Alternative policies or contracts adopted by the association are subject to the approval of the commissioner. The association may adopt alternative policies or contracts of various types for future issuance without regard to any particular impairment or insolvency;   Alternative policies or contracts must contain at least the minimum statutory provisions required in this state and provide benefits that are not unreasonable in relation to the premium charged. The association shall set the premium in accordance with a table of rates that it shall adopt. The premium must reflect the amount of insurance to be provided and the age and class of risk of each insured, but must not reflect any changes in the health of the insured after the original policy or contract was last underwritten; and   Any alternative policy or contract issued by the association must provide coverage of a type similar to that of the policy or contract issued by the impaired or insolvent insurer, as determined by the association;     If the association elects to reissue terminated coverage at a premium rate different from that charged under the terminated policy or contract, the premium must be actuarially justified and set by the association in accordance with the amount of insurance or coverage provided and the age and class of risk, subject to prior approval of the commissioner;   The association's obligations with respect to coverage under any policy or contract of the impaired or insolvent insurer or under any reissued or alternative policy or contract ceases on the date the coverage or policy or contract is replaced by another similar policy or contract by the policy or contract owner, the insured, the enrollee, or the association; and   When proceeding under this subdivision (b)(2), with respect to a policy or contract carrying guaranteed minimum interest rates, the association shall assure the payment or crediting of a rate of interest consistent with  56-12-204(b)(2)(C).       Nonpayment of premiums within thirty-one (31) days after the date required under the terms of any guaranteed, assumed, alternative, or reissued policy or contract or substitute coverage terminates the association's obligations under the policy, contract, or coverage under this part with respect to the policy, contract, or coverage, except with respect to any claims incurred or any net cash surrender value which may be due in accordance with this part.   Premiums due for coverage after entry of an order of liquidation of an insolvent insurer belong to and are payable at the direction of the association. If the liquidator of an insolvent insurer requests, the association shall provide a report to the liquidator regarding such premium collected by the association. The association is liable for unearned premiums due to policy or contract owners arising after the entry of the order.   The protection provided by this part does not apply where any guaranty protection is provided to residents of this state by the laws of the domiciliary state or jurisdiction of the impaired or insolvent insurer other than this state.   In carrying out its duties under subsection (b), the association may:  Subject to approval by a court in this state, impose permanent policy or contract liens in connection with a guarantee, assumption, or reinsurance agreement if the association finds that the amounts that can be assessed under this part are less than the amounts needed to assure full and prompt performance of the association's duties under this part, or that the economic or financial conditions as they affect member insurers are sufficiently adverse to render the imposition of permanent policy or contract liens, to be in the public interest; or   Subject to approval by a court in this state, impose temporary moratoriums or liens on payments of cash values and policy loans, or any other right to withdraw funds held in conjunction with policies or contracts, in addition to any contractual provisions for deferral of cash or policy loan value. In addition, in the event of a temporary moratorium or moratorium charge imposed by the receivership court on payment of cash values or policy loans, or on any other right to withdraw funds held in conjunction with policies or contracts out of the assets of the impaired or insolvent insurer, the association may defer the payment of cash values, policy loans, or other rights by the association for the period of the moratorium or moratorium charge imposed by the receivership court, except for claims covered by the association to be paid in accordance with a hardship procedure established by the liquidator or rehabilitator and approved by the receivership court.     The commissioner shall promptly pay to the association a deposit in this state, held pursuant to law or required by the commissioner for the benefit of creditors, including policy or contract owners, not turned over to the domiciliary liquidator upon the entry of a final order of liquidation or order approving a rehabilitation plan of a member insurer domiciled in this state or in a reciprocal state, pursuant to  56-9-409. The association is entitled to retain a portion of any amount so paid to it equal to the percentage determined by dividing the aggregate amount of policy or contract owners' claims related to that insolvency for which the association has provided statutory benefits by the aggregate amount of all policy or contract owners' claims in this state related to that insolvency and shall remit to the domiciliary receiver the amount so paid to the association less the amount retained pursuant to this subsection (g). Any amount so paid to the association and retained by it is treated as a distribution of estate assets pursuant to applicable state receivership law dealing with early access disbursements.   If the association fails to act within a reasonable period of time with respect to an insolvent insurer, as provided in subsection (b), then the commissioner has the powers and duties of the association under this part with respect to the insolvent insurer.   The association may render assistance and advice to the commissioner, upon the commissioner's request, concerning rehabilitation, payment of claims, continuance of coverage, or the performance of other contractual obligations of an impaired or insolvent insurer.   The association has standing to appear or intervene before a court or agency in this state with jurisdiction over an impaired or insolvent insurer concerning which the association is or may become obligated under this part, or with jurisdiction over any person or property against which the association may have rights through subrogation or otherwise. Standing extends to all matters germane to the powers and duties of the association, including, but not limited to, proposals for reinsuring, reissuing, modifying, or guaranteeing the policies or contracts of the impaired or insolvent insurer and the determination of the policies or contracts and contractual obligations. The association also has the right to appear or intervene before a court or agency in another state with jurisdiction over an impaired or insolvent insurer for which the association is or may become obligated or with jurisdiction over any person or property against whom the association may have rights through subrogation or otherwise.    A person receiving benefits under this part is deemed to have assigned the rights under, and any causes of action against any person for losses arising under, resulting from, or otherwise relating to, the covered policy or contract to the association to the extent of the benefits received because of this part, whether the benefits are payments of or on account of contractual obligations, continuation of coverage, or provision of substitute or alternative policies, contracts, or coverages. The association may require an assignment to it of the rights and cause of action by any enrollee, payee, policy, or contract owner, beneficiary, insured, or annuitant as a condition precedent to the receipt of any right or benefits conferred by this part upon the person.   The subrogation rights of the association under this subsection (k) have the same priority against the assets of the impaired or insolvent insurer as that possessed by the person entitled to receive benefits under this part.   In addition to subdivisions (k)(1) and (2), the association has all common law rights of subrogation and any other equitable or legal remedy that would have been available to the impaired or insolvent insurer or owner, beneficiary, enrollee, or payee of a policy or contract with respect to the policy or contracts.   If the preceding provisions of this subsection (k) are invalid or ineffective with respect to any person or claim for any reason, the amount payable by the association with respect to the related covered obligations must be reduced by the amount realized by any other person with respect to the person or claim that is attributable to the policies or contracts or portion thereof covered by the association.   If the association has provided benefits with respect to a covered obligation and a person recovers amounts as to which the association has rights as described in this subsection (k), the person shall pay to the association the portion of the recovery attributable to the policies or contracts or portion thereof covered by the association.     In addition to the rights and powers elsewhere in this part, the association may:  Enter into contracts as are necessary or proper to carry out the provisions and purposes of this part;   Sue or be sued, including taking any legal actions necessary or proper to recover any unpaid assessments under  56-12-208 and to settle claims or potential claims against it;   Borrow money to effect the purposes of this part. Any notes or other evidence of indebtedness of the association not in default shall be legal investments for domestic member insurers and may be carried as admitted assets;   Employ or retain persons as are necessary or appropriate to handle the financial transactions of the association, and to perform other functions as become necessary or proper under this part;   Take legal action as may be necessary or appropriate to avoid or recover payment of improper claims;   Exercise, for the purposes of this part and to the extent approved by the commissioner, the powers of a domestic life insurer, health insurer, or health maintenance organization, but in no case may the association issue policies or contracts other than those issued to perform its obligations under this part;   Organize itself as a corporation or in other legal form permitted by the laws of the state;   Request information from a person seeking coverage from the association in order to aid the association in determining its obligations under this part with respect to the person, and the person shall promptly comply with the request;   Unless prohibited by law, in accordance with the terms and conditions of the policy or contract, file for actuarially justified rate or premium increases for any policy or contract for which it provides coverage under this part; and   Take other necessary or appropriate action to discharge its duties and obligations under this part or to exercise its powers under this part.     The association may join an organization of one (1) or more other state associations of similar purposes, to further the purposes and administer the powers and duties of the association.     At any time within one hundred eighty (180) days of the date of the order of liquidation, the association may elect to succeed to the rights and obligations of the ceding member insurer that relate to policies, contracts, or annuities covered, in whole or in part, by the association, in each case under any one (1) or more reinsurance contracts entered into by the insolvent insurer and its reinsurers and selected by the association. Any assumption is effective as of the date of the order of liquidation. The election is effected by the association or the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) on its behalf sending written notice, return receipt requested, to the affected reinsurers.   To facilitate the earliest practicable decision about whether to assume any of the contracts of reinsurance, and in order to protect the financial position of the estate, the receiver and each reinsurer of the ceding member insurer shall make the following available upon request to the association or to NOLHGA on its behalf as soon as possible after commencement of formal delinquency proceedings:   Copies of in-force contracts of reinsurance and all related files and records relevant to the determination of whether the contracts should be assumed; and   Notices of any defaults under the reinsurance contracts or any known event or condition that with the passage of time could become a default under the reinsurance contracts.     The following apply to reinsurance contracts assumed by the association:   The association is responsible for all unpaid premiums due under the reinsurance contracts for periods both before and after the date of the order of liquidation, and is responsible for the performance of all other obligations to be performed after the date of the order of liquidation, in each case that relates to policies, contracts, or annuities covered, in whole or in part, by the association. The association may charge policies, contracts, or annuities covered in part by the association, through reasonable allocation methods, the costs for reinsurance in excess of the obligations of the association and shall provide notice and an accounting of these charges to the liquidator;   The association is entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods after the date of the order of liquidation and that relate to policies, contracts, or annuities covered, in whole or in part, by the association. Upon receipt of any such amounts, the association is obliged to pay to the beneficiary under the policy, contracts, or annuity on account of which the amounts were paid a portion of the amount equal to the lesser of:  The amount received by the association; or   The excess of the amount received by the association over the amount equal to the benefits paid by the association on account of the policy, contracts, or annuity less the retention of the insurer applicable to the loss or event;     Within thirty (30) days following the association's election, the association and each reinsurer under contracts assumed by the association shall calculate the net balance due to or from the association under each reinsurance contract as of the election date with respect to policies, contracts, or annuities covered, in whole or in part, by the association, which calculation must give full credit to all items paid by either the member insurer or its receiver or the reinsurer prior to the election date. The reinsurer shall pay the receiver any amounts due for losses or events prior to the date of the order of liquidation, subject to any set-off for premiums unpaid for periods prior to the date, and the association or reinsurer shall pay any remaining balance due the other, in each case within five (5) days of the completion of the calculation. Any disputes over the amounts due to either the association or the reinsurer must be resolved by arbitration pursuant to the terms of the affected reinsurance contracts or, if the contract contains no arbitration clause, as otherwise provided by law. If the receiver has received any amounts due the association pursuant to subdivision (n)(1)(C)(ii), the receiver shall remit the same to the association as promptly as practicable; and   If the association or receiver, on the association's behalf, within sixty (60) days of the election date, pays the unpaid premiums due for periods both before and after the election date that relate to policies, contracts, or annuities covered, in whole or in part, by the association, the reinsurer is not entitled to terminate the reinsurance contracts for failure to pay premium insofar as the reinsurance contracts relate to policies, contracts, or annuities covered, in whole or in part, by the association, and is not entitled to set off any unpaid amounts due under other contracts, or unpaid amounts due from parties other than the association, against amounts due the association.       During the period from the date of the order of liquidation until the election date, or, if the election date does not occur, until one hundred eighty (180) days after the date of the order of liquidation:    Neither the association nor the reinsurer has any rights or obligations under reinsurance contracts that the association has the right to assume under subdivision (n)(1), whether for periods prior to or after the date of the order of liquidation; and   The reinsurer, the receiver, and the association shall, to the extent practicable, provide each other data and records reasonably requested; and     Provided that once the association has elected to assume a reinsurance contract, the parties' rights and obligations are governed by subdivision (n)(1).     If the association does not elect to assume a reinsurance contract by the election date pursuant to subdivision (n)(1), the association has no rights or obligations for periods both before and after the date of the order of liquidation, with respect to the reinsurance contract.   When policies, contracts, or annuities, or covered obligations with respect thereto, are transferred to an assuming insurer, then the association may also transfer the reinsurance on the policies, contracts, or annuities in the case of contracts assumed under subdivision (n)(1), subject to the following:  Unless the reinsurer and the assuming insurer agree otherwise, the reinsurance contract transferred does not cover any new policies of insurance, contracts, or annuities in addition to those transferred;   The obligations described in subdivision (n)(1) no longer apply with respect to matters arising after the effective date of the transfer; and   The transferring party shall give notice in writing, return receipt requested, to the affected reinsurer not less than thirty (30) days prior to the effective date of the transfer.     This subsection (n) supersedes the provisions of any state law or of any affected reinsurance contract that provides for or requires any payment of reinsurance proceeds on account of losses or events that occur in periods after the date of the order of liquidation to the receiver of the insolvent insurer or any other person. The receiver remains entitled to any amounts payable by the reinsurer under the reinsurance contracts with respect to losses or events that occur in periods prior to the date of the order of liquidation, subject to applicable set-off provisions.   Except as otherwise provided in this section, nothing in this subsection (n) alters or modifies the terms and conditions of any reinsurance contract. Nothing in this section abrogates or limits any rights of any reinsurer to claim that it is entitled to rescind a reinsurance contract. Nothing in this section gives a policyholder, contract owner, enrollee, certificate holder, or beneficiary an independent cause of action against a reinsurer that is not otherwise set forth in the reinsurance contract. Nothing in this section limits or affects the association's rights as a creditor of the estate against the assets of the estate. Nothing in this section applies to reinsurance agreements covering property or casualty risks.     The board of directors of the association has discretion and shall exercise reasonable business judgment to determine the means by which the association is to provide the benefits of this part in an economical and efficient manner.   Where the association has arranged or offered to provide the benefits of this part to a covered person under a plan or arrangement that fulfills the association's obligations under this part, the person is not entitled to benefits from the association in addition to or other than those provided under the plan or arrangement.   Venue in a suit against the association arising under this part is in chancery court of Davidson County. The association is not required to give an appeal bond in an appeal that relates to a cause of action arising under this part.   In carrying out its duties in connection with guaranteeing, assuming, reissuing, or reinsuring policies or contracts under this section, the association may issue substitute coverage for a policy or contract that provides an interest rate, crediting rate, or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with the following:  In lieu of the index or other external reference provided for in the original policy or contract, the alternative policy or contract provides for:  A fixed interest rate;   Payment of dividends with minimum guarantees; and   A different method for calculating interest or changes in value;     There is no requirement for evidence of insurability, waiting period, or other exclusion that would not have applied under the replaced policy or contract; and   The alternative policy or contract is substantially similar to the replaced policy or contract in all other material terms.     
  For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers, separately for each account, at such time and for such amounts as the board finds necessary. Assessments are due not less than thirty (30) days after prior written notice to the member insurers and accrue interest at ten percent (10%) per annum on and after the due date.   There are two (2) classes of assessments, as follows:  Class A assessments are made for the purpose of meeting administrative and legal costs and other expenses and examinations conducted under the authority of  56-12-211(e). Class A assessments may be made whether or not related to a particular impaired or insolvent insurer; and   Class B assessments are made to the extent necessary to carry out the powers and duties of the association pursuant to  56-12-207 with regard to an impaired or an insolvent insurer.      The amount of any Class A assessment is determined by the board and may be made on a pro rata or non-pro rata basis. If pro rata, the board may provide that it be credited against future Class B assessments.   The amount of any Class B assessment, except for assessments related to long-term care insurance, must be allocated for assessment purposes between the accounts and subaccounts of the life insurance and annuity account pursuant to an allocation formula that may be based on the premiums or reserves of the impaired or insolvent insurer, or any other standard deemed by the board in its sole discretion as being fair and reasonable under the circumstances.   The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent member insurer must be allocated according to a methodology included in the plan of operation and approved by the commissioner. The methodology must provide for fifty percent (50%) of the assessment to be allocated to accident and health member insurers and fifty percent (50%) allocated to life and annuity member insurers.   Class B assessments against member insurers for each account and subaccount must be in the proportion that the premiums received on business in this state by each assessed member insurer on policies or contracts covered by each account for the three (3) most recent calendar years for which information is available preceding the year in which the member insurer became impaired or insolvent, as the case may be, bears to the premiums received on business in this state for those calendar years by all assessed member insurers.   Assessments for funds to meet the requirements of the association with respect to an impaired or insolvent insurer must not be made until necessary to implement the purposes of this part. Classification of assessments by subsection (b) and computation of assessments by this subsection (c) must be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible.     The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated, or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section.     Subject to subdivision (e)(1)(B), the total of all assessments authorized by the association with respect to a member insurer for each subaccount of the life insurance and annuity account and for the health account must not in one (1) calendar year exceed two percent (2%) of that member insurer's average annual premiums received in this state on the policies and contracts covered by the subaccount or account during the three (3) calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.   If two (2) or more assessments are authorized in one (1) calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation referenced in subdivision (e)(1)(A) must be equal and limited to the higher of the three-year average annual premiums for the applicable subaccount or account as calculated pursuant to this section.   If the maximum assessment, together with the other assets of the association in an account, does not provide in one (1) year in either account an amount sufficient to carry out the responsibilities of the association, the necessary additional funds must be assessed as soon thereafter as permitted by this part.     The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one (1) or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.   If the maximum assessment for a subaccount of the life and annuity account in one (1) year does not provide an amount sufficient to carry out the responsibilities of the association, then pursuant to subdivision (c)(2), the board has the authority to assess the other subaccounts of the life and annuity account for the necessary additional amount, subject to the maximum stated in subdivision (e)(1).     The board may, by an equitable method established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association with regard to that account, including assets accruing from assignment, subrogation, net realized gains, and income from investment. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future claims.   It is proper for any member insurer, in determining its premium rates and policy owner dividends as to any kind of insurance or health maintenance organization business within the scope of this part, to consider the amount reasonably necessary to meet its assessment obligations under this part.   The association shall issue to each member insurer paying an assessment under this part, other than Class A assessments, a certificate of contribution, in a form prescribed by the commissioner, for the amount of the assessment paid. All outstanding certificates must be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in the form and for the amount, if any, and period of time as the commissioner may approve.    A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment set forth in the notice provided by the association so that the payment is available to meet association obligations during the pendency of the protest or any subsequent appeal. Payment must be accompanied by a written statement that the payment is made under protest and setting forth a brief statement of the grounds for the protest.   Except as provided in subdivision (i)(4), within sixty (60) days following the payment of an assessment under protest by a member insurer, the association shall notify the member insurer in writing of its determination with respect to the protest unless the association notifies the member insurer that additional time is required to resolve the issues raised by the protest.   Within thirty (30) days after a final decision has been made, the association shall notify the protesting member insurer in writing of that final decision. Within sixty (60) days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the commissioner.   In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the association may refer protests to the commissioner for a final decision, with or without a recommendation from the association.   If the protest or appeal on the assessment is upheld, then the association shall return the amount paid in error or excess plus applicable interest to the member insurer. Interest on a refund due a protesting member insurer must be paid at the rate actually earned by the association.     The association may request information of member insurers in order to aid in the exercise of its power under this section, and member insurers shall promptly comply with a request.   
   The association shall submit to the commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the association. The plan of operation and any amendments thereto shall become effective upon the commissioner's written approval or within thirty (30) days if the commissioner has not disapproved it during such thirty-day period.   If an association fails to submit suitable amendments to the plan, the commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate this part. Such rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the association and approved by the commissioner.     All member insurers shall comply with the plan of operation.   The plan of operation shall, in addition to requirements enumerated elsewhere in this part:  Establish procedures for handling the assets of the association;   Establish the amount and method of reimbursing members of the board of directors under  56-12-206;   Establish regular places and times for meetings including telephone conference calls of the board of directors;   Establish procedures for records to be kept of all financial transactions of the association, its agents, and the board of directors;   Establish the procedures whereby selections for the board of directors will be made and submitted to the commissioner;   Establish any additional procedures for assessments pursuant to  56-12-208; and   Contain additional provisions necessary or proper for the execution of the powers and duties of the association.     The plan of operation may provide that any or all powers and duties of the association, except those set forth in  56-12-207(k)(3) and 56-12-208, are delegated to a corporation, association, or other organization that performs or will perform functions similar to those of this association, or its equivalent, in two (2) or more states. Such a corporation, association, or organization shall be reimbursed for any payments made on behalf of the association and shall be paid for its performance of any function of the association. A delegation under this subsection (d) shall take effect only with the approval of both the board of directors and the commissioner, and may be made only to a corporation, association, or organization that extends protection not substantially less favorable and effective than that provided by this part.   
  In addition to the duties and powers enumerated elsewhere in this part, the commissioner shall:  Upon request of the board of directors, provide the association with a statement of the premiums in this and any other appropriate states for each member insurer;   When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time; notice to the impaired insurer shall constitute notice to its shareholders, if any; the failure of the insurer to promptly comply with such demand shall not excuse the association from the performance of its powers and duties under this part; and   In any liquidation or rehabilitation proceeding involving a domestic insurer, be appointed as the liquidator or rehabilitator.     The commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer who fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a forfeiture on any member insurer who fails to pay an assessment when due. Such forfeiture shall not exceed five percent (5%) of the unpaid assessment per month, but no forfeiture shall be less than one hundred dollars ($100) per month.   Any action of the board of directors or the association may be appealed to the commissioner by any member insurer, if such appeal is taken within sixty (60) days of the final action which is being appealed. If a member company is appealing an assessment, the amount assessed shall be paid to the association and be available to meet association obligations during the pendancy of an appeal. If the appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member company. Any final action or order of the commissioner shall be subject to judicial review in a court of competent jurisdiction.   The liquidator, rehabilitator or conservator of any impaired insurer may notify all interested persons of the effect of this part.   
  To aid in the detection and prevention of insurer insolvencies or impairments, it shall be the duty of the commissioner to:  Notify the commissioner of insurance, or other appropriate official, of all the other states, territories of the United States and the District of Columbia, when the commissioner takes any of the following actions against a member insurer:  Revocation of license;   Suspension of license; or   Makes any formal order that such company restrict its premium writing, obtain additional contributions to surplus, withdraw from the state, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policyholders or creditors.  Such notice shall be mailed to all such commissioners or other appropriate officials within thirty (30) days following the action taken or the date on which such action occurs;      Report to the board of directors when the commissioner has taken any of the actions set forth in subdivision (a)(1), or has received a report from any other commissioner indicating that any such action has been taken in another state. Such report to the board of directors shall contain all significant details of the action taken or the report received from another commissioner or other appropriate official;   Report to the board of directors when the commissioner has reasonable cause to believe from any examination, whether completed or in process, of any member company, that such company may be an impaired or insolvent insurer; and   Furnish to the board of directors of the National Association of Insurance Commissioners, insurance regulatory information system ratios and listings of companies not included in the ratios developed by the National Association of Insurance Commissioners. The board may then use the information contained therein in carrying out its duties and responsibilities under this section. Such report and the information contained in the report shall be kept confidential by the board of directors, until such time as made public by the commissioner or other lawful authority.     The commissioner may seek the advice and recommendations of the board of directors concerning any matter affecting the duties and responsibilities of the commissioner regarding the financial condition of member insurers and companies seeking admission to transact insurance business in this state.   The board of directors may, upon majority vote, make reports and recommendations to the commissioner upon any matter relative to the solvency, liquidation, rehabilitation or conservation of any member insurer or relative to the solvency of any company seeking to transact insurance business in this state. Such reports and recommendations shall not be considered public documents.   It is the duty of the board of directors, upon majority vote, to notify the commissioner of any information indicating any member insurer may be an impaired or insolvent insurer.    The board of directors may, upon majority vote, request that the commissioner order an examination of any member insurer that the board in good faith believes may be an impaired or insolvent insurer. Within thirty (30) days of the receipt of such request, the commissioner shall begin such examination. The examination may be conducted as a National Association of Insurance Commissioners examination or may be conducted by such persons as the commissioner designates. The cost of such examination shall be paid by the association and the examination report shall be treated as are other examination reports. In no event shall such examination report be released to the board of directors prior to its release to the public, but this shall not preclude the commissioner from complying with subsection (a).   The commissioner shall notify the board of directors when the examination is completed. The request for an examination shall be kept on file by the commissioner, but it shall not be open to public inspection prior to the release of the examination report to the public.     The board of directors may, upon majority vote, make recommendations to the commissioner for the detection and prevention of insurer insolvencies.   The board of directors shall, at the conclusion of any insurer insolvency in which the association was obligated to pay covered claims, prepare a report to the commissioner containing such information as it may have in its possession relative to the history and causes of such insolvency. The board shall cooperate with the boards of directors of guaranty associations in other states in preparing a report on the history and causes of insolvency of a particular insurer, and may adopt by reference any report prepared by such other associations.   
   A member insurer may offset against any premium, franchise, excise or income tax liability or liabilities to this state an assessment described in  56-12-208(h) to the extent of the lesser of:  Ten percent (10%) of the amount of such assessment for each of the ten (10) calendar years following the year in which such assessment was paid; or   One tenth of one percent (0.10%) of all premiums written in this state by the member insurer for each calendar year until recovery of the assessment or assessments is made.     In the event a member insurer ceases doing business in this state, all uncredited assessments may be credited against any premium, franchise, excise, or income tax due for the year it ceases doing business.     A member insurer may transfer any offset right as described in this section to an affiliated member insurer. As used in this section:  Affiliated member insurer means an insurance company licensed or holding a certificate of authority to do business in this state that controls, is controlled by, or is under common control with, another member insurer; and   Control means holding, directly or indirectly, the ownership of, or power to vote, one hundred percent (100%) of the voting stock of another member insurer.     Any sums that are acquired by refund, pursuant to  56-12-208(f), from the association by member insurers, and that have theretofore been offset against premium, franchise, excise, or income taxes as provided in subsection (a), shall be paid by such insurers to this state in such manner as the tax authorities may require. The association shall notify the commissioner that such refunds have been made.   
  Nothing in this part shall be construed to reduce the liability for unpaid assessments of the insureds of an impaired or insolvent insurer operating under a plan with assessment liability.   Records shall be kept of all negotiations and meetings in which the association or its representatives discuss the activities of the association in carrying out its powers and duties as created by  56-12-207. Records of such negotiations or meetings shall be made public only upon the termination of a liquidation, rehabilitation, or conservation proceeding involving the impaired or insolvent insurer, upon the termination of the impairment or insolvency of the insurer, or upon the order of a court of competent jurisdiction. Nothing in this subsection (b) shall limit the duty of the association to render a report of its activities pursuant to  56-12-214.   For the purpose of carrying out its obligations under this part, the association shall be deemed to be a creditor of the impaired or insolvent insurer to the extent of assets attributable to covered policies, reduced by any amounts to which the association is entitled as subrogee pursuant to  56-12-207(k). Assets of the impaired or insolvent insurer attributable to covered policies shall be used to continue all covered policies and pay all contractual obligations of the impaired or insolvent insurer as required by this part. Assets attributable to covered policies, as used in this subsection (c), are that proportion of the assets that the reserves that should have been established for such policies bear to the reserves that should have been established for all policies of insurance written by the impaired or insolvent insurer.    Prior to the termination of any liquidation, rehabilitation, or conservation proceeding, the court may take into consideration the contributions of the respective parties, including the association, the shareholders, and policyowners of the insolvent insurer, and any other party with a bona fide interest, in making an equitable distribution of the ownership rights of such insolvent insurer. In such a determination, consideration shall be given to the welfare of the policyholders of the continuing or successor insurer.   No distribution to stockholders, if any, of an impaired or insolvent insurer shall be made until and unless the total amount of valid claims of the association with interest thereon for funds expended in carrying out its powers and duties as created by  56-12-207 with respect to such insurer have been fully recovered by the association.      If an order for liquidation or rehabilitation of an insurer domiciled in this state has been entered, the receiver appointed under such order shall have a right to recover on behalf of the insurer, from any affiliate that controlled it, the amount of distributions, other than stock dividends paid by the insurer on its capital stock, made at any time during the five (5) years preceding the petition for liquidation or rehabilitation, subject to the limitations of subdivisions (e)(2)-(4).   No such distribution shall be recoverable, if the insurer shows that when paid the distribution was lawful and reasonable, and that the insurer did not know, and could not reasonably have known, that the distribution might adversely affect the ability of the insurer to fulfill its contractual obligations.   Any person who was an affiliate that controlled the insurer at the time the distributions were paid shall be liable up to the amount of distributions received. Any person who was an affiliate that controlled the insurer at the time the distributions were declared shall be liable up to the amount of distributions the person would have received if they had been paid immediately. If two (2) or more persons are liable with respect to the same distributions, they shall be jointly and severally liable.   The maximum amount recoverable under this subsection (e) shall be the amount needed in excess of all other available assets of the insolvent insurer to pay the contractual obligations of the insolvent insurer.   If any person liable under subdivision (e)(3) is insolvent, all its affiliates that controlled it at the time the distribution was paid shall be jointly and severally liable for any resulting deficiency in the amount recovered from the insolvent affiliate.     
  The association shall be subject to examination and regulation by the commissioner.   The board of directors shall submit to the commissioner each year, not later than one hundred twenty (120) days after the association's fiscal year, a financial report in a form approved by the commissioner and a report of its activities during the preceding fiscal year.   
 The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions, except taxes levied on real property.  
  There shall be no liability on the part of, and no cause of action of any nature shall arise against, any member insurer or its agents or employees, the association or its agents or employees, members of the board of directors, or the commissioner or the commissioner's representatives, for any action or omission by them in the performance of their powers and duties under this part.   This immunity shall extend to the participation in any organization of one (1) or more other state associations of similar purposes and to any such organization and its agents or employees.   
  All proceedings in which the insolvent insurer is a party in any court in this state shall be stayed sixty (60) days from the date an order of liquidation, rehabilitation, or conservation is final to permit proper legal action by the association on any matters relative to its powers or duties.   As to judgment under any decision, order, verdict, or finding based on default, the association may apply to have the judgment set aside by the same court that entered the judgment and shall be permitted to defend against the suit on the merits.   
  No person, including a member insurer or agent or affiliate of a member insurer shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio or television broadcast, or in any other way, any advertisement, announcement, or statement, written or oral, that uses the existence of the Tennessee life and health insurance guaranty association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by this part. However, this section does not apply to the Tennessee life and health insurance guaranty association or any other entity that does not sell or solicit insurance or coverage by a health maintenance organization.   The association shall prepare a summary document that describes the general purposes and current limitations of this part and that complies with subsection (c). This document must be submitted to the commissioner for approval. At the expiration of the sixtieth day after the date on which the commissioner approves the document, a member insurer shall not deliver a policy or contract to a policy owner, contract owner, certificate holder, or enrollee unless the summary document is delivered to the policy owner, contract owner, certificate holder, or enrollee at the time of delivery of the policy or contract. The document must also be available upon request by a policy owner, contract owner, certificate holder, or enrollee. The distribution, delivery, or contents or interpretation of this document does not guarantee that either the policy or the contract, or the policy owner, contract owner, certificate holder, or enrollee is covered in the event of the impairment or insolvency of a member insurer. The association shall revise the document as amendments to this part require. Failure to receive the summary document does not give the policy owner, contract owner, certificate holder, enrollee, or insured any greater rights than those stated in this part.   The document prepared under subsection (b) must contain a clear and conspicuous disclaimer on its face. The commissioner shall establish the form and content of the disclaimer. The disclaimer must:  State the name and address of the Tennessee life and health insurance guaranty association and department of commerce and insurance;   Prominently warn the policy owner, contract owner, certificate holder, or enrollee that the Tennessee life and health insurance guaranty association may not cover the policy or contract or, if coverage is available, it will be subject to substantial limitations and exclusions and conditioned on continued residence in this state;   State the types of policies or contracts for which guaranty funds will provide coverage;   State that the member insurer and its agents are prohibited by law from using the existence of the Tennessee life and health insurance guaranty association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or health maintenance organization coverage;   State that the policy owner, contract owner, certificate holder, or enrollee should not rely on coverage under the Tennessee life and health insurance guaranty association when selecting an insurer or health maintenance organization;   Explain the rights available and procedures provided for filing a complaint to allege a violation of this part; and   Provide other information as directed by the commissioner, including, but not limited to, sources for information about the financial condition of insurers; provided, that the information is not proprietary or is not protected from disclosure under Tennessee's public records law.     A member insurer shall retain evidence of compliance with subsection (b) for so long as the policy or contract for which the notice is given remains in effect.   
 This part does not apply to any insurer that is insolvent or unable to fulfill its contractual obligations on July 1, 1989.  
  The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this part.   All such rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
  This chapter shall be known and may be cited as the Revised Tennessee Captive Insurance Act.   The purpose of this chapter is to establish the procedures for the organization and regulation of the operations of captive insurance companies within this state and thereby promote the general welfare of the people of this state.   
 As used in this chapter, unless the context requires otherwise:   Affiliated company means any company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management;   Alien means a company formed according to the legal requirements of a foreign country;   Association means any legal association of individuals, corporations, limited liability companies, partnerships, associations, or other entities, whereby:  The member organizations of such or the association itself, whether or not in conjunction with some or all of the member organizations:   Own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurance company incorporated as a stock insurer;   Have complete voting control over an association captive insurance company incorporated as a mutual insurer;   Constitute all of the subscribers of an association captive insurance company formed as a reciprocal insurer; or   Have complete voting control over an association captive insurance company formed as a limited liability company; or     Each member organization of the association is either:   A not-for-profit corporation, nonprofit association, or similar nonprofit organization;   An entity or organization exempt from taxation under  501(c) of the Internal Revenue Code (26 U.S.C.  501(c)); or   A municipality, metropolitan government, county, authority, utility district or other public body generally classified as a governmental body or governmental entity, whether organized by private act or public act of the general assembly, or any agency, board, or commission of any municipality, metropolitan government, county, authority, utility district or other public body generally classified as a governmental body or governmental entity. This subdivision (3)(B)(iii) shall be liberally construed;       Association captive insurance company means any company that insures risks of the member organizations of an association, and that also may insure the risks of affiliated companies of the member organizations and the risks of the association itself;   Captive insurance company means any pure captive insurance company, association captive insurance company, industrial insured captive insurance company, risk retention group, protected cell captive insurance company, incorporated cell captive insurance company, or special purpose financial captive insurance company formed or licensed under this chapter;   Commissioner means the commissioner of the department, or the commissioner's designee;   Controlled unaffiliated business means any person:  That is not in the corporate system of a parent and its affiliated companies in the case of a pure captive insurance company, or that is not in the corporate system of an industrial insured and its affiliated companies in the case of an industrial insured captive insurance company;   That has an existing contractual relationship with a parent or one (1) of its affiliated companies in the case of a pure captive insurance company, or with an industrial insured or one (1) of its affiliated companies in the case of an industrial insured captive insurance company; and   Whose risks are managed by a pure captive insurance company or an industrial insured captive insurance company, as applicable, in accordance with  56-13-117;     Department means the department of commerce and insurance;   Excess workers' compensation insurance or excess accident and health insurance means, in the case of an employer that has insured or self-insured its workers' compensation or accident and health insurance risks in accordance with applicable state or federal law, insurance in excess of a specified per incident or aggregate limit established by the commissioner;   Incorporated cell means a protected cell of an incorporated cell captive insurance company that is organized as a corporation or other legal entity separate from the incorporated cell captive insurance company;   Incorporated cell captive insurance company means a protected cell captive insurance company that is established as a corporation or other legal entity separate from its incorporated cells that are also organized as separate legal entities;   Industrial insured means an insured:  Who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;   Whose aggregate annual premiums for insurance on all risks total at least twenty-five thousand dollars ($25,000); and   Who has at least twenty-five (25) full-time employees;     Industrial insured captive insurance company means any company that insures risks of the industrial insureds that comprise the industrial insured group, and that may insure the risks of the affiliated companies of the industrial insureds and the risks of the controlled unaffiliated business of an industrial insured or its affiliated companies;   Industrial insured group means any group of industrial insureds that collectively:  Own, control, or hold with power to vote all of the outstanding voting securities of an industrial insured captive insurance company incorporated as a stock insurer;   Have complete voting control over an industrial insured captive insurance company incorporated as a mutual insurer;   Constitute all of the subscribers of an industrial insured captive insurance company formed as a reciprocal insurer; or   Have complete voting control over an industrial insured captive insurance company formed as a limited liability company;     Member organization means any individual, corporation, limited liability company, partnership, association, or other entity that belongs to an association;   Mutual corporation means a corporation organized without stockholders and includes a nonprofit corporation with members;   Mutual insurer means a company owned by its policyholders where no stock is available for purchase on the stock exchanges;   Organizational documents means the documents that must be submitted pursuant to title 48 and title 61 in order to legally form a business in this state or to obtain a certificate of authority to transact business in this state;   Parent means an individual, corporation, limited liability company, partnership, association, or other entity, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty  percent (50%) of the outstanding voting:  Securities of a pure captive insurance company organized as a stock corporation;   Membership interests of a pure captive insurance company organized as a nonprofit corporation; or   Membership interests of a pure captive insurance company organized as a limited liability company;     Pure captive insurance company means any company that insures risks of its parent and affiliated companies or a controlled unaffiliated business or businesses; and   Risk retention group means a captive insurance company organized under the laws of this state pursuant to the Liability Risk Retention Act of 1986, as amended, (15 U.S.C.  3901 et seq.), as a stock or mutual corporation, a reciprocal or other limited liability entity. Risk retention groups formed under this chapter are subject to all applicable insurance laws including, but not limited to any applicable provisions in Chapters 1 2, 5, 6, 11, and 45 of this title.   
  Any captive insurance company, when permitted by its organizational documents, may apply to the commissioner for a license to do any and all insurance comprised in  56-2-201(2) and (4)-(7), 56-2-202, 56-2-203, and 56-2-204; provided, however, that:  No pure captive insurance company shall insure any risks other than those of its parent and affiliated companies or a controlled unaffiliated business or businesses;   No association captive insurance company shall insure any risks other than those of its association, those of the member organizations of its association, and those of a member organization's affiliated companies;   No industrial insured captive insurance company shall insure any risks other than those of the industrial insureds that comprise the industrial insured group, those of their affiliated companies, and those of the controlled unaffiliated business of an industrial insured or its affiliated companies;   No risk retention group shall insure any risks other than those of its members and owners;   No captive insurance company shall provide personal motor vehicle or homeowner's insurance coverage or any component thereof;   No captive insurance company shall accept or cede reinsurance except as provided in  56-13-112 and 56-13-412;   Any captive insurance company may provide excess or stop-loss accident and health insurance, unless prohibited by federal law or the laws of the state having jurisdiction over the transaction;   Except as provided in subdivision (a)(9), a captive insurance company may only issue policies of workers' compensation insurance to an insured or an affiliate who otherwise qualifies and maintains its qualifications as a self-insured under title 50, chapter 6; provided, that a captive insurance company may provide excess or stop-loss workers' compensation coverage for those insureds not qualifying as self-insureds. The commissioner has the discretion to waive the requirements of this subdivision (a)(8) and the self-insurance requirements of  50-6-405(b) and (c), according to guidelines established through the promulgation of rules or regulations; and   Any association captive insurance company of an association that is described in  56-13-102(3)(B) or mutual captive insurance company whose member organizations or insureds are the type member organizations described in  56-13-102(3)(B) may issue policies of workers' compensation, directors' and officers' liability, and public officials' liability insurance and reinsurance in addition to the insurance and reinsurance otherwise permitted to be made under this section.     Except as provided in subsection (f), no captive insurance company shall transact any insurance business in this state unless:  It first obtains from the commissioner a license authorizing it to do insurance business in this state;   Its board of directors or committee of members or managers or, in the case of a reciprocal insurer, its subscribers' advisory committee holds at least one (1) meeting each year in this state;   It maintains its principal place of business in this state; and   It appoints a registered agent to accept service of process and to otherwise act on its behalf in this state; provided, that whenever such registered agent cannot with reasonable diligence be found at the registered office of the captive insurance company, the commissioner shall be an agent of such captive insurance company upon whom any process, notice, or demand may be served.      In order to receive a license to issue policies of insurance as a captive insurance company in this state, an applicant business entity shall meet the requirements of this subdivision (c)(1).  The applicant business entity shall submit its organizational documents to the commissioner. If the commissioner approves the organizational documents, then the commissioner shall issue a letter to the applicant certifying the commissioner's approval. The applicant business entity shall submit the organizational documents, along with a copy of the approval letter issued by the commissioner, and the required filing fees for organizational documents prescribed in title 48 and title 61 to the secretary of state for filing. Upon filing the organizational documents, the secretary of state shall issue an acknowledgment letter to the applicant. The applicant business entity shall submit a copy of the acknowledgment letter relative to the applicant's organizational documents issued by the secretary of state to the commissioner.   The applicant business entity shall also file with the commissioner evidence of the following:   The amount and liquidity of its assets relative to the risks to be assumed;   The adequacy of the expertise, experience, and character of the person or persons who will manage it;   The overall soundness of its plan of operation;   The adequacy of the loss prevention programs of its insureds; and   Such other factors deemed relevant by the commissioner in ascertaining whether the applicant business entity will be able to meet its policy obligations.     No less than the amount required by  56-13-105 shall be paid in by the applicant business entity and deposited with the commissioner. In the alternative, an irrevocable letter of credit in that amount and acceptable to the commissioner shall be filed with the commissioner.   Upon compliance with subdivision (c)(1)(C), the applicant business entity shall be certified as compliant with this chapter through examination by the commissioner. The department shall be reimbursed for the cost of the examination in accordance with  56-1-413.   The applicant business entity shall submit to the commissioner for approval a description of the coverages, deductibles, coverage limits, and rates, together with such additional information as the commissioner may reasonably require.      Whenever a captive insurance company desires to amend the organizational documents submitted pursuant to subdivision (c)(1)(A), the company shall submit the amended organizational documents to the commissioner. If the commissioner approves the amendment, then the commissioner shall issue a letter to the applicant certifying the commissioner's approval. The applicant business entity shall submit the organizational documents, along with a copy of the approval letter issued by the commissioner, and the required filing fees for organizational documents prescribed in title 48 and title 61 to the secretary of state for filing. Upon filing the organizational documents, the secretary of state shall issue an acknowledgment letter to the applicant. The applicant shall submit a copy of the acknowledgment letter relative to the applicant's organizational documents issued by the secretary of state to the commissioner.   If a captive insurance company makes any subsequent material change to any item in the description submitted pursuant to subdivision (c)(1)(E), then the company shall submit an appropriate revision to the commissioner for approval and shall not offer any additional kinds of insurance until a revision of such description is approved by the commissioner. The captive insurance company shall inform the commissioner of any material change in rates within thirty (30) days of the adoption of such change.     Information submitted pursuant to this subsection (c) shall be and remain confidential, and shall not be made public by the commissioner without the written consent of the captive insurance company, except that:  Such information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted such information is a party, upon a showing by the party seeking to discover such information that:   The information sought is relevant to and necessary for the furtherance of such action or case;   The information sought is unavailable from other non-confidential sources; and   A subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner; provided, however, that this subdivision (c)(3) shall not apply to any risk retention group; and     The commissioner shall have the discretion to disclose such information to a public officer having jurisdiction over the regulation of insurance in another state; provided, that:   Such public official shall agree in writing to maintain the confidentiality of such information; and   The laws of the state in which such public official serves require such information to be and to remain confidential.         Each captive insurance company shall make payments to the commissioner in accordance with the fee schedule established in  chapter 4, part 1 of this title. The commissioner is authorized to retain legal, financial, and examination services from outside the department, the reasonable costs of which may be charged against the applicant. Sections 56-1-401  56-1-420 shall apply to examinations, investigations, and processing conducted under the authority of this section.   If the commissioner is satisfied that the documents and statements filed by an applicant captive insurance company comply with this chapter, then the commissioner may grant a license authorizing it to do insurance business in this state. The commissioner may make the license effective as of any date on or before the date the license is signed as long as the effective date is no earlier than the date of incorporation of the applicant captive insurance company.   Any captive insurance company licensed and in good standing on September 1, 2011, which was licensed under the former Tennessee Captive Insurance Act of 1978, shall not be required to obtain a new license as required in this section; provided, that any such captive insurance company is subject to the remainder of this chapter.   
  No captive insurance company shall adopt a name that is the same, deceptively similar, or likely to be confused with or mistaken for any other existing business name registered in this state, nor any name likely to mislead the public. Any name adopted by a captive insurance company shall comply with the requirements of titles 48 and 61.   A license issued pursuant to this chapter is a Certificate of Authority.   
  No captive insurance company shall be issued a license unless it possesses and maintains unimpaired paid-in capital and surplus of:  In the case of a pure captive insurance company, not less than two hundred fifty thousand dollars ($250,000);   In the case of an association captive insurance company, not less than five hundred thousand dollars ($500,000);   In the case of an industrial insured captive insurance company, not less than five hundred thousand dollars ($500,000);   In the case of a risk retention group, not less than one million dollars ($1,000,000); and   In the case of a protected cell captive insurance company, not less than two hundred fifty thousand dollars ($250,000).     The commissioner may prescribe additional capital and surplus based upon the type, volume, and nature of insurance business to be transacted.    Capital and surplus required under subsection (a) must be in the form of cash, cash equivalent, marketable securities, or an irrevocable letter of credit issued by a bank approved by the commissioner.   Marketable securities must consist of bonds of the United States, or any agency or instrumentality of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms, bonds of this state, or bonds publicly issued by any solvent institution created or existing under the laws of the United States or any state of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms.   Captive insurance companies using marketable securities to meet the capital and surplus requirements of subsection (a) shall file with the commissioner a certificate of an official with whom the securities are deposited, stating the time and amount, and that the official is satisfied that they are worth the amount required under subsection (a) and that the deposit is made with the official by the company for the protection of all policyholders and creditors.   Notwithstanding subdivision (c)(1), the commissioner may decline to accept as a deposit any specific issue of securities that the commissioner has determined may not provide the necessary protection to policyholders and creditors.     Except as otherwise provided in this chapter, chapter 9 of this title shall apply to captive insurance companies formed under this chapter.   
 No captive insurance company shall pay a dividend out of, or other distribution with respect to, capital or surplus without the prior approval of the commissioner. Approval of an ongoing plan for the payment of dividends or other distributions shall be conditioned upon the retention, at the time of each payment, of capital or surplus in excess of amounts specified by, or determined in accordance with formulas approved by the commissioner. A captive insurance company may otherwise make such distributions as are in conformity with its purposes and approved by the commissioner.  
  A pure captive insurance company may be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, as a nonprofit corporation with one (1) or more members, or as a limited liability company.   An association captive insurance company, an industrial insured captive insurance company, or a risk retention group may be:  Incorporated as a stock insurer with its capital divided into shares and held by the stockholders;   Incorporated as a mutual corporation;   Organized as a reciprocal insurer in accordance with chapter 16 of this title; or   Organized as a limited liability company.     A captive insurance company incorporated or organized in this state shall have not less than three (3) incorporators or three (3) organizers of whom not less than one (1) shall be a resident of this state.   The capital stock of a captive insurance company incorporated as a stock insurer may be authorized with no par value.   In the case of a captive insurance company formed as a:  Corporation, at least one (1) of the members of the board of directors shall be a resident of this state;   Reciprocal insurer, at least one (1) of the members of the subscribers' advisory committee shall be a resident of this state; and   Limited liability company, at least one (1) of the members or managers shall be a resident of this state.     Captive insurance companies formed as corporations, limited liability companies or as nonprofit corporations under this chapter shall have the privileges provided in and be subject to title 48 and this chapter, as applicable; provided, that this chapter shall control in the event of a conflict. Captive insurance companies formed as partnerships under this chapter shall have the privileges provided in and be subject to title 61 and this chapter, as applicable; provided, that this chapter shall control in the event of a conflict.   Mergers, consolidations, conversions, mutualizations, acquisitions, redomestications, or other similar transactions of captive insurance companies shall be subject to the same provisions of this title applicable to traditional insurance companies, except that:  The commissioner may, upon request of an insurer party to a merger authorized under this subsection (g), waive such applicable requirements;   The commissioner may waive or modify the requirements for public notice and hearing in accordance with rules which the commissioner may adopt addressing categories of transactions. If a notice of public hearing is required, but no one requests a hearing ten (10) days before the day set for the hearing, then the commissioner may cancel the hearing; and   An alien insurer may be a party to a merger authorized under this subsection (g); provided, that the requirements for a merger between a captive insurance company and a foreign insurer under this title shall apply to a merger between a captive insurance company and an alien insurer under this subsection (g). For the purposes of this subdivision (g)(3), an alien insurer shall be treated as a foreign insurer under this title and the jurisdiction of the alien shall be the equivalent of a state.     Captive insurance companies formed as reciprocal insurers under this chapter shall have the privileges provided in and be subject to chapter 16 of this title in addition to this chapter; provided, that this chapter shall control in the event of a conflict. To the extent a reciprocal insurer is made subject to other provisions of this title pursuant to chapter 16, such provisions shall not be applicable to a reciprocal insurer formed under this chapter unless such provisions are expressly made applicable to captive insurance companies under this chapter.   The articles of incorporation or bylaws of a captive insurance company formed as a corporation may authorize a quorum of its board of directors to consist of no fewer than one-third (1/3) of the fixed or prescribed number of directors.   The subscribers' agreement or other organizing document of a captive insurance company formed as a reciprocal insurer may authorize a quorum of its subscribers' advisory committee to consist of no fewer than one-third (1/3) of the number of its members.   With the commissioner's approval, a captive insurance company organized as a stock insurer may convert to a nonprofit corporation with one (1) or more members by filing with the secretary of state an election for such conversion; provided, that:  The election shall certify that, at the time of the company's original organization and at all times thereafter, the company has conducted its business in a manner not inconsistent with a nonprofit purpose as permitted by title 48, chapter 53; and   At the time of the filing of its election, the company shall file with both the commissioner and the secretary of state amended and restated articles of incorporation consistent with this chapter and with title 48, duly authorized by the corporation.     Title 48, chapter 61 shall not apply to a captive insurance company that is a nonprofit corporation in the case of any merger in which a captive insurance company merges with and into a captive insurance company organized as a nonprofit corporation under title 48 where the latter is the surviving corporation.   In the case of a captive insurance company formed as a limited liability company, a reciprocal insurance company or mutual insurance company, any proxy executed by the members, subscribers, and policyholders of each shall be valid if executed and transmitted in compliance with title 48.   
  No captive insurance companies shall be required to make any annual report except as provided in this chapter and as required by title 48 and title 61.   Prior to March 15 of each year, each captive insurance company shall submit to the commissioner a report of its financial condition, verified by oath of two (2) of its executive officers; provided, however, that a captive insurance company organized as a risk retention group shall instead submit to the commissioner a report of its financial condition prior to March 1 of each year, verified by oath of two (2) of its executive officers. Each captive insurance company, including risk retention groups organized under this chapter, shall report using generally accepted accounting principles, unless the commissioner requires, approves, or accepts the use of statutory accounting principles or other comprehensive basis of accounting. The commissioner may require, approve, or accept any appropriate or necessary modifications of the statutory accounting principles or other comprehensive basis of accounting for the type of insurance and kinds of insurers to be reported upon. The commissioner may require additional information to supplement such report. Except as otherwise provided, each risk retention group shall file its report in the form required by this title, and each risk retention group shall comply with the requirements set forth in this title. The commissioner shall by rule propose the forms in which pure captive insurance companies and industrial insured captive insurance companies shall report. Section 56-13-103(c)(3) shall apply to each report filed pursuant to this section; provided, that  56-13-103(c)(3) shall not apply to reports filed by risk retention groups.   A pure captive insurance company or an industrial insured captive insurance company may make written application to the commissioner for filing the required report on a fiscal year-end. If an alternative reporting date is granted by the commissioner, then:  The annual report is due one hundred and eighty (180) days after the fiscal year-end; and   In order to provide sufficient detail to support the premium tax return, the pure captive insurance company or industrial insured captive insurance company shall file, prior to March 15 of each year for each calendar year-end, such information as may be required on a form approved by the commissioner, verified by oath of two (2) of its executive officers.     
  At least once every three (3) years, and whenever the commissioner determines it to be prudent, the commissioner shall visit each captive insurance company and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations and whether it has complied with this chapter. The commissioner may extend such three-year period to five (5) years; provided, that the captive insurance company is subject to a comprehensive annual audit by independent auditors approved by the commissioner during such five-year period. The comprehensive audit shall be of a scope satisfactory to the commissioner. The expenses and charges of the examination shall be paid by the captive insurance company.   Any other law or regulation to the contrary notwithstanding, an association captive insurance company, all of whose insureds operate municipal or cooperative electric systems, shall not be required to have performed an audit of its annual statutory financial statements by an independent certified public accountant, unless, within ninety (90) days before the close of the fiscal year of the association captive insurance company, a majority of the association members who are insured, directly or indirectly by it, request an audit.   Sections 56-1-401  56-1-420 shall apply to examinations conducted under this section.   All examination reports, preliminary examination reports or results, working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this section are confidential and are not subject to subpoena and may not be made public by the commissioner or an employee or agent of the commissioner without the written consent of the captive insurance company, except to the extent provided in this subsection (d). Nothing in this subsection (d), shall prevent the commissioner from using such information in furtherance of the commissioner's regulatory authority under this title. The commissioner shall have the discretion to grant access to such information to public officers having jurisdiction over the regulation of insurance in any other state or country, or to law enforcement officers of this state or any other state or agency of the federal government at any time, only if the officers receiving the information agree in writing to maintain the confidentiality of the information in a manner consistent with this subsection (d).   
  The license of a captive insurance company may be suspended or revoked by the commissioner for any of the following reasons:  Insolvency or impairment of capital or surplus;   Failure to meet the requirements of  56-13-105;   Refusal or failure to submit an annual report, as required by this chapter, or any other report or statement required by law or by lawful order of the commissioner;   Failure to comply with its own charter, bylaws or other organizational document;   Failure to submit to or pay the cost of examination or any legal obligation relative to an examination, as required by this chapter;   Use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders; or   Failure otherwise to comply with the laws of this state.     If the commissioner finds, upon examination, hearing, or other evidence, that any captive insurance company has violated subsection (a), then the commissioner may suspend or revoke such company's license if the commissioner deems it in the best interest of the public and the policyholders of such captive insurance company, notwithstanding any other provision of this title.   
  Except as may be otherwise authorized by the commissioner, association captive insurance companies and risk retention groups shall comply with the investment requirements contained in  56-3-401  56-3-409, as applicable. Notwithstanding any other provision of this title, the commissioner may approve the use of alternative reliable methods of valuation and rating.   No pure captive insurance company, industrial insured captive insurance company, protected cell captive insurance company, incorporated cell captive insurance company or special purpose financial captive insurance company as defined in part 4 of this chapter shall be subject to any restrictions on allowable investments; provided, that the commissioner may prohibit or limit any investment that threatens the solvency or liquidity of any such company. Companies under this subsection (b) must file with the commissioner a statement of investment policy approved by its governing body that describes the types of investments that the company may elect to undertake and may not make investments that materially deviate from the statement of investment policy that is on file with the commissioner.   No pure captive insurance company shall make a loan to or an investment in its parent company or affiliates without prior written approval of the commissioner, and any such loan or investment shall be evidenced by documentation approved by the commissioner. Loans of minimum capital and surplus funds required by  56-13-105 are prohibited.    Notwithstanding this section or chapter 3, part 4 of this title, an association captive insurance company of an association described in  56-13-102(3)(B) may hold any interest in qualified headquarters property as defined in subdivision (d)(2), and the qualified headquarters property shall be admitted assets and authorized investments of the association captive insurance company. The net book value of the qualified headquarters property deemed admitted and authorized under this subsection (d) may not exceed two million five hundred thousand dollars ($2,500,000), and an association captive insurance company holding qualified headquarters property pursuant to this subsection (d) shall at all times maintain total surplus, without regard to the qualified headquarters property, of at least the sum of:  Fifty percent (50%) of the net book value of the qualified headquarters property; and   The minimum capital and surplus requirements.     For purposes of this subsection (d), qualified headquarters property includes the real property and the building in which the principal office of the association captive insurance company is located and also includes any improved and unimproved real property of the association captive insurance company that is located within one thousand five hundred feet (1,500') of the company's principal office.     
  Any captive insurance company may provide reinsurance as authorized by this title on risks ceded by any other insurer.   Any captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to reinsurers complying with this title. If the reinsurer is licensed as a risk retention group, then the ceding risk retention group or its members must qualify for membership with the reinsurer. The commissioner shall have the discretion to allow a captive insurance company to take credit for the reinsurance of risks or portions of risks ceded to an unauthorized reinsurer, after review, on a case by case basis. The commissioner may require any documents, financial information or other evidence that such an unauthorized reinsurer will be able to demonstrate adequate security for its financial obligations.   In addition to reinsurers authorized by this title, a captive insurance company may take credit for the reinsurance of risks or portions of risks ceded to a pool, exchange or association to the extent authorized by the commissioner. The commissioner may require any documents, financial information or other evidence that such a pool, exchange or association will be able to provide adequate security for its financial obligations. The commissioner may deny authorization or impose any limitations on the activities of a reinsurance pool, exchange or association that, in the commissioner's judgment, are necessary and proper to provide adequate security for the ceding captive insurance company and for the protection and consequent benefit of the public at large.   Except where specifically provided otherwise, insurance by a captive insurance company of any workers' compensation or accident and health qualified self-insured plan of its parent and affiliates, and the assumption of risk by a captive insurance company under any service contract issued by a parent or affiliate, is deemed to be reinsurance.   
  No captive insurance company shall be required to join a rating organization.   No captive insurance company shall be permitted to join or contribute financially to any plan, pool, association, or guaranty or insolvency fund in this state, nor shall any such captive insurance company, or any insured or affiliate thereof, receive any benefit from any such plan, pool, association, or guaranty or insolvency fund for claims arising out of the operations of such captive insurance company.   
  Each captive insurance company shall pay to the department, on or prior to March 15 of each year, a tax at the rate of four tenths of one percent (0.4%) on the first twenty million dollars ($20,000,000), and three-tenths of one percent (0.3%) on each dollar thereafter on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December 31 next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums. Return premiums shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders. No tax shall be due or payable under this title as to considerations received for annuity contracts.   Each captive insurance company shall pay to the department, on or prior to March 15 of each year, a tax at the rate of 225-thousandths of one percent (0.225%) on the first twenty million dollars ($20,000,000) of assumed reinsurance premium, and 150-thousandths of one percent (0.150%) on the next twenty million dollars ($20,000,000), and 50-thousandths of one percent (0.050%) on the next twenty million dollars ($20,000,000), and 25-thousandths of one percent (0.025%) of each dollar thereafter. However, no reinsurance tax applies to premiums for risks or portions of risks that are subject to taxation on a direct basis pursuant to subsection (a). No reinsurance premium tax shall be payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control; provided, that the commissioner verifies that such transaction is part of a plan to discontinue the operations of such other insurer, and if the intent of the parties to such transaction is to renew or maintain such business with the captive insurance company.    Except with regard to a protected cell captive insurance company, as defined in  56-13-202, with more than ten (10) cells, the annual minimum aggregate tax to be paid by a captive insurance company calculated under subsections (a) and (b) shall be five thousand dollars ($5,000), and the annual maximum aggregate tax shall be one hundred thousand dollars ($100,000).   For a protected cell captive insurance company with more than ten (10) cells, the annual minimum aggregate tax to be paid under subsections (a) and (b) shall be ten thousand dollars ($10,000), and the annual maximum aggregate tax shall be one hundred thousand dollars ($100,000), plus five thousand dollars ($5,000) multiplied by the number of cells over ten (10).   A dormant captive insurance company that has been issued a letter of dormancy under  56-13-124 is not subject to or liable for the payment of the annual minimum aggregate tax established under this subsection (c).     The tax provided for in this section shall constitute all taxes collectible under the laws of this state from any captive insurance company and from any insured on its payments to a captive insurance company, and no other occupation tax or other taxes shall be levied or collected from any captive insurance company by this state or any county, city, or municipality within this state, except ad valorem taxes on real and personal property used in the production of income.   Captive insurance companies, protected cells of captive insurance companies, and incorporated protected cells of captive insurance companies shall be subject to the fees in  56-4-101.   All premium taxes paid into the department under this chapter shall be held by the commissioner as expendable receipts for the purpose of administering this chapter and for promoting the Tennessee captive insurance industry.   The tax provided for in this section shall be calculated on an annual basis, notwithstanding policies or contracts of insurance or contracts of reinsurance issued on a multiyear basis. In the case of multiyear policies or contracts, the premium shall be prorated for purposes of determining the tax under this section.   Nothing in this section shall be construed to provide an exemption from the sales and use tax imposed by title 67, chapter 6.    Entities in this state, including industrial insureds as defined in  56-2-105(7), who have procured insurance from a captive insurance company and, on or before December 31, 2018, either redomesticate that captive insurance company to this state pursuant to this chapter or transfer a complete line of business or complete geographic risk into a captive formed in this state between January 1, 2016, and December 31, 2018, shall not be liable for any unreported taxes due pursuant to  56-2-411 on a policy or contract of insurance procured from the captive insurance company before the redomestication of the captive insurance company or transfer of line of business or complete geographic risk to this state; provided, that the policy or contract is substantially similar to a policy or contract of insurance procured from the captive insurance company after it is redomiciled or after the line of business or the complete geographic risk is transferred to this state.   In order for a transfer of a line of business or complete geographic risk to a Tennessee captive formed between January 1, 2016, and December 31, 2018, to qualify under subdivision (i)(1), the Tennessee captive formed between January 1, 2016, and December 31, 2018, must have and maintain, for no less than five (5) years from the date of formation, capital of at least fifteen million dollars ($15,000,000) and annual premiums of at least thirty million dollars ($30,000,000).      Any captive insurance company failing to pay premium tax payments as provided by this chapter shall forfeit and pay to the state, in addition to the amount of the unpaid taxes, a penalty of five hundred dollars ($500) 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 company shall pay an additional five hundred dollars ($500) for the second month or fractional part of the second month. Any premium tax payment that is not paid within sixty (60) days of the due date is a violation of this chapter and is subject to  56-13-120. The commissioner has the discretion, upon written application and for good cause shown, to waive the penalties of this subdivision (j)(1).   All delinquencies shall bear interest at the rate of ten percent (10%) per annum from the date the amount was due until paid. The interest shall apply to any part of the tax unpaid by the due date and no interest may be waived.     The commissioner shall promulgate rules governing the manner in which the premium tax shall be paid. The rules shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. The rules may provide for the making of premium tax payments through electronic means. The rules may also provide for a convenience fee to cover the costs of accepting electronic premium tax payments. In no event shall the convenience fee exceed the actual costs incurred by the department in accepting electronic premium tax payments in addition to any applicable penalty and interest fees.   
 The commissioner may adopt and, from time to time, amend such rules relating to captive insurance companies as are necessary to enable the commissioner to carry out the provisions of this chapter.  
 No provisions of this title, other than those contained in this chapter or expressly provided in this chapter, shall apply to captive insurance companies. Risk retention groups shall have the privileges and be subject to chapter 45 of this title in addition to the applicable provisions of this chapter. Section 56-2-801 applies to this chapter.  
 The commissioner may adopt rules establishing standards to ensure that a parent or its affiliated company, or an industrial insured or its affiliated company, is able to exercise control of the risk management function of any controlled unaffiliated business to be insured by a pure captive insurance company or an industrial insured captive insurance company, respectively; provided, however, that, until such time as rules under this section are adopted, the commissioner may approve the coverage of such risks by a pure captive insurance company or an industrial insured captive insurance company.  
  No captive insurance company shall make any material change or changes to its plan of operation until the department has approved the change or changes.   Each subsequent material change of plan of operation filed during each year is subject to the fee described in  56-4-101(a)(8).   For purposes of this section and  56-4-101(a)(8), the plan of operation and business plan have the same meaning.   A change in any information filed with the application that does not constitute a material change, or a change otherwise requiring commissioner approval, must be filed with the commissioner within thirty (30) days, but does not require prior approval under this section.   
 Any municipality, metropolitan government, county, authority, utility district, or other public body generally classified as a governmental body or governmental entity, whether organized by private act or public act of the general assembly, or otherwise, or any agency, board, or commission of any municipality, metropolitan government, county, authority, utility district, or other public body generally classified as a governmental body or governmental entity, may expend public funds other than local tax revenues for the purchase of capital stock in a captive insurance company or to provide guaranty capital in a mutual captive insurance company; provided, that at the time of authorization of expenditure of public funds adequate insurance markets in the United States are not available to cover the risks, hazards and liabilities of the public body or that the needed coverage is only available at excessive rates or with unreasonable deductibles.  
  If, after providing notice consistent with the process established by  4-5-320(c) and providing the opportunity for a contested case hearing held in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3, the commissioner finds that any insurer, person, or entity required to be licensed, permitted, or authorized to transact the business of insurance under this chapter has violated any provision of this chapter or any rule or regulation authorized by this chapter, the commissioner may order:  The insurer, person, or entity to cease and desist from engaging in the act or practice giving rise to the violation;   Payment of a monetary penalty of not more than one thousand dollars ($1,000) for each violation, but not to exceed an aggregate penalty of one hundred thousand dollars ($100,000), unless the insurer, person, or entity knowingly violates a statute, rule or order, in which case the penalty shall not be more than twenty-five thousand dollars ($25,000) for each violation, not to exceed an aggregate penalty of two hundred fifty thousand dollars ($250,000). This subdivision (a)(2) shall not apply where a statute or rule specifically provides for other civil penalties for the violation. For purposes of this subdivision (a)(2), each day of continued violation shall constitute a separate violation; and   The suspension or revocation of the insurer's, person's, or entity's license.     Section 56-13-103(c)(3) applies to any action taken by the commissioner pursuant to this section.   
 The commissioner is authorized to promulgate rules and regulations necessary to effectuate the purposes of this chapter; provided, that, no rule promulgated pursuant to this chapter shall affect a special purpose financial captive (SPFC) insurance securitization, as defined and authorized by part 4 of this chapter, in effect at the time of the promulgation. All such rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
  The regulation of captive insurance companies as authorized by this chapter is subject to audit by the comptroller of the treasury as otherwise provided by state law. Information submitted to the department by captive insurance companies subject to this chapter shall, without written request, be open to inspection by, or disclosure to, the comptroller of the treasury or the comptroller's designated representative for purposes of audit.   The commissioner shall annually report to  the commerce and labor committee of the senate, and the insurance committee of the house of representatives regarding the captive insurance company program. Such report shall include, but not be limited to, the number and types of captive insurance companies authorized by the commissioner to conduct business in this state, the amount of premium tax and fee revenues generated pursuant to the program, and any recommendations for legislative action to improve the captive insurance company program.   
  Notwithstanding any other method authorized by law, a foreign or alien insurer may become a domestic captive insurance company by complying with all of the requirements of this chapter relative to the organization and licensing of a domestic captive insurance company of the same type with the approval of the commissioner. A company redomesticating to this state pursuant to this section may be organized under any lawful corporate form permitted by this chapter.   A redomestication pursuant to this section shall be authorized for insurance companies domiciled in foreign or alien jurisdictions that authorize the redomestication of insurance companies where, as a result of the actions taken by the company pursuant to this section to redomesticate to this state, shall no longer be a domestic legal entity of foreign or alien jurisdiction. A company wishing to redomesticate under this section must also provide evidence that the applicable regulatory authority of its domicile consents to the redomestication.   An insurance company wishing to redomesticate under this section shall file with the secretary of state its articles of association, charter, or other organizational document, together with appropriate amendments thereto adopted in accordance with the laws of this state and bring such articles of association, charter, or other organizational document into compliance with the laws of this state, along with an approval letter issued by the commissioner. The company may file with the secretary of state an election deferring the effective date of the redomestication. Upon filing and paying the required fees prescribed in title 48 and title 61, the secretary of state shall issue an acknowledgement letter to the applicant. The secretary of state is also authorized to promulgate rules that provide for a fee to cover the cost of a redomestication.   The company shall file a copy of the secretary of state's acknowledgement letter with the commissioner, who shall then issue a license pursuant to  56-13-103.   Upon the completion of a redomestication under this section, the captive insurance company shall be subject to the laws of this state and shall be considered domiciled in this state. The captive insurance company shall be deemed to have a formation date corresponding to its original formation date in the foreign or alien domicile.   For the purposes of the  56-13-109 examination, any examination conducted by the foreign or alien domicile that is substantially similar to an examination that would have been done in this state had the company been domiciled in this state shall be recognized for the purposes of establishing the period of time when the next examination is due.    A company redomesticating under this section shall only be liable for taxes due pursuant to  56-13-114 on premiums paid to the company after redomestication.   A company redomesticating under this section after July 1 of any year shall only be subject to one-half (12) of the minimum premium tax specified in  56-13-114(c) in its first year.   An alien company redomesticating under this section shall report all premium taxes due under  56-13-114 but may, in either its first or its second year of operations, but not both, after redomesticating into this state, elect to forego the payment of premium taxes. However, a company making such an election that surrenders its license or redomesticates to another jurisdiction within five (5) years of redomestication into this state shall immediately pay a tax in an amount equal to the foregone premium tax plus ten percent (10%) per annum from the date the foregone premium tax would have been due.     This section shall not be the exclusive means of redomesticating an insurance company to this state and shall not restrict the ability of an insurance company to undergo a merger, consolidation, transfer of assets and liabilities, or utilize any other means permitted by law to effect the transfer of operations of a foreign or alien insurance company to this state.   
  As used in this section, dormant captive insurance company means any captive insurance company other than a captive risk retention group that has:  Ceased transacting the business of insurance, including the issuance of insurance policies; and   No remaining liabilities associated with insurance business transactions or insurance policies issued prior to the filing of its application for a letter of dormancy under this section.     A captive insurance company domiciled in this state that meets the criteria of subsection (a) may apply to the commissioner for issuance of a letter of dormancy. The commissioner may issue the captive insurance company a letter of dormancy in the commissioner's sole discretion. A letter of dormancy issued by the commissioner shall specify an expiration date that is no later than five (5) years from the date of issuance. The commissioner may, before the expiration date, issue a superseding letter of dormancy. The superseding letter of dormancy shall specify a new expiration date no later than five (5) years from the date of issuance of the superseding letter.   A dormant captive insurance company that has been issued a letter of dormancy shall:  Possess, and thereafter maintain unimpaired, paid-in capital and surplus of not less than twenty five thousand dollars ($25,000);   Prior to March 15 of each year, submit to the commissioner a report of its financial condition as required by  56-13-108; and   Pay the fee established by  56-4-101(a)(4).     A dormant captive insurance company that has been issued a letter of dormancy shall not be subject to or liable for the payment of the annual minimum aggregate tax provided for in  56-13-114(c). A dormant captive insurance company shall be liable for payment of premium tax on premiums received before issuance of a letter of dormancy.   A dormant captive insurance company that has been issued a letter of dormancy must apply to the commissioner for and receive a rescission of the letter of dormancy and restore its unimpaired paid-in capital and surplus to the amount required in  56-13-105 prior to issuing any insurance policies and resuming the business of insurance.   The commissioner shall rescind a letter of dormancy issued to any captive insurance company if that company no longer meets the criteria of subsection (a). Such rescission shall be effective as of the date the company ceased to meet the criteria of subsection (a).   In the commissioner's sole discretion, an examination required by  56-13-109 may be held in abeyance during the time the dormant captive insurance company is under a letter of dormancy.   An application for a letter of dormancy and an application for a rescission of a letter of dormancy constitute a change of business plan pursuant to  56-4-101(a)(8).   The captive insurance company is responsible for all taxes, fees, and statutory requirements of this title for the year in which the rescission or expiration of its letter of dormancy occurs.   The commissioner may promulgate rules as necessary to effectuate the purposes of this section. All rules shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
  For purposes of this section:  Foreign means outside the United States, its territories, or possessions;   Foreign currency means currency issued by a government outside the United States that is recognized by the United States as a legitimate government-issued currency and freely exchangeable with United States currency; and   Foreign securities means securities that are ordinarily traded on an exchange outside the United States.     A captive insurance company or an individual cell of a captive insurance company may, with the approval of the commissioner, include within its plan of operation that the company will:  Receive payments of premium in a specified foreign currency or foreign securities and will pay claims on insured losses in a specified currency or foreign securities;   Authorize the payment of claims in a specified foreign currency or foreign securities; and   Hold foreign currency or foreign securities as surplus for the payment of future claims.     In determining the exchange rate between United States currency and the foreign currency or foreign securities, the captive insurance company shall identify in its approved plan of operation a publicly available and reliable exchange rate index. If the exchange rate index identified in the plan of operation is not available, then the commissioner must determine the appropriate exchange rate for the purpose of calculating the amount of premium tax due.   For the purpose of calculating the amount of premium tax due under  56-13-114, a policy issued by a captive insurance company payable in foreign currency or foreign securities is deemed to be of an equivalent value in United States currency as of the date that coverage is bound and is payable in United States currency when due under  56-13-114.   For captive insurance companies and protected cells that have received permission pursuant to subsection (b), all reports required to be filed pursuant to  56-13-108 must be converted to United States currency for the reporting period covered by the annual report.   
  One (1) or more sponsors may form a protected cell captive insurance company under this chapter. In addition to part 1 of this chapter, this part shall apply to protected cell captive insurance companies.   A protected cell captive insurance company shall be incorporated as a stock insurer with its capital divided into shares and held by the stockholders, as a mutual corporation, as a nonprofit corporation with one (1) or more members, or as a limited liability company.   
 As used in this part, unless the context requires otherwise:   General account means all assets and liabilities of a protected cell captive insurance company not attributable to a protected cell;   Participant means a person or an entity, authorized to be a participant by  56-13-205, and any affiliate of a participant, that is insured by a protected cell captive insurance company, if the losses of the participant are limited through a participant contract;   Participant contract means a contract by which a protected cell captive insurance company insures the risks of a participant and limits the losses of each such participant to its pro rata share of the assets of one (1) or more protected cells identified in such participant contract;   Protected cell means a separate account established by a protected cell captive insurance company formed or licensed under this chapter, in which an identified pool of assets and liabilities are segregated and insulated by means of this chapter from the remainder of the protected cell captive insurance company's assets and liabilities in accordance with the terms of one (1) or more participant contracts to fund the liability of the protected cell captive insurance company with respect to the participants as set forth in the participant contracts;   Protected cell assets means all assets, contract rights, and general intangibles identified with and attributable to a specific protected cell of a protected cell captive insurance company;   Protected cell captive insurance company means any captive insurance company:  In which the minimum capital and surplus required by this chapter are provided by one (1) or more sponsors;   That is formed or licensed under this chapter;   That insures the risks of separate participants through participant contracts; and   That funds its liability to each participant through one (1) or more protected cells and segregates the assets of each protected cell from the assets of other protected cells and from the assets of the protected cell captive insurance company's general account;     Protected cell liabilities means all liabilities and other obligations identified with and attributed to a specific protected cell of a protected cell captive insurance company; and   Sponsor means any person or entity that is approved by the commissioner to provide all or part of the capital and surplus required by this chapter and to organize and operate a protected cell captive insurance company.   
 In addition to the information required by  56-13-103(c)(1), each applicant-protected cell captive insurance company shall file with the commissioner the following:   Materials demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner, and how it will report such experience to the commissioner;   A statement acknowledging that all financial records of the applicant, including records pertaining to any protected cells, shall be made available for inspection or examination by the commissioner or the commissioner's designated agent;   All contracts or sample contracts between the applicant and any participants; and   Evidence that expenses shall be allocated to each protected cell in a fair and equitable manner.   
 A protected cell captive insurance company formed or licensed under this chapter may establish and maintain one (1) or more incorporated or unincorporated protected cells, to insure risks of one (1) or more participants, subject to the following conditions:    A protected cell captive insurance company may establish one (1) or more protected cells if the commissioner has approved in writing a plan of operation or amendments to a plan of operation submitted by the protected cell captive insurance company with respect to each protected cell. A plan of operation must include, but is not limited to, the specific business objectives and investment guidelines of the protected cell. However, the commissioner may require additional information in the plan of operation. The commissioner may make the approval of a plan of operation or amendments to a plan of operation effective as of any date on or before the date the approval is signed as long as the effective date is no earlier than the date on which the plan of operation or amendments to the plan of operation were filed with the department;   Upon the commissioner's written approval of the plan of operation, the protected cell captive insurance company, in accordance with the approved plan of operation, may attribute insurance obligations with respect to its insurance business to the protected cell;   A protected cell shall have its own distinct name or designation that shall include the words protected cell or incorporated cell; provided, an incorporated cell formed as a series of a limited liability company, if formed after July 1, 2015, shall bear a distinct name or designation as reflected in its formation documents and shall include the words series cell;   The protected cell captive insurance company shall transfer all assets attributable to a protected cell to one (1) or more separately established and identified protected cell accounts bearing the name or designation of that protected cell. Protected cell assets must be held in the protected cell accounts for the purpose of satisfying the obligations of that protected cell;   An incorporated protected cell may be organized and operated in any form of business organization authorized by the commissioner, including, but not limited to, an individual series of a limited liability company as provided for in title 48, chapter 249. Each incorporated protected cell of a protected cell captive insurer must be treated as a captive insurer for purposes of this chapter and has the power to enter into contracts, including an individual series of a limited liability company. Unless otherwise permitted by the organizational documents of a protected cell captive insurer, each incorporated protected cell of the protected cell captive insurer must have the same directors, secretary, and registered office as the protected cell captive insurer;   All attributions of assets and liabilities between a protected cell and the general account shall be in accordance with the plan of operation and participant contracts approved by the commissioner. No other attribution of assets or liabilities shall be made by a protected cell captive insurance company between the protected cell captive insurance company's general account and its protected cells. Any attribution of assets and liabilities between the general account and a protected cell shall be in cash or in readily marketable securities with established market values;     The creation of a protected cell does not create, with respect to that protected cell, a legal person separate from the protected cell captive insurance company unless the protected cell is an incorporated cell. Amounts attributed to a protected cell under this part, including assets transferred to a protected cell account, are owned by the protected cell. No protected cell captive insurance company shall be, or hold itself out to be, a trustee with respect to those protected cell assets of that protected cell account. Notwithstanding this subdivision (2), the protected cell captive insurance company may allow for a security interest to attach to protected cell assets or a protected cell account when in favor of a creditor of the protected cell and otherwise allowed under applicable law;   This chapter shall not be construed to prohibit the protected cell captive insurance company from contracting with or arranging for an investment advisor, commodity trading advisor, or other third party to manage the protected cell assets of a protected cell, if all remuneration, expenses, and other compensation of the third party advisor or manager are payable from the protected cell assets of that protected cell and not from the protected cell assets of other protected cells or the assets of the protected cell captive insurance company's general account;    A protected cell captive insurance company shall establish administrative and accounting procedures necessary to properly identify the one (1) or more protected cells of the protected cell captive insurance company and the protected cell assets and protected cell liabilities attributable to the protected cells. The directors of a protected cell captive insurance company shall keep protected cell assets and protected cell liabilities:   Separate and separately identifiable from the assets and liabilities of the protected cell captive insurance company's general account; and   Attributable to one (1) protected cell separate and separately identifiable from protected cell assets and protected cell liabilities attributable to other protected cells;     If subdivision (4)(A) is violated, then the remedy of tracing is applicable to protected cell assets when commingled with protected cell assets of other protected cells or the assets of the protected cell captive insurance company's general account. The remedy of tracing shall not be construed as an exclusive remedy;     When establishing a protected cell, the protected cell captive insurance company shall attribute to the protected cell assets a value at least equal to the reserves and other insurance liabilities attributed to that protected cell;   Each protected cell shall be accounted for separately on the books and records of the protected cell captive insurance company to reflect the financial condition and results of operations of such protected cell, net income or loss, dividends or other distributions to participants, and such other factors as may be provided in the participant contract or required by the commissioner;   No asset of a protected cell shall be chargeable with liabilities arising out of any other insurance business the protected cell captive insurance company may conduct;   No sale, exchange, or other transfer of assets shall be made by such protected cell captive insurance company between or among any of its protected cells without the consent of such protected cells;   No sale, exchange, transfer of assets, dividend, or distribution shall be made from a protected cell to a protected cell captive insurance company or participant without the commissioner's approval. In no event shall the commissioner's approval be given if the sale, exchange, transfer, dividend or distribution would result in the insolvency or impairment of a protected cell;   All attributions of assets and liabilities to the protected cells and the general account shall be in accordance with the plan of operation approved by the commissioner. No other attribution of assets or liabilities shall be made by a protected cell captive insurance company between its general account and any protected cell or between any protected cells. The protected cell captive insurance company shall attribute all insurance obligations, assets, and liabilities relating to a reinsurance contract entered into with respect to a protected cell to such protected cell. The performance under such reinsurance contract and any tax benefits, losses, refunds, or credits allocated pursuant to a tax allocation agreement to which the protected cell captive insurance company is a party, including any payments made by or due to be made to the protected cell captive insurance company pursuant to the terms of such agreement, shall reflect the insurance obligations, assets, and liabilities relating to the reinsurance contract that are attributed to such protected cell;   In connection with the conservation, rehabilitation, or liquidation of a protected cell captive insurance company, the assets and liabilities of a protected cell shall, to the extent the commissioner determines they are separable, at all times be kept separate from, and shall not be commingled with, those of other protected cells and the protected cell captive insurance company;   Each protected cell captive insurance company shall annually file with the commissioner such financial reports as required by the commissioner. Any such financial report shall include, without limitation, accounting statements detailing the financial experience of each protected cell;   Each protected cell captive insurance company shall notify the commissioner in writing within ten (10) business days of any protected cell that is insolvent or otherwise unable to meet its claim or expense obligations;   No participant contract shall take effect without the commissioner's prior written approval. The addition of each new protected cell, the withdrawal of any participant, or the termination of any existing protected cell shall constitute a change in the plan of operation requiring the commissioner's prior written approval;   The business written by a protected cell captive insurance company, with respect to each protected cell, shall be:  Fronted by an insurance company licensed under the laws of any state;   Reinsured by a reinsurer authorized or approved by this state; or   Secured by a trust fund in the United States for the benefit of policyholders and claimants or funded by an irrevocable letter of credit or other arrangement that is acceptable to the commissioner. The amount of security provided shall be no less than the reserves associated with those liabilities which are neither fronted nor reinsured, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses and unearned premiums for business written through the participant's protected cell. The commissioner may require the protected cell captive insurance company to increase the funding of any security arrangement established under this subdivision (15). If the form of security is a letter of credit, the letter of credit shall be issued or confirmed by a bank approved by the commissioner. A trust maintained pursuant to this subdivision (15) shall be established in a form and upon such terms approved by the commissioner;     Notwithstanding this title or other laws of this state, and in addition to  56-13-207, in the event of an insolvency of a protected cell captive insurance company where the commissioner determines that one (1) or more protected cells remain solvent, the commissioner may separate such cells from the protected cell captive insurance company and may allow, on application of the protected cell captive insurance company, for the conversion of such protected cells into one (1) or more new or existing protected cell captive insurance companies, or one (1) or more other captive insurance companies, pursuant to such plan of operation as the commissioner deems acceptable;   Biographical affidavits are not required for participants in unincorporated cells. However, biographical affidavits are required for owners of incorporated cells, including series members of a series LLC; and   A protected cell captive insurance company formed or licensed under this chapter may establish and operate both unincorporated and incorporated protected cells.   
  Associations, corporations, limited liability companies, partnerships, trusts, and other business entities may be participants in any protected cell captive insurance company formed or licensed under this chapter.   A sponsor may be a participant in a protected cell captive insurance company.   A participant need not be a shareholder of the protected cell captive insurance company or any affiliate thereof.   A participant shall insure only its own risks through a protected cell captive insurance company, unless otherwise approved by the commissioner.   
 Notwithstanding  56-13-204, the assets of two (2) or more protected cells may be combined for purposes of investment, and such combination shall not be construed as defeating the segregation of such assets for accounting or other purposes. Notwithstanding any other provision of this title, the commissioner may approve the use of alternative reliable methods of valuation and rating.  
  Except as otherwise provided in this section, chapter 9 of this title shall apply to a protected cell captive insurance company.   Upon any order of supervision, rehabilitation, or liquidation of a protected cell captive insurance company, the receiver shall manage the assets and liabilities of the protected cell captive insurance company pursuant to this part.   Notwithstanding chapter 9 of this title:  No assets of a protected cell shall be used to pay any expenses or claims other than those attributable to such protected cell; and   A protected cell captive insurance company's capital and surplus shall at all times be available to pay any expenses of or claims against the protected cell captive insurance company.     
  The pleadings in any legal action brought by or against a protected cell captive insurance company shall specify which protected cell or cells are or should be named a party to the suit. If the general account is party to this suit, it likewise shall be separately identified in the pleadings as if it were a protected cell.   A legal action brought against a protected cell captive insurance company that does not specify one (1) or more protected cells shall be deemed to have been brought against the general account only.   Any protected cell that is not named in the pleadings of the legal action shall not be deemed to be a party to the legal action. Any protected cell that is erroneously named as a party or named without proper cause shall be entitled to prompt dismissal from the legal action.   Unless specified by the plan of operation, participant contract, or other prior contractual agreement, the assets of one (1) protected cell may not be encumbered or seized to satisfy the obligations of or a judgment against any other protected cell. No protected cell has a duty to defend the rights and obligations of any other protected cell.   In any legal action involving a protected cell captive insurance company or a protected cell, any papers, documents, or property of a nonparty protected cell shall be afforded the same status during discovery as the documents or property of any other unrelated third party. A nonparty protected cell shall have standing to appear and petition for any appropriate relief to protect the confidentiality of its papers or documents.   
   Upon the application of a protected cell captive insurance company, one of its protected cells may be converted to any form of captive insurance company authorized pursuant to this chapter with the consent of the commissioner. Upon compliance with part 1 of this chapter, the commissioner may issue to the converting protected cell a certificate of authority with an effective date of its original date of formation as a protected cell.   If the converting protected cell is a series of a limited liability company, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable. The organizational documents shall include the date of formation as a series. Upon conversion, the formation date of the series shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor series.   If the converting protected cell is any other type of incorporated protected cell entity, then the converting protected cell shall submit amended organizational documents to the secretary of state that comply with part 1 of this chapter and titles 48 and 61 as applicable.   If the converting protected cell is neither a series of a limited liability company nor an incorporated protected cell, the cell shall file organizational documents with the secretary of state that comply with part 1 of this chapter, titles 48 and 61 as applicable, or any other applicable provision governing formation of that type of entity. The organizational documents shall include the date of formation as a cell. Upon conversion, the formation date of the cell shall be deemed the formation date of the new entity. The new entity shall possess all assets and liabilities, including outstanding insurance liabilities, owned by the predecessor cell.     A captive insurance company may apply to the commissioner for conversion to become a protected cell captive insurance company under any form permitted under this part. Upon compliance with this part, approval by the commissioner, and the filing of amended organizational documents with the secretary of state, the captive insurance company shall be issued a revised certificate of authority. The effective date of the revised protected cell captive insurance company's certificate of authority shall remain the same as the effective date of the prior captive insurance company.   With the consent of both the affected protected cell captive insurance companies and the commissioner, an individual protected cell of a captive insurance company may disaffiliate from one protected cell captive insurance company and affiliate with another protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cell to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that affiliates with another protected cell captive insurance company shall be the date of its original formation with the prior protected cell captive insurance company. A protected cell shall maintain and carry over all assets and liabilities, including outstanding insurance liabilities, to the new protected cell captive insurance company.   With the consent of the affected protected cell captive insurance company or companies, the owners or the participants of the protected cells, and the commissioner, an individual protected cell of a captive insurance company may merge or otherwise combine assets and liabilities with another individual protected cell of a protected cell captive insurance company. The commissioner may require the affected protected cell captive insurance companies and the individual protected cells to make necessary changes to their business plans, organizational documents, participation agreements, or other governing documents prior to approving the change in affiliation. The formation date of a protected cell that merges or otherwise combines assets and liabilities with another protected cell captive insurance company is the date of the original formation of the surviving protected cell. The surviving protected cell must acquire all of the assets and liabilities, including outstanding insurance liabilities, of the merging protected cell. A hearing is not required for mergers of protected cells effectuated under this section.   Solely for the purposes of  56-13-108, 56-13-109, and 56-13-114, the date of final conversion or disaffiliation of a protected cell shall be deemed a termination of that cell from the prior entity. The prior entity shall be responsible for the accounting, oversight, and premium tax on any transactions prior to the date of final conversion or disaffiliation. The successor entity shall be responsible for the accounting, oversight, and premium tax on any transactions on or after the date of final conversion or disaffiliation.   
  A branch captive insurance company may be established in this state, in accordance with this chapter, to write in this state any insurance or reinsurance of the employee benefit business of its parent and affiliated companies that is subject to the Employee Retirement Income Security Act of 1974, as amended, or any insurance or reinsurance permitted to be written by captive insurance companies pursuant to this chapter. In addition to any applicable provisions of this chapter, this part shall apply to branch captive insurance companies.   No branch captive insurance company shall do any insurance business in this state unless it maintains the principal place of business for its branch operations in this state.   
 As used in this part, unless the context requires otherwise:   Alien captive insurance company means any insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of an alien jurisdiction which imposes statutory or regulatory standards in a form acceptable to the commissioner on companies transacting the business of insurance in such jurisdiction;   Branch business means any insurance business transacted by a branch captive insurance company in this state;   Branch captive insurance company means any alien captive insurance company licensed by the commissioner to transact the business of insurance in this state through a business unit with a principal place of business in this state. A branch captive insurance company is a pure captive insurance company with respect to operations in this state, unless otherwise permitted by the commissioner; and   Branch operations means any business operations of a branch captive insurance company in this state.   
  No branch captive insurance company shall be issued a license by the commissioner unless it possesses and maintains, as security for the payment of liabilities attributable to the branch operations:  An amount equal to the amount set forth in  56-13-105 as the minimum capital requirement for a pure captive insurance company; and   Reserves on such insurance policies or such reinsurance contracts as may be issued or assumed by the branch captive insurance company through its branch operations, including reserves for losses, allocated loss adjustment expenses, incurred but not reported losses, and unearned premiums with regard to business written through the branch operations; provided, however, that, the commissioner may permit a branch captive insurance company to credit against any such reserve requirement any security for loss reserves that the branch captive insurance company may post with a ceding insurer or that may be posted by a reinsurer with the branch captive insurance company, and in either case if such security remains posted.     Subject to the prior approval of the commissioner, the amounts required in subsection (a) may be held in the form of:  A trust formed under a trust agreement and funded by assets acceptable to the commissioner;   An irrevocable letter of credit issued or confirmed by a bank approved by the commissioner;   With respect to the amounts required in subdivision (a)(1) only, cash on deposit with the commissioner; or   Any combination of subdivisions (b)(1)-(3).     
 In the case of a captive insurance company seeking to become licensed as a branch captive insurance company, the alien captive insurance company shall petition the commissioner to issue a certificate setting forth the commissioner's finding that, after considering the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors of the alien captive insurance company, the licensing and maintenance of the branch operations will promote the general good of this state. The alien captive insurance company in this state after the commissioner's certificate of authority is issued shall also comply with titles 48 and 61.  
 Prior to March 1 of each year, or with the approval of the commissioner within sixty (60) days after its fiscal year-end, a branch captive insurance company shall file with the commissioner a copy of all reports and statements required to be filed under the laws of the jurisdiction in which the alien captive insurance company is formed, verified by oath of two (2) of its executive officers. If the commissioner is satisfied that the annual report filed by the alien captive insurance company in its domiciliary jurisdiction provides adequate information concerning the financial condition of the alien captive insurance company, the commissioner may waive the requirement for completion of the captive annual statement for business written in the alien jurisdiction.  
  The examination of a branch captive insurance company pursuant to  56-13-109 shall be of branch business and branch operations only, if the branch captive insurance company provides annually to the commissioner a certificate of compliance, or its equivalent, issued by or filed with the licensing authority of the jurisdiction in which the branch captive insurance company is formed, and demonstrates to the commissioner's satisfaction that it is operating in sound financial condition in accordance with all applicable laws and regulations of such jurisdiction.   As a condition of licensure, an alien captive insurance company shall grant authority to the commissioner for examination of the affairs of the alien captive insurance company in the jurisdiction in which the alien captive insurance company is formed.   
 In the case of a branch captive insurance company, the tax provided for in  56-13-114 shall apply only to the branch business of such company.  
 This part provides for the creation of special purpose financial captives (SPFCs) exclusively to facilitate the securitization of one (1) or more risks, as a means of accessing alternative sources of capital and achieving the benefits of securitization. SPFCs are created for the limited purpose of entering into SPFC contracts and insurance securitization transactions and into related agreements to facilitate the accomplishment and execution of those transactions. The creation of SPFCs is intended to achieve greater efficiencies in structuring and executing insurance securitizations, to diversify and broaden sources of capital for insurers, to facilitate access for many insurers to insurance securitization and capital markets financing technology, and to further the economic development and expand the interest of this state through its captive insurance program.  
 For purposes of this part:   Affiliated company means a company in the same corporate system as a parent, by virtue of common ownership, control, operation, or management;   Control, controlling, controlled by, and under common control with mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise; provided, that such power is not the result of an official position with or corporate office held by the person. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent (10%) or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist. Notwithstanding this subdivision (2), for purposes of this part, the fact that an SPFC exclusively provides reinsurance to a ceding insurer under an SPFC contract is not by itself sufficient grounds for a finding that the SPFC and ceding insurer are under common control;   Counterparty means an SPFC's parent or affiliated company, a ceding insurer to the SPFC contract, or subject to the prior approval of the commissioner, a non-affiliated company;   Fair value means:  As to cash, the amount of the cash; and   As to an asset other than cash:   The quoted mid-market price for the asset in active markets shall be used if available; or   If the quoted mid-market price is not available:        A value determined using the best information available considering values of similar assets and other valuation methods, such as present value of future cash flows, historical value of the same or similar assets, or comparison to values of other asset classes, the value of which have been historically related to the subject asset; or   The amount at which that asset could be bought or sold in a current transaction between arms-length, willing parties;    Insolvency or insolvent means that the SPFC or one (1) or more of its protected cells is unable to pay its obligations when they are due, unless those obligations are the subject of a bona fide dispute, or the commissioner previously has established by order other criteria for determining the solvency of the SPFC or one (1) or more of its protected cells, in which case the SPFC is insolvent if it fails to meet that criteria;   Insurance securitization and securitization mean a transaction or a group of related transactions, which:   Include capital market offerings, that are effected through related risk transfer instruments and facilitating administrative agreements where all or part of the result of such transactions is used to fund the SPFC's obligations under a reinsurance contract with a ceding insurer and by which:   Proceeds are obtained by a special purpose financial captive insurance company, directly or indirectly, through the issuance of securities by the SPFC or any other person; or   A person provides one (1) or more letters of credit or other assets for the benefit of the SPFC; that the commissioner authorizes the SPFC to treat such letters of credit or other assets as admitted assets for purposes of the SPFC's annual report; and all or any part of such proceeds, letters of credit, or assets, as applicable, are used to fund the SPFC's obligations under a reinsurance contract with a ceding insurer; and   Do not include the issuance of a letter of credit for the benefit of the commissioner to satisfy all or part of the SPFC's capital and surplus requirements under  56-13-406;   Management means the board of directors, managing board, or other individual or individuals vested with overall responsibility for the management of the affairs of the SPFC, including the election and appointment of officers or other of those agents to act on behalf of the SPFC;   Organizational document means the SPFC's articles of incorporation, articles of charter, articles of organization, bylaws, operating agreement, or other formation documents as required by the secretary of state that establish the SPFC as a legal entity or prescribes its existence;   Parent means any corporation, limited liability company, partnership, or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent (50%) of the outstanding voting securities of an SPFC;   Protected cell means a separate account established and maintained by an SPFC for one (1) SPFC contract and the accompanying insurance securitization with a counterparty;   Securities means those different types of debt obligations, equity, surplus certificates, surplus notes, funding agreements, derivatives, and other legal forms of financial instruments;   SPFC or special purpose financial captive means a captive insurance company that has received a certificate of authority from the commissioner for the limited purposes provided for in this part;   SPFC contract means a contract between the SPFC and the counterparty pursuant to which the SPFC agrees to provide insurance or reinsurance protection to the counterparty for risks associated with the counterparty's insurance or reinsurance business;   SPFC securities means the securities issued by a SPFC; and   Surplus note means an unsecured subordinated debt obligation deemed to be a surplus certificate under this title and otherwise possessing characteristics consistent with paragraph 3 of the Statement of Statutory Accounting Principles No. 41, as amended, National Association of Insurance Commissioners (NAIC).  
  No provisions of this title, other than those expressly provided in this part, shall apply to an SPFC, and those provisions apply only as modified by this part. If a conflict occurs between this title and this part, this part shall control.   The commissioner, by rule, regulation, or order, may exempt an SPFC or its protected cells, on a case-by-case basis, from this chapter if the commissioner determines regulation under this chapter to be inappropriate given the nature of the risks to be insured.   
  An SPFC, when permitted by its organizational documents, may apply to the commissioner for a certificate of authority to transact insurance or reinsurance business as authorized by this part. An SPFC shall only insure or reinsure the risks of its counterparty. Notwithstanding any other provision of this part, an SPFC may purchase reinsurance to cede the risks assumed under the SPFC contract as approved by the commissioner.   To transact business in this state, an SPFC shall:  Comply with the procedure established in  56-13-103(c)(1);   Obtain from the commissioner a certificate of authority authorizing it to conduct insurance or reinsurance business, or both, in this state;   Hold at least one (1) management meeting each year in this state;   Maintain its principal place of business in this state;   Appoint a resident registered agent to accept service of process and to otherwise act on its behalf in this state. If the registered agent, with reasonable diligence, is not found at the registered office of the SPFC, the commissioner shall be an agent of the SPFC upon whom any process, notice, or demand may be served;   Provide such documentation of the insurance securitization as requested by the commissioner immediately upon closing of the transaction, including:  An opinion of legal counsel with respect to compliance with this part and any other applicable laws as of the effective date of the transaction; and   A statement under oath of its president and secretary demonstrating its financial condition; and     Provide a complete set of the documentation of the insurance securitization to the commissioner immediately following closing of the transaction.     A complete SPFC application shall include the following:  A certified copy of the SPFC's organizational documents; and   Evidence of:  The amount and liquidity of its assets relative to the risks to be assumed;   The adequacy of the expertise, experience, and character of the person or persons who manage the SPFC;   The overall soundness of the SPFC's plan of operation;   Other factors considered relevant by the commissioner in ascertaining whether the proposed SPFC is able to meet its policy obligations; and   The applicant SPFC's financial condition, including the source and form of the minimum capitalization to be contributed to the SPFC;     A plan of operation, consisting of a description of or statement of intent with respect to the contemplated insurance securitization, the SPFC contract, and related transactions, which shall include:  Draft documentation or, at the discretion of the commissioner, a written summary of all material agreements that are entered into to effectuate the SPFC contract and, before the effectuation of the SPFC contract, the insurance securitization, to include the names of the counterparty, the nature of the risks being assumed, the proposed use of protected cells, if any, and the maximum amounts, purpose, and nature and the interrelationships of the various transactions required to effectuate the insurance securitization;   The source and form of additional capitalization to be contributed to the SPFC;   The proposed investment strategy of the SPFC;   A description of the underwriting, reporting, and claims payment methods by which losses covered by the SPFC contract are reported, accounted for, and settled; and   A pro forma balance sheet and income statement illustrating various stress case scenarios for the performance of the SPFC under the SPFC contract;     Biographical affidavits in NAIC format of all of the prospective SPFC's officers and directors, providing the officers' and directors' legal names, any names under which they have or are conducting their affairs, and any other biographical information as the commissioner may request;   An affidavit from the applicant SPFC verifying:  The applicant SPFC complies with this part;   The applicant SPFC operates only pursuant to this part;   The applicant SPFC's investment strategy reflects and takes into account the liquidity of assets and the reasonable preservation, administration, and asset management of such assets relative to the risks associated with the SPFC contract and the insurance securitization transaction;   The securities proposed to be issued, if any, are valid legal obligations that are either properly registered with the commissioner or constitute an exempt security or form part of an exempt transaction; and     Any other statements or documents required by the commissioner to evaluate and complete the licensing of the SPFC.     In addition to the information required by subsection (c) and  56-13-408, if a protected cell is used, then an applicant SPFC shall file with the commissioner:  A business plan demonstrating how the applicant SPFC accounts for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the commissioner, and how the applicant will report the experience to the commissioner;   A statement acknowledging that all financial records of the SPFC, including records pertaining to any protected cells, must be made available for inspection or examination by the commissioner;   All contracts or sample contracts between the SPFC and any counterparty, related to each protected cell; and   A description of the expenses allocated to each protected cell.     Information submitted pursuant to this section shall be and remain confidential, and shall not be made public by the commissioner without the written consent of the company, except that:  Such information may be discoverable by a party in a civil action or contested case to which the captive insurance company that submitted such information is a party, upon a showing by the party seeking to discover such information that:  The information sought is relevant to and necessary for the furtherance of such action or case;   The information sought is unavailable from other non-confidential sources; and   A subpoena issued by a judicial or administrative officer of competent jurisdiction has been submitted to the commissioner; and     The commissioner shall have the discretion to disclose such information to a public officer having jurisdiction over the regulation of insurance in another state; provided, that:  Such public official shall agree in writing to maintain the confidentiality of such information; and   The laws of the state in which such public official serves require such information to be and to remain confidential.       Section 56-13-109 applies to examinations, investigations, and processing conducted pursuant this part.   SPFCs are subject to any rules or regulations promulgated pursuant to  56-13-121, unless specifically exempted from such rule.   An SPFC shall make payments to the commissioner in accordance with the fee schedule established in chapter 4, part 1 of this title. The commissioner may retain legal, financial, and examination services from outside the department to examine and investigate the application, the reasonable cost of which may be charged against the applicant. The commissioner also may use internal resources to examine and investigate the application based upon an hourly rate for the services performed or the usual and customary fee charged by the financial services industry for similar work subject to a minimum fee of twelve thousand dollars ($12,000), six thousand dollars ($6,000) of which is payable upon filing of the application, and the remainder upon licensure.   An SPFC shall be subject to payment of premium taxes as required by  56-13-114.   The commissioner may grant a certificate of authority authorizing the SPFC to transact insurance or reinsurance business as an SPFC in this state, upon a finding by the commissioner that:  The SPFC's proposed plan of operation provides a reasonable and expected successful operation;   The terms of the SPFC contract and related transactions comply with this part;   The proposed plan of operation is not hazardous to any counterparty;   To the extent required by law or regulation, the commissioner or an equivalent regulatory authority of the state of domicile of each counterparty has notified the commissioner in writing or otherwise provided assurance satisfactory to the commissioner that it has approved or not disapproved the transaction; and   The certificate of authority authorizing the SPFC to transact business is limited only to the insurance or reinsurance activities that the SPFC is authorized to conduct pursuant to this part.     In evaluating the expectation of a successful operation, the commissioner shall consider, among other factors, whether the proposed SPFC and its management are of known good character and reasonably believed not to be affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations, with a person known to have been involved in the improper manipulation of assets, accounts, or reinsurance.   To ensure the proposed plan of operation is not hazardous to any counterparty, the commissioner may require reasonable safeguards in the SPFC's plan of operation where applicable and appropriate in the circumstance, including, without limitation, that certain assets of the SPFC be held in a trust to secure the obligations of the SPFC to a counterparty under an SPFC contract.   A foreign or alien corporation or limited liability company, upon approval of the commissioner, may become a domestic SPFC after complying with  56-13-103(c)(1)(A). After such documents are successfully filed, the foreign or alien corporation or limited liability company is entitled to the necessary or appropriate certificates or licenses to transact business as an SPFC in this state and is subject to the authority and jurisdiction of this state. In connection with this redomestication, the commissioner may waive any requirements for public hearings. It is not necessary for a corporation or limited liability company redomesticating into this state to merge, consolidate, transfer assets, or otherwise engage in another reorganization, other than as specified in this section.   
  An SPFC may be established as a stock corporation, limited liability company, mutual, partnership, or other form of organization approved by the commissioner.   The SPFC's organizational documents shall limit the SPFC's authority to transact the business of insurance or reinsurance to those activities the SPFC conducts to accomplish its purpose as expressed in this part.   The SPFC shall not adopt a name that is the same as, deceptively similar to, or likely to be confused with or mistaken for another existing business name registered in this state. Any name adopted by an SPFC shall comply with titles 48 and 61.   An SPFC shall have at least three (3) incorporators or organizers, of whom at least two (2) shall be residents of this state.   At least one (1) of the members of the management of the SPFC shall be a resident of this state.   An SPFC formed pursuant to this part has the privileges of and is subject to all other requirements of this state's law applicable to its formation, as well as the applicable provisions contained in this part; provided, that this part controls if a conflict exists in this state's law.   
  An SPFC shall initially possess and maintain, minimum capitalization of not less than two hundred and fifty thousand dollars ($250,000). All of the minimum initial capitalization shall be in cash. All other funds of the SPFC in excess of its minimum initial capitalization shall be in the form of cash, cash equivalent, or securities invested as approved by the commissioner.   Additional capitalization for the SPFC shall be determined, if so required, by the commissioner after giving due consideration to the SPFC's plan of operation, feasibility study, pro-formas, and the nature of the risks being insured or reinsured, which may be prescribed in formulas approved by the commissioner.   
  An SPFC shall only insure the risks of a counterparty.   No SPFC shall issue a contract for assumption of risk or indemnification of loss other than an SPFC contract. However, the SPFC may cede risks assumed through an SPFC contract to third party reinsurers through the purchase of reinsurance or retrocession protection on terms approved by the commissioner.   An SPFC may enter into contracts and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of the SPFC contract, insurance securitization, and this part. Those activities may include, but are not limited to:  Entering into SPFC contracts;   Issuing SPFC securities in accordance with applicable securities law;   Complying with the terms of such contracts or securities;   Entering into trust, guaranteed investment contract, letter of credit, swap, tax, administration, reimbursement, or fiscal agent transactions; and   Complying with trust indenture, reinsurance, or retrocession; and agreements necessary or incidental to effectuate an insurance securitization in compliance with this part or the plan of operation approved by the commissioner.      An SPFC shall discount its reserves at discount rates as approved by the commissioner.   An SPFC shall maintain reserves that are actuarially sufficient to support the liabilities incurred by SPFC in reinsuring life insurance policies.   An SPFC shall file annually with the commissioner an actuarial opinion on reserves provided by an approved independent actuary.     
  This section and  56-13-409 provide a basis for the creation and use of protected cells by an SPFC as a means of accessing alternative sources of capital, lowering formation and administrative expenses, and generally making insurance securitizations more efficient. If a conflict exists between this chapter and either this section or  56-13-409, either this section or  56-13-409 shall control, as applicable.   An SPFC may establish and maintain one (1) or more protected cells with prior written approval of the commissioner and subject to compliance with the applicable provisions of this part and the following conditions:  A protected cell shall be established only for the purpose of insuring or reinsuring risks of one (1) or more SPFC contracts with a counterparty with the intent of facilitating an insurance securitization;   Each protected cell shall be accounted for separately on the books and records of the SPFC to reflect the financial condition and results of operations of the protected cell, net income or loss, dividends, or other distributions to the counterparty for the SPFC contract with each cell, and other factors as may be provided in the SPFC contract, insurance securitization transaction documents, plan of operation, or business plan, or as required by the commissioner;   Amounts attributed to a protected cell under this part, including assets transferred to a protected cell account, are owned by the SPFC, and no SPFC shall be, or hold itself out to be, a trustee with respect to those protected cell assets of that protected cell account;   All attributions of assets and liabilities between a protected cell and the general account shall be in accordance with the plan of operation approved by the commissioner. No other attribution of assets or liabilities shall be made by an SPFC between the SPFC's general account and its protected cell or cells. The SPFC shall attribute all insurance obligations, assets, and liabilities relating to an SPFC contract and the related insurance securitization transaction, including any securities issued by the SPFC as part of the insurance securitization, to a particular protected cell. The rights, benefits, obligations, and liabilities of any securities attributable to that protected cell and the performance under an SPFC contract and the related securitization transaction and any tax benefits, losses, refunds, or credits allocated, or any of them, at any point in time pursuant to a tax allocation agreement between the SPFC and the SPFC's counterparty, parent, or company or group company, or any of them, in common control with them, as the case may be, including any payments made by or due to be made to the SPFC pursuant to the terms of the agreement, shall reflect the insurance obligations, assets, and liabilities relating to the SPFC contract and the insurance securitization transaction that are attributed to a particular protected cell;   No assets of a protected cell shall be chargeable with liabilities arising out of an SPFC contract related to or associated with another protected cell. However, one (1) or more SPFC contracts may be attributed to a protected cell only if the SPFC contracts are intended to be, and ultimately are, part of a single securitization transaction;   No sale, exchange, or other transfer of assets shall be made by the SPFC between, or among, any of the SPFC's protected cells without the consent of the commissioner, counterparty, and each protected cell;   Except as otherwise contemplated in the SPFC contract or related insurance securitization transaction documents, or both no sale, exchange, transfer of assets, dividend, or distribution shall be made from a protected cell to a counterparty or parent without the commissioner's approval and the sale, exchange, transfer, dividend, or distribution shall not be approved if the sale, exchange, transfer, dividend, or distribution would result in a protected cell's insolvency or impairment; and   An SPFC may pay interest or repay principal, or both, and make distributions or repayments with respect to any securities attributed to a particular protected cell from assets or cash flows relating to, or emerging from, the SPFC contract and the insurance securitization transactions that are attributable to that particular protected cell in accordance with this part or as otherwise approved by the commissioner.     No SPFC contract with, or attributable to, a protected cell shall take effect without the commissioner's prior written approval, and the addition of each new protected cell constitutes a change in the business plan requiring the commissioner's prior written approval. The commissioner may retain legal, financial, and examination services from outside the department to examine and investigate the application for a protected cell, the reasonable cost of which may be charged against the applicant, or the commissioner may use internal resources to examine and investigate the application, the reasonable cost of which may be charged against the applicant, or both.   An SPFC utilizing protected cells shall possess and maintain minimum capitalization separate and apart from the capitalization of its protected cell or cells in an amount determined by the commissioner after giving due consideration of the SPFC's business plan, feasibility study, and pro-formas, including the nature of the risks to be insured or reinsured. For purposes of determining the capitalization of each protected cell, an SPFC shall initially capitalize and maintain capitalization in each protected cell in the amount and manner required for an SPFC in  56-13-406.   The establishment of one (1) or more protected cells alone shall not constitute, and shall not be deemed to be, a fraudulent conveyance, an intent by the SPFC to defraud creditors, or the carrying out of business by the SPFC for any other fraudulent purpose.   
   The creation of a protected cell shall not create, with respect to that protected cell, a legal person separate from the SPFC.   Notwithstanding subdivision (a)(1), a protected cell shall have its own distinct name or designation that includes the words protected cell. The SPFC shall transfer all assets attributable to the protected cell to one (1) or more separately established and identified protected cell accounts bearing the name or designation of that protected cell.   Although a protected cell is not a separate legal person, the property of an SPFC in a protected cell is subject to orders of a court by name as the property would have been if the protected cell were a separate legal person.   The property of an SPFC in a protected cell shall be served in its own name with process in all civil actions or proceedings involving or relating to the activities of that protected cell or a breach by the SPFC of a duty to the protected cell or to a counterparty to a transaction linked or attributed to it by serving the SPFC.   A protected cell exists only at the pleasure of the SPFC. At the cessation of business of a protected cell in accordance with the plan approved by the commissioner, the SPFC shall close out the protected cell account.     Nothing in this section shall be construed to prohibit an SPFC from contracting with, or arranging for, an investment advisor, commodity trading advisor, or other third party to manage the assets of a protected cell, if all remuneration, expenses, and other compensation of the third party advisor or manager are payable from the assets of that protected cell and not from the assets of other protected cells or the assets of the SPFC's general account, unless approved by the commissioner.   Creditors with respect to a protected cell are not entitled to have recourse against the protected cell assets of other protected cells or the assets of the SPFC's general account. If an obligation of an SPFC relates only to the general account, the obligation of the SPFC extends only to that creditor, with respect to that obligation, and the creditor is entitled to have recourse only to the assets of the SPFC's general account.   The assets of the protected cell shall not be used to pay expenses or claims other than those attributable to the protected cell. Protected cell assets are available only to the SPFC contract counterparty and other creditors of the SPFC that are creditors only with respect to that protected cell and, accordingly, are entitled, in conformity with this part, to have recourse to the protected cell assets attributable to that protected cell. The assets of the protected cell are protected from the creditors of the SPFC that are not creditors with respect to that protected cell and who, accordingly, are not entitled to have recourse to the protected cell assets attributable to that protected cell. If an obligation of an SPFC to a person or counterparty arises from an SPFC contract or related insurance securitization transaction, or is otherwise incurred, with respect to a protected cell, then the obligation shall:  Extend only to the protected cell assets attributable to that protected cell, and the person or counterparty, with respect to that obligation, is entitled to have recourse only to the protected cell assets attributable to that protected cell; and   Not extend to the protected cell assets of another protected cell or the assets of the SPFC's general account, and the person or counterparty, with respect to that obligation, is not entitled to have recourse to the protected cell assets of another protected cell or the assets of the SPFC's general account. The SPFC's capitalization held separate and apart from the capitalization of its protected cell or cells must be available at all times to pay expenses of or claims against the SPFC and may not be used to pay expenses or claims attributable to any protected cell.     Notwithstanding any other provision of law, an SPFC may allow for a security interest in accordance with applicable law to attach to protected cell assets or a protected cell account when in favor of a creditor of the protected cell or to facilitate an insurance securitization, including, without limitation, the issuance of the SPFC contract, to the extent those protected cell assets are not required at all times to support the risk, but without otherwise affecting the discharge of liabilities under the SPFC contract, or as otherwise approved by the commissioner.   An SPFC shall establish administrative and accounting procedures necessary to properly identify the one (1) or more protected cells of the SPFC and the protected cell assets and protected cell liabilities to each protected cell. An SPFC shall keep protected cell assets and protected cell liabilities:  Separate and separately identifiable from the assets and liabilities of the SPFC's general account; and   Attributable to one (1) protected cell separate and separately identifiable from protected cell assets and protected cell liabilities attributable to other protected cells.     All contracts or other documentation reflecting protected cell liabilities shall clearly indicate that only the protected cell assets are available for the satisfaction of those protected cell liabilities. In all SPFC insurance securitizations involving a protected cell, the contracts or other documentation effecting the transaction shall contain provisions identifying the protected cell to which the transaction is attributed. In addition, the contracts or other documentation shall clearly disclose that the assets of that protected cell, and only those assets, are available to pay the obligations of that protected cell. Notwithstanding this subsection (g), and subject to this part and other applicable law or regulations, the failure to include this language in the contracts or other documentation shall not be used as the sole basis by creditors, insureds or reinsureds, insurers or reinsurers, or other claimants to circumvent this section.   An SPFC with protected cells shall annually file with the department accounting statements and financial reports required by this part, which, at least, shall:  Detail the financial experience of each protected cell and the SPFC separately; and   Provide the combined financial experience of the SPFC and all protected cells.     An SPFC with protected cells shall notify the commissioner in writing within ten (10) business days of a protected cell becoming insolvent.   
  An SPFC may issue securities, including surplus notes and other forms of financial instruments, subject to and in accordance with applicable law, its approved plan of operation, and its organizational documents.   An SPFC, in connection with the issuance of securities, may enter into and perform all of its obligations under any required contracts to facilitate the issuance of these securities.   Subject to the approval of the commissioner, an SPFC may lawfully:  Account for the proceeds of surplus notes as surplus and not as debt for purposes of statutory accounting; and   Submit for prior approval of the commissioner periodic written requests for payments of interest on and repayments of principal of surplus notes. In lieu of approval of periodic written requests for authorization to make payments of interest on and repayments of principal of surplus notes and other debt obligations issued by the SPFC, the commissioner may approve a formula or plan, which shall be included in the SPFC's plan of operation as amended from time to time, for payment of interest, principal, or both with respect to such surplus notes and debt obligations.     The commissioner, without otherwise prejudicing the commissioner's authority, may approve formulas for an ongoing plan of interest payments or principal repayments, or both, to provide guidance in connection with the commissioner's ongoing reviews of requests to approve the payments on and principal repayments of the surplus notes.   The obligation to repay principal or interest, or both, on the securities issued by the SPFC must reflect the risk associated with the obligations of the SPFC to the counterparty under the SPFC contract.   
 An SPFC may enter into swap agreements, or other forms of asset management agreements, including guaranteed investment contracts, or other transactions that have the objective of leveling timing differences in funding of up-front or ongoing transaction expenses or managing asset, credit, or interest rate risk of the investments to ensure that the investments are sufficient to assure payment or repayment of the securities, and related interest or principal payments, issued pursuant to an SPFC insurance securitization transaction or the obligations of the SPFC under the SPFC contract.  
  An SPFC may reinsure only the risks of a ceding insurer, pursuant to a reinsurance contract. No SPFC shall issue a contract of insurance or a contract for assumption of risk or indemnification of loss other than such reinsurance contract.   Unless otherwise approved in advance by the commissioner, no SPFC shall assume or retain exposure to insurance or reinsurance losses for its own account that are not funded by:  Proceeds from an insurance securitization or letters of credit or other assets described in  56-13-402;   Premium and other amounts payable by the ceding insurer to the SPFC pursuant to the reinsurance contract; and   Any return on investment of the items described in subdivisions (b)(1) and (2).     The reinsurance contract shall contain all provisions reasonably required or approved by the commissioner, which requirements shall take into account the laws applicable to the ceding insurer regarding the ceding insurer taking credit for the reinsurance provided under such reinsurance contract.   An SPFC may cede risks assumed through a reinsurance contract to one (1) or more reinsurers through the purchase of reinsurance, subject to the prior approval of the commissioner.   An SPFC may enter into contracts and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of the reinsurance contract, the insurance securitization, and this part, provided such contracts and activities are included in the SPFC's plan of operation or are otherwise approved in advance by the commissioner. Such contracts and activities may include but are not limited to:  Entering into SPFC contracts;   Issuing SPFC securities in accordance with applicable securities law;   Complying with the terms of such contracts or securities;   Entering into trust, guaranteed investment contract, letter of credit, swap, tax, administration, reimbursement, or fiscal agent transactions; and   Complying with trust indenture, reinsurance, or retrocession; and other agreements necessary or incidental to effectuate an insurance securitization in compliance with this part or the plan of operation approved by the commissioner.     Unless otherwise approved in advance by the commissioner, a reinsurance contract shall not contain any provision for payment by the SPFC in discharge of its obligations under the reinsurance contract to any person other than the ceding insurer or any receiver of the ceding insurer.   An SPFC shall notify the commissioner immediately of any action by a ceding insurer or any other person to foreclose on or otherwise take possession of collateral provided by the SPFC to secure any obligation of the SPFC.   In the SPFC insurance securitization, the contracts or other relating documentation shall contain provisions identifying the SPFC.   Unless otherwise approved by the commissioner, no SPFC shall enter into an SPFC contract with a person that is not licensed or otherwise authorized to transact the business of insurance or reinsurance in at least its state or country of domicile.   No SPFC shall:  Have any direct obligation to the policyholders or reinsureds of the counterparty; or   Lend or otherwise invest, or place in custody, trust, or under management any of its assets with, or to borrow money or receive a loan from, other than by issuance of the securities pursuant to an insurance securitization, or advance from, anyone convicted of a felony, anyone who is untrustworthy or of known bad character, or anyone convicted of a criminal offense involving the conversion or misappropriation of fiduciary funds or insurance accounts, theft, deceit, fraud, misrepresentation, or corruption.     
 No securities issued by an SPFC pursuant to an insurance securitization shall be considered to be insurance or reinsurance contracts. No investor in these securities or a holder of these securities, by sole means of this investment or holding, shall be considered to be transacting the business of insurance in this state. The underwriter's placement or selling agents and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors involved in an insurance securitization pursuant to this part shall not be considered to be insurance producers or brokers or conducting business as an insurance or reinsurance company or agency, brokerage, intermediary, advisory, or consulting business only by virtue of their activities in connection with an insurance securitization.  
  The assets of an SPFC shall be preserved and administered by or on behalf of the SPFC to satisfy the liabilities and obligations of the SPFC incident to the reinsurance contract, the insurance securitization, and other related agreements.   In the insurance securitization, the security offering memorandum or other document issued to prospective investors regarding the offer and sale of a surplus note or other security shall include a disclosure that all or part of the proceeds of such insurance securitization will be used to fund the SPFC's obligations to the ceding insurer.   No SPFC shall be subject to any restriction on investments other than the following:  The commissioner may limit investments by an SPFC to those categories and amounts of authorized investments delineated in chapter 3, parts 3 or 4 of this title, as applicable and as amended from time to time;   No SPFC shall make a loan to any person other than as permitted under its plan of operation or as otherwise approved in advance by the commissioner; and   The commissioner may prohibit or limit any investment that threatens the solvency or liquidity of the SPFC unless the investment is otherwise approved in its plan of operation or in an order issued to the SPFC pursuant to  56-13-404, as either is amended from time to time.     
  No SPFC shall declare or pay dividends in any form to its owners other than in accordance with the insurance securitization transaction agreements, and in no extent shall the dividends decrease the capital of the SPFC below two hundred fifty thousand dollars ($250,000). After giving effect to the dividends, the assets of the SPFC, including assets held in trust pursuant to the terms of the insurance securitization, shall be sufficient to satisfy the commissioner that the SPFC can meet its obligations. Approval by the commissioner of an ongoing plan for the payment of dividends or other distribution by an SPFC must be conditioned upon the retention, at the time of each payment, of capital or surplus equal to or in excess of amounts specified by, or determined in accordance with formulas approved for the SPFC by the commissioner.   The dividends may be declared by the management of the SPFC if the dividends do not violate this part or jeopardize the fulfillment of the obligations of the SPFC or the trustee pursuant to the SPFC insurance securitization agreements, the SPFC contract, or any related transaction and other provisions of this part.   
  Any material change of the SPFC's plan of operation, whether or not through an SPFC protected cell, shall require prior approval of the commissioner. The following transactions do not constitute material change for purposes of this section:  If initially approved in the plan of operation, securities subsequently issued to continue the securitization activities of the SPFC either during or after expiration, redemption, or satisfaction, of all of these, of part or all of the securities issued pursuant to initial insurance securitization transactions; and   A change and substitution in a counterparty to a swap transaction for an existing insurance securitization as allowed pursuant to this part if the replacement swap counterparty carries a similar or higher rating to its predecessor with two (2) or more nationally recognized rating agencies.     No later than six (6) months after the fiscal year-end of the SPFC, the SPFC shall file with the commissioner an audit by a certified public accounting firm of the financial statements of the SPFC and the trust accounts.   An SPFC shall report using statutory accounting principles, unless the commissioner requires, approves, or accepts the use of generally accepted accounting principles or other comprehensive basis of accounting, in each case the commissioner may require, approve, or accept any appropriate or necessary modifications or adaptations. The commissioner may require the report to be supplemented by additional information.   Each SPFC shall file by March 1, a statement of operations, using either generally accepted accounting principles or, if approved, accepted or required by the commissioner, statutory accounting principles with useful or necessary modifications or adaptations for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the commissioner. The statement of operations shall include a statement of income, a balance sheet, and may include a detailed listing of invested assets, including identification of assets held in trust to secure the obligations of the SPFC under the SPFC contract. The SPFC also may include with the filing risk based capital calculations and other adjusted capital calculations to assist the commissioner with evaluating the levels of the surplus of the SPFC for the year ending on December 31st of the previous year. The statements shall be prepared on forms required by the commissioner. In addition, the commissioner may require the filing of performance assessments of the SPFC contract.   An SPFC shall maintain the SPFC's records in this state unless otherwise approved by the commissioner and shall make its records available for examination by the commissioner at any time. The SPFC shall keep its books and records in such manner that its financial condition, affairs, and operations can be ascertained and so that the commissioner may readily verify its financial statements and determine its compliance with this part.   All original books, records, documents, accounts, and vouchers shall be preserved and kept available in this state for the purpose of examination and until authority to destroy or otherwise dispose of the records is secured from the commissioner. The original records, however, may be kept and maintained outside this state if, according to a plan adopted by the management of the SPFC and approved by the commissioner, it maintains suitable copies instead of the originals. The books or records may be photographed, reproduced on film, or stored and reproduced electronically.   
 At the cessation of business of an SPFC following termination or cancellation of an SPFC contract and the redemption of any related securities issued in connection with the SPFC contract, the authority granted by the commissioner expires or, in the case of retiring and surviving protected cells, is modified, and the SPFC is no longer authorized to conduct activities unless and until a new or modified certificate of authority is issued pursuant to a new filing under this part or as agreed by the commissioner.  
  Except as otherwise provided in this section, chapter 9 of this title shall apply in full to an SPFC.   Upon any order of supervision, rehabilitation, or liquidation of an SPFC, the receiver shall manage the assets and liabilities of the SPFC pursuant to this part.   Notwithstanding chapter 9 of this title:  No asset of a protected cell shall be used to pay any expenses or claims other than those attributable to such protected cell; and   An SPFC's capital and surplus shall, at all times, be available to pay any expenses of or claims against the SPFC.     
  This chapter shall be known and may be cited as the Surplus Lines Insurance Act. This part shall apply to surplus lines transactions where the insured's home state, as defined by  56-14-102, is this state.   This chapter shall apply to surplus lines transactions where the insured's home state, as defined by  56-14-102, is this state.   
 As used in this chapter, unless the context otherwise requires:   Admitted company or authorized company means an insurance company qualified and licensed to transact business under this title;   Affiliate means, with respect to an insured, any entity that controls the insured, is controlled by the insured or is under common control with the insured;   Affiliated group means a group of entities in which each entity, with respect to an insured, controls the insured, is controlled by the insured, or is under common control with the insured;   Alien insurance company means an insurance company incorporated or formed under the laws of any country other than the United States;   Commissioner means the commissioner of commerce and insurance;   Control means:  To own, control, or have the power of an entity directly, indirectly, or acting through one or more other persons to vote twenty-five percent (25%) or more of any class of voting securities of another entity; or   To direct, by an entity, in any manner, the election of a majority of the directors or trustees of another entity;     Department means the department of commerce and insurance;    Exempt commercial purchaser means any person purchasing commercial insurance that, at the time of placement, meets the following requirements:   The person employs or retains a qualified risk manager to negotiate insurance coverage;   The person has paid aggregate nationwide commercial property and casualty insurance premiums in excess of one hundred thousand dollars ($100,000) in the immediately preceding twelve (12) months; and   The person meets at least one (1) of the following criteria:        The person possesses a net worth in excess of twenty million dollars ($20,000,000), as such amount is adjusted pursuant to subdivision (7)(B);   The person generates annual revenue in excess of fifty million dollars ($50,000,000), as such amount is adjusted pursuant to subdivision (7)(B);   The person employs more than five hundred (500) full-time or full-time equivalent employees per individual insured or is a member of an affiliated group employing more than one thousand (1,000) employees in the aggregate;   The person is a not-for-profit organization or public entity generating annual budgeted expenditures of at least thirty million dollars ($30,000,000), as such amount is adjusted pursuant to subdivision (7)(B); or   The person is a local governmental entity with a population in excess of fifty thousand (50,000) inhabitants;  Three (3) years of experience in risk financing, claims administration, loss prevention, risk and insurance analysis or purchasing commercial lines of insurance;   A designation as a Chartered Property and Casualty Underwriter issued by the American Institute for Chartered Property and Casualty Underwriter, Insurance Institute of America;   A designation as an Associate in Risk Management issued by the American Institute for Chartered Property and Casualty Underwriter, Insurance Institute of America;   A designation as a Certified Risk Manager issued by the National Alliance for Insurance Education and Research;   A designation as a RIMS Fellow issued by the Global Risk Management Institute; or   Any other designation, certification, or license determined by a state insurance commissioner or other state insurance regulatory official or entity to demonstrate minimum competency in risk management;      Beginning on the fifth occurrence of January 1 after June 10, 2011, and each fifth occurrence of January 1 thereafter, the amounts in subdivisions (7)(A)(iii)(a ), (b ), and (d ) shall be adjusted to reflect the percentage change for such five-year period in the consumer price index for all urban consumers published by the federal bureau of labor statistics;   Foreign has the same meaning as in  56-1-102;   (A)  Home state, except as provided in subdivision (9)(B), means, with respect to an insured:   The state in which an insured maintains its principal place of business or, in the case of an individual, the individual's principal residence; or   If one hundred percent (100%) of the insured risk is located out of the state referred to in subdivision (9)(A)(i), the state to which the greatest percentage of the insured's taxable premium for that insurance contract is allocated;   If more than one (1) insured from an affiliated group are named insureds on a single nonadmitted insurance contract, home state means the home state, as determined pursuant to subdivision (9)(A), of the member of the affiliated group that has the largest percentage of premium attributed to it under such insurance contract;   When determining the home state of the insured, the principal place of business is the state in which the insured maintains its headquarters and where the insured's high-level officers direct, control, and coordinate the business activities of the insured;   Insurance company has the same meaning as in  56-1-102;   Nonadmitted company or unauthorized company means an insurance company not licensed to transact business in this state under this title;   Nonadmitted insurance or surplus lines insurance means any insurance coverage permitted by  56-14-105 to be placed directly or through surplus lines agents with a nonadmitted insurer eligible pursuant to  56-14-108;   Nonadmitted insurer means, with respect to a state, an insurer not licensed to engage in the business of insurance in such state; provided, however, such term does not include a risk retention group, as defined in 15 U.S.C.  3901(a)(4);   Qualified risk manager means, with respect to a policyholder of commercial insurance, a person who meets the following requirements:   The person is an employee of, or third-party consultant retained by, the commercial policyholder;   The person provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and purchase of insurance; and   The person meets the standards set out in one (1) of the following categories:   The person has:   A bachelor's degree or higher from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management; and   Either of the following:   The person has:   At least seven (7) years of experience in risk financing, claims administration, loss prevention, risk and insurance coverage analysis, or purchasing commercial lines of insurance; and   Any one (1) of the designations set out in subdivision (15)(C)(i)(b );   The person has at least ten (10) years of experience in risk financing, claims administration, loss prevention risk and insurance coverage analysis, or purchasing commercial lines of insurance; or   The person has a graduate degree from an accredited college or university in risk management, business administration, finance, economics, or any other field determined by a state insurance commissioner or other state regulatory official or entity to demonstrate minimum competence in risk management;   State includes any state in the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa;   Surplus lines agent means an agent who is licensed under chapter 6, part 1 of this title who is granted a surplus lines license in accordance with this chapter;   Surplus lines insurer means an unauthorized company in which a nonadmitted insurance coverage is placed or may be placed under this chapter; and   Writing agent means the licensed insurance agent who accepts the application for nonadmitted insurance directly or indirectly from the prospective insured.  
  If insurance coverages of insureds, whose home state is this state, cannot be procured from admitted companies after diligent effort, except if an exempt commercial purchaser, the coverages, designated as surplus lines insurance, may be procured from unauthorized companies, subject to the following conditions:  The insurance must be eligible for surplus lines under  56-14-105;   The insurer must be an eligible surplus lines insurer under  56-14-109;   The writing agent must be a licensed surplus lines agent; and   Any other applicable provisions of this chapter must be followed.     Any surplus lines insurance of an insured, whose home state is this state, shall be deemed to be insurance procured, or continued or renewed in this state for purposes of subsection (a).   
  The commissioner may issue a surplus lines license to any agent licensed pursuant to chapter 6 of this title. Such license shall grant the agent authority to procure the kinds of insurance provided for in this chapter from unauthorized companies in this state under the conditions prescribed in this chapter.   Every license issued pursuant to this section shall be for a twenty-four month term. A license fee in the amount of one hundred and twenty dollars ($120) shall be paid to the commissioner in advance of issuance or renewal of a license. Licenses expiring on December 31, 2011, shall be extended until the next scheduled renewal of a producer's license issued under chapter 6 of this title and may be renewed biennially thereafter. New licenses issued on or after January 1, 2012, may be renewed for ensuing periods of twenty-four (24) months expiring on the last day of the producer's birth month.   Before the commissioner may issue or renew a license, the agent seeking licensure or renewal of a license shall file an application in a form that the commissioner prescribes.   Before a license is issued, the applicant shall hold a valid license from the department authorizing the applicant to write the coverages provided for in this chapter with a company licensed to transact business in this state. The commissioner may participate in the NAIC producer licensing database.   An agent licensed pursuant to this section may accept insurance provided for in this chapter from any insurance producer licensed pursuant to chapter 6 of this title and place that insurance with an eligible surplus lines insurer licensed pursuant to this chapter. The agent may compensate the insurance producer according to  56-14-115.   
  No insurance coverage shall be eligible for surplus lines insurance unless the full amount of insurance required is not procurable, after a diligent effort has been made to do so, from among the authorized companies licensed to transact and actually writing such kind and class of insurance in this state, and the amount of insurance eligible for surplus lines shall be only the amount in excess of the amount procurable from licensed insurers.   Subsection (a) shall not apply to exempt commercial purchasers if the surplus lines agent procuring or placing the policy has disclosed to the exempt commercial purchaser that such insurance may or may not be available from admitted companies that may provide greater protection with more regulatory oversight, and the exempt commercial purchaser has subsequently requested in writing that the surplus lines agent procure or place such insurance from a nonadmitted company.   Policy or contract forms shall not be eligible unless the use:  Is reasonably necessary for the principal purposes of the coverage;   Would not be contrary to the purposes of the coverage; or   Would not be contrary to the purposes of this chapter with respect to the reasonable protection of authorized companies from unwarranted competition by unauthorized companies.     The following kinds of insurance shall not be eligible for surplus lines insurance:  Primary personal automobile liability;   Surety; and   Workers' compensation, except as provided in subsection (a).     
  On a quarterly basis, the surplus lines agent shall promptly file with the commissioner on or before February 15 for the quarter ending the preceding December 31, on or before May 15 for the quarter ending the preceding March 31, on or before August 15 for the quarter ending the preceding June 30, and on or before November 15 for the quarter ending the preceding September 30, on forms and in the manner prescribed by the commissioner, a verified report of all surplus lines insurance transactions during the preceding quarter placed, procured, or effected for, or on behalf of, an insured whose home state is this state, showing:  Aggregate gross premiums written;   Aggregate return premiums;   Amount of tax remitted to this state; and   Except for insurance placed or procured on behalf of an exempt commercial purchaser, a sworn statement by the agent with regard to the coverages described in the report that, to the best of the agent's knowledge and belief, the agent could not reasonably procure such coverages from an admitted insurer.     Within thirty (30) days of placing any new or renewal surplus lines contracts or endorsements to surplus lines contracts, the surplus lines agent shall make an affidavit for every new or renewed surplus lines insurance contract placed, procured, or effected for, or on behalf of, an insured whose home state is this state in the form prescribed by the commissioner. The affidavit shall be promptly filed with the commissioner or the commissioner's designee and shall include an affirmation that the agent is, after diligent effort, unable to procure from an admitted company or admitted companies the full amount of insurance required to protect the interest of the insured for each surplus lines insurance transaction except those procured or placed for exempt commercial purchasers.   Upon placing a new or renewed surplus lines insurance coverage, the surplus lines agent shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if the policy is not then available, a certificate, cover note or other confirmation of insurance.   No surplus lines agent shall deliver the document required by subsection (c), or purport to insure or represent that insurance will be or has been granted by any unauthorized insurer, unless:  The agent has prior written authority from the insurer for the insurance;   The agent has received information from the insurer in the regular course of business that the insurance has been granted; or   An insurance policy providing the insurance actually has been issued by the insurer and delivered to the insured.     If, after the delivery of the document required by subsection (c), there is any change as to the identity of the insurers, or the proportion of the direct risk assumed by the insurer as stated in the original certificate, cover note or confirmation, or in any other material respect as to the insurance coverage evidenced by the document, the surplus lines agent shall promptly deliver to the insured a substitute certificate, cover note, confirmation or endorsement for the original document, accurately showing the current status of the coverage and the insurers responsible under the coverage. No such change shall result in a coverage or insurance contract that would be in violation of this part if originally issued on that basis.   If a policy issued by the insurer is not available upon placement of the insurance and the surplus lines agent has delivered a certificate, cover note, or confirmation upon request by the insured, the surplus lines agent shall as soon as reasonably possible procure from the insurer its policy evidencing the insurance and deliver the policy to the insured in replacement of the certificate, cover note or confirmation that was previously issued.   
  For each insured whose home state is Tennessee, every new or renewed insurance contract certificate, cover note or other confirmation of insurance procured and delivered as a surplus line insurance coverage pursuant to this chapter shall bear the name and address of the writing agent and shall have stamped, affixed, or printed upon it the following:  This insurance contract is with an insurer not licensed to transact insurance in this state and is issued and delivered as a surplus lines coverage pursuant to the Tennessee insurance statutes.    The document shall show the description and location of the subject of the insurance, coverage, conditions, and term of the insurance, the premium and rate charged and premium taxes to be collected from the insured and the name and address of the insured and insurer. If the direct risk is assumed by more than one (1) insurer, the document shall state the name and address and proportion of the entire direct risk assumed by each insurer.   
  An insurer shall not engage in the transaction of insurance unless authorized to do so pursuant to a valid license, exempted by this chapter or otherwise exempted by the insurance laws of this state.   A person who does not have a valid license as required by  56-14-104 shall not engage in the transaction of insurance or act in this state directly as an agent for a nonadmitted insurer in the procurement of insurance, or renewals of insurance.   A person who represents or aids a nonadmitted insurer in violation of this section shall be subject to the penalties set forth in  56-14-117. No insurance contract entered into in violation of this section shall preclude the insured from enforcing the insured's rights under the contract in accordance with the terms and provisions of the contract of insurance and the laws of this state, to the same degree those rights would have been enforceable had the contract been lawfully procured.   This section shall not apply to a person, properly licensed as an agent or broker in this state who, for a fee and pursuant to a written agreement, is engaged solely to offer the insured advice, counsel or opinion, or service with respect to the benefits, advantages or disadvantages promised under any proposed or in-force policy of insurance if the person does not, directly or indirectly, participate in the solicitation, negotiation, or procurement of insurance on behalf of the insured.   This section shall not apply to a person acting in material compliance with the insurance laws of this state in the placement of the types of insurance identified in subdivisions (e)(1)(5):  Surplus lines insurance as provided in  56-14-103. For the purposes of this subsection (e), a license shall be deemed to be in material compliance with the insurance laws of this state, unless the licensee committed a violation of  56-14-103 that proximately caused loss to the insured;   Transactions for which a certificate of authority to do business is not required of an insurer under the insurance laws of this state;   Reinsurance, unless the commissioner waives the requirements of this subdivision (e)(3):  The assuming insurer is authorized to engage in an insurance or reinsurance business by its domiciliary jurisdiction and is authorized to write the type of reinsurance in its domiciliary jurisdiction; and   The assuming insurer satisfies all legal requirements for such reinsurance in the state of domicile of the ceding insurer;     The property and operation of railroads or aircraft engaged in interstate or foreign commerce, wet marine, and transportation insurance; and   Transactions subsequent to issuance of a policy not covering properties risks or exposures located, or to be performed in this state at the time of issuance, and lawfully solicited, written or delivered outside this state.     
  No surplus lines agent shall place any coverage with a unauthorized insurer that is not an eligible surplus lines insurer as provided under this section.   No unauthorized insurer shall be or become an eligible surplus lines insurer, unless:  The unauthorized insurer is a United States domiciled insurer and it is authorized to write the type of insurance in its domiciliary jurisdiction and one of the following criteria is met:  The unauthorized insurer has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction which equals the greater of:   The minimum capital and surplus requirements under the law of this state; or   Fifteen million dollars ($15,000,000); or     If the unauthorized insurer does not satisfy the requirements of subdivision (b)(1)(A), the commissioner makes an affirmative finding that the unauthorized insurer is acceptable. The commissioner's finding shall be based upon such facts as quality of management, capital and surplus of any parent company, company underwriting profit and investment income trends, market availability and company record and reputation within the industry. In no event shall the commissioner make an affirmative finding of acceptability when the unauthorized insurer's capital and surplus is less than four million five hundred thousand dollars ($4,500,000); or     The unauthorized insurer is not a United States domiciled insurer but is listed by the NAIC International Insurers Department.     If, at any time the commissioner has reason to believe that any unauthorized insurer then on the list of eligible surplus lines insurers no longer meets conditions of eligibility, has willfully violated the laws of this state or does not conduct a proper claims practice, the commissioner may declare it ineligible.   The commissioner shall promptly mail notice of all declarations made pursuant to subsection (c) to each surplus lines agent at the agent's most recent address that is on record with the commissioner.   
  Insurance contracts procured as surplus line insurance coverage from unauthorized companies in accordance with this chapter shall be fully valid and enforceable as to all parties, and shall be given recognition in all matters and respects to the same effect and extent as like contracts issued by authorized companies.   A contract of insurance placed in effect by an unauthorized company in violation of this chapter is unenforceable by the company. The insured shall not be precluded from enforcing the insured's rights in accordance with the terms and provisions of the contract.   
  If an unauthorized company has assumed the risk in accordance with this chapter, and if the premium for the insurance has been received by the surplus lines agent who placed the insurance, then in all questions thereafter arising under the coverage as between the insurance company and the insured, the insurance company shall be deemed to have received the premium due to it for the coverage. The insurance company shall be liable to the insured as to losses covered by the insurance, and for unearned premiums that may become payable to the insured upon cancellation of the insurance, whether or not, in fact, the surplus lines agent is indebted to the insurer with respect to the insurance, or for any other cause.   Each unauthorized company assuming a surplus lines insurance risk under this chapter shall be deemed to have subjected itself to the requirements of this section.   
  An unauthorized company may be sued upon any cause of action arising in this state under any surplus lines insurance contract issued by it or certificate, cover note or other confirmation of the insurance issued by the surplus lines agent, pursuant to the same procedure as is provided for unauthorized insurers in chapter 2, part 6 of this title and  56-7-105(b). The policy issued by the insurer, or any certificate of insurance issued by the surplus lines agent, shall contain a provision stating the substance of this section and designating the person to whom the commissioner shall mail process.   Each unauthorized company assuming a surplus lines insurance risk pursuant to this chapter shall be deemed to have subjected itself to the requirements of this section.   This section shall be cumulative to any other methods that may be provided by law for service of process upon the insurer.   
  The premiums charged for surplus lines insurance are subject to a gross premium tax in an amount to be determined by subsection (b).    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.   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.   The surplus lines agent is prohibited from rebating, for any reason, any part of the tax.   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.   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.   For the purposes of this section, premium includes all premiums, membership fees, assessments, dues, or any other consideration for insurance collected under this section.   The tax collected under this section shall be in lieu of all other insurance taxes.   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.     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.    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.   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.   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.   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.     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.   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.   
 Any agent who is granted a surplus lines license in accordance with this chapter may bring announcements or statements before the public in respect to the agent's ability to place surplus lines insurance as may be permitted by this chapter.  
 Agents licensed in accordance with this chapter shall not pay the whole or any part of the commission on surplus lines insurance to any person, except that the commissions may be shared or divided with any other person licensed by the commissioner as a surplus lines agent or licensed pursuant to chapter 6 of this title.  
  Each surplus lines agent shall keep in the agent's office in this state a full and true record of each surplus lines contract procured by the agent for or on behalf of an insured whose home state is the state of Tennessee, including a copy of the daily report, if any, and showing such of the following items as may be applicable:  Amount of the insurance and perils insured against;   Brief general description of property insured and where located;   Gross premium charged;   Return premium paid, if any;   Rate of premium charged upon the several items of property;   Effective date of the contract and its terms;   Name and post office address of the insured;   Name and home office address of the insurer;   Amount collected from the insured; and   Other information as required by the commissioner.     The record shall at all times be open to examination by the commissioner without notice, and shall be kept available and open to the commissioner for three (3) years next following expiration or cancellation of the contract.   
 Any violation of this part shall subject the agent to the revocation or suspension of the surplus lines agent's license for a period of not less than one (1) year and a fine of not more than five hundred dollars ($500).  
 Fidelity or bonding corporations have the power to execute as surety, and guarantee the performance of:   All bonds, stipulations, or undertakings conditioned for the faithful performance of any duty, public or private, including the bonds and obligations of such a character, as well of private individuals as of public officers, whether state, county, or municipal;   All bonds and obligations required to be executed in the course of judicial proceedings in any of the courts of the state; and   All bonds of administrators, executors, guardians and trustees, and of all persons acting in a fiduciary capacity, whether acting under the authority of any court of this state, or by virtue of a deed, will or other instrument executed by a private individual or corporation, or by virtue of any appointment to any position of trust or confidence by any private individual or corporation; provided, that no fidelity or bonding company shall receive deposits subject to check, or do a general banking business. A fidelity or bonding company that receives deposits subject to check, or does a general banking business commits a Class C misdemeanor.   
 Whenever any recognizance, stipulation, bond or undertaking, conditioned for the faithful performance of any duty, or for doing or refraining from doing anything in the recognizance, stipulation, bond or undertaking specified, is by law required or permitted to be given with one (1) surety, or with two (2) or more sureties, for execution of the same or the guaranteeing of the performance of the condition thereof, it shall be sufficient when executed or guaranteed solely by a corporation incorporated under the laws of the United States, of this state, or any state, having power to guarantee the fidelity of persons holding positions of public or private trust, and to execute and guarantee bonds and undertakings in judicial proceedings; provided, that the recognizance, stipulation, bond or undertaking shall be approved by the head of the department, court, judge, officer, board or body executive, legislative or judicial required to approve or accept the recognizance, stipulation, bond or undertaking. No officer or person having the approval of any bond shall exact that it shall be furnished by a guaranty company, or by any particular guaranty company.  
 No such company, organized under the laws of any sovereignty other than this state, shall do business under this chapter until it has appointed the commissioner its true and lawful attorney as required and provided by  56-2-103, upon whom may be served all lawful process against the company in accordance with  56-2-504.  
  Every company, before transacting any business under this chapter, shall deposit with the commissioner a copy of its charter, or articles of incorporation, and a statement, signed and sworn to by its president and secretary, showing its assets and liabilities.   If the commissioner is satisfied that the company has authority under its charter to do the business provided for in this chapter, and that it has a paid-up capital of not less than one hundred thousand dollars ($100,000) in cash, or its equivalent, and is able to keep and perform its contracts, the commissioner shall grant authority, in writing, to the company to do business under this chapter.   
  Before any surety company is authorized to execute the bonds referred to in this chapter, it shall deposit in the office of the commissioner one hundred thousand dollars ($100,000) in lawful money of the United States, or an equal amount in the bonds of the United States, or of this state, the bonds to be estimated at their actual value, and the deposit shall be continually kept at that amount during the time the corporation or company remains bound upon any bond or obligation as contemplated in this chapter.   The deposit shall be held by the commissioner as security for any liability incurred by the company making the deposit by reason of the breach of any bond or obligation referred to in this chapter; provided, that:  The surety or guaranty company organized under the laws of any other state or government, and having a general deposit in some state of the United States of a sum not less than one hundred thousand dollars ($100,000) consisting of lawful money of the United States, or of an equal amount in the bonds of the United States, or of any state, the value of which shall be at or above par, as security for any liability incurred under this chapter, shall be required to keep on deposit only the sum of twenty-five thousand dollars ($25,000) in the state, consisting of lawful money of the United States, or an equal amount in the bonds of the United States, or of this state;   No deposit in this state shall be required of any company organized under the laws of any other state or government that has an actual paid-up cash capital of three hundred thousand dollars ($300,000), of which at least two hundred thousand dollars ($200,000) is invested in the bonds of the United States, or other good securities, to be itemized and certified as such by the commissioner of insurance of the state in which the sum is deposited, reckoning the same at their current market value, and to be approved by the commissioner of commerce and insurance, which two hundred thousand dollars ($200,000) shall be deposited with and held by the commissioner of insurance or other proper officer of some state of the United States as security for the protection of all policyholders and creditors in the United States;   The surety company organized under the laws of any other state, and having the general deposit, shall file with the commissioner of commerce and insurance a certificate from the officer of the state with whom the general deposit has been made, showing that the company has deposited with the officer the sums required in the lawful money of the United States, or an equal amount in the securities provided for in this section, for the benefit of all liabilities of the company in any or all states; and   The commissioner of commerce and insurance is authorized and directed to return to the surety company organized under the laws of any other state or government that has filed, or hereafter files, with the commissioner the certificates provided for in subdivision (b)(3), all securities that were deposited by the surety company with the state treasurer, and which funds or securities have, under  56-15-106, been transferred to the commissioner of commerce and insurance, under this section.     
 The commissioner is the custodian of all funds and securities deposited with this state for the benefit of policyholders, or for other purposes, by insurance companies writing a fidelity, bonding, or surety business in this state.  
  Every such company shall, in the months of January, April, July and October of each year, file with the commissioner a statement, signed and sworn to by its president and secretary, showing its assets and liabilities, as is required by  56-15-104.   The commissioner has the power and the duty to revoke the authority of the company to transact any new business under this chapter whenever, in the commissioner's judgment, the company is not solvent or is conducting its business in violation of this chapter.   The commissioner may institute inquiry at any time into the solvency of the company, and whenever satisfied that the authority of the company to do business under this chapter should be revoked, and upon in fact revoking the authority, the commissioner shall forthwith transmit, by mail, to the county clerk of each county a properly certified copy of the act of revocation, and shall, moreover, cause to be published, in a daily newspaper issued in the cities of Knoxville, Chattanooga, Nashville, and Memphis, a copy of the order of revocation.   
  It is unlawful for the corporation to write or cause to be written any policy or fidelity contract, except through licensed resident agents who shall countersign and record the policies or contracts and receive the full commission usually paid on business of the same classification in this state.   This section does not apply to bid bonds issued by the corporation in connection with any public or private contract.   
 It is unlawful for the resident agent to sign the policy in blank.  
 The commissioner and the commissioner's deputies have the power to inquire into any violations of  56-15-108 or  56-15-109, and to examine any person or persons under oath.  
 The commissioner shall revoke for one (1) year the license of any company or agent found guilty of any violation of  56-15-108 or  56-15-109.  
 Any surety company doing business under this chapter may be sued in respect to doing business under this chapter in any court that has now, or hereafter may have, jurisdiction of actions or suits upon the recognizance, stipulation, bond, or undertaking in the county in which the recognizance, stipulation, bond, or undertaking was made or guaranteed, or in the county in which the principal office of the company is located; and, for the purposes of this chapter, the recognizance, stipulation, bond, or undertaking shall be treated as made or guaranteed in the county in which the office is located, to which it is returnable or in which it is filed, or in the county in which the principal in the recognizance, stipulation, bond, or undertaking resided when it was made or guaranteed.  
 Any company that executes or guarantees any recognizance, stipulation, bond or undertaking under this chapter shall be estopped, in any proceeding to enforce the liability that it has assumed to incur, to deny its corporate power to execute or guarantee the instrument or assume the liability.  
 If the company neglects or refuses to pay any final judgment or decree rendered against it upon the recognizance, stipulation, bond or undertaking made or guaranteed by it under this chapter, from which no appeal, writ of error or supersedeas has been taken for thirty (30) days after the rendition of the judgment or decree, it shall forfeit all right to do business in this state.  
 A company that fails to comply with  56-15-102  56-15-107 and 56-15-112  56-15-114, shall forfeit to the state, for every failure, not less than five hundred dollars ($500) nor more than five thousand dollars ($5,000), to be recovered by suit in the name of the state of Tennessee, in the same courts in which suit may be brought against the company under this chapter, and the failure shall not affect the validity of any contract entered into by the company.  
  This chapter shall be known and may be cited as the Exchange or Reciprocal Insurance Act of 1990.   This chapter shall apply to all reciprocals and reciprocal insurance as defined in  56-16-102.   
  As used in this title, unless the context otherwise requires:  Reciprocal means the aggregation of subscribers under a common name; and   Reciprocal insurance means insurance resulting from the mutual exchange of insurance contracts among persons in an unincorporated association under a common name through an attorney-in-fact having authority to obligate each person both as insured and insurer.     As used in this chapter, unless the context otherwise requires:  Attorney means the person designated and authorized by subscribers as the attorney-in-fact having authority to obligate them on reciprocal insurance contracts;   Commissioner means the commissioner of commerce and insurance;   Department means the department of commerce and insurance;    Person means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society; and   Person also includes the federal government, any state, any county, city, town, school board, or any other local governmental authority or local agency or public service corporation owned, operated or controlled by a locality or local government authority, with power to enter into contractual undertakings within or without the state; and     Subscriber means a person obligated under a reciprocal insurance agreement.     
 A reciprocal licensed to transact the business of insurance in this state may write the classes of insurance enumerated in  56-2-101.  
 Except as otherwise provided, all the provisions of this title relating to insurers generally, and those relating to insurers writing the same classes of insurance that reciprocals are permitted to write, are applicable to reciprocals.  
  Persons of this state may enter into reciprocal insurance contracts with each other and with persons of other states and countries, providing indemnity among themselves from any loss that may be insured against under other laws, excepting life insurance.   For any corporation now existing or hereafter organized under the laws of this state, the power and authority to enter into reciprocal insurance contracts shall be in addition to the powers conferred upon it in its certificate of incorporation, and shall be incidental to the purposes for which the corporation is organized.   
 Every reciprocal shall have and use a business name that includes the word reciprocal, interinsurer, interinsurance, exchange, underwriters or underwriting.  
 No reciprocal shall engage in any insurance transaction in this state until it has obtained a license to do so in accordance with the applicable provisions of chapter 2, part 1 of this title.  
 No foreign reciprocal shall be licensed to transact the business of insurance in this state unless it has filed with the department a certificate of the supervising insurance official of the state in which it is organized. The certificate shall show that the foreign reciprocal is licensed to write and is writing actively in that state the class of insurance it proposes to write in this state.  
 Nothing in this title regarding the admission and licensing of foreign and alien insurers requires that the attorney of a foreign or alien reciprocal be a resident or domiciled in this state, or that the principal office of the attorney be maintained in this state. The office or offices of the attorney shall be determined by the subscribers through the power of attorney.  
 Reciprocal insurance contracts shall be executed by the attorney of the reciprocal.  
 No person shall act in this state as an agent of a reciprocal in the solicitation or procurement of applications for insurance, subscriber's agreements and powers of attorney, or in the collection of premiums in connection with the reciprocal insurer, without first procuring a license from the department pursuant to the requirements in chapter 6 of this title. An agent shall be appointed by each reciprocal the agent represents.  
  Each subscriber insured under an assessable policy shall have a contingent assessment liability for payment of actual losses and expenses incurred while the subscriber's policy was in force. This shall be in the amount provided for in the power of attorney or subscriber's agreement.   The contingent assessment liability on any one (1) policy in any one (1) calendar year shall equal the premiums earned on the policy for that year multiplied by not less than one (1) nor more than ten (10).   The contingent assessment liability shall not be joint, but shall be individual and several.   Each assessable policy issued by the insurer shall plainly set forth a statement of the contingent assessment liability on the front of the policy in capital letters in no less than ten-point type.   
  The department may issue a certificate authorizing the reciprocal to reduce or extinguish the contingent assessment liability of subscribers under its policies then in force in this state, and to omit provisions imposing contingent assessment liability in all policies delivered or issued for delivery in this state for as long as the two million dollar ($2,000,000) surplus requirement of this chapter remains unimpaired. The certificate shall be issued if:  A reciprocal has surplus to policyholders of at least two million dollars ($2,000,000); and   An application of the attorney for extinguishment has been approved by the board of directors.     Upon impairment of the surplus to policyholders, the department shall revoke the certificate. After revocation, the reciprocal shall not issue or renew any policy without providing for the contingent assessment liability of subscribers.   The department shall not authorize a domestic reciprocal to extinguish the contingent assessment liability of any of its subscribers or in any of its policies to be issued, unless it has the required surplus to policyholders and extinguishes the contingent assessment liability of all of its subscribers and in all policies to be issued for all classes of insurance written by it. However, if required by the laws of another state in which the domestic reciprocal is transacting the business of insurance as a licensed insurer, it may issue policies providing for the contingent assessment liability of its subscribers acquiring policies in that state and need not extinguish the contingent assessment liability applicable to policies already in force in that state.   
 A reciprocal may return to its present or past subscribers, or both, any savings or credits accruing to their accounts. The distribution shall not unfairly discriminate between classes of risks or policies, or between subscribers. However, the distribution may vary for classes of subscribers based upon the experience of those classes.  
 Each reciprocal shall maintain the same unearned premium and loss or claim reserves required for stock and mutual companies writing the same classes of insurance.  
   Each attorney of a domestic reciprocal who files the declaration required by  56-16-201, and each attorney of a foreign or alien reciprocal who applies for a license to transact the business of insurance in this state, shall file with the department a written power of attorney executed by the attorney appointing the commissioner as agent of the reciprocal.   Upon the appointment, the commissioner:  May be served all lawful process against or notice to the reciprocal; and   Shall be authorized to enter an appearance on behalf of the reciprocal.     A copy of the power of attorney, duly certified by the department, shall be received in evidence in all courts of this state.     Whenever process or notice is served upon the commissioner, a copy of the process or notice shall be mailed to the attorney at the address shown on the power of attorney. Nothing in this section shall limit the right to serve any process or notice upon any reciprocal in any other manner permitted by law.   
  Any reciprocal doing business in this state may sue or be sued in the name or designation under which its insurance contracts are effected.    Any action or suit against a reciprocal may be brought in any county where:  Its principal office is located; or   The cause of action or any part of the cause of action arose.     If the action or suit is to recover a loss under a policy of insurance, it may also be brought in the county where the property insured was situated at the date of the policy.   Any action or suit against a foreign or alien reciprocal may also be brought in any county of this state in which it has any debts owed to it.     In an action or suit against a reciprocal, process against or notice to the reciprocal may be served upon the commissioner.   
 Any judgment against a reciprocal based upon legal process duly served as provided in this chapter shall be binding upon the reciprocal and upon each of the reciprocal's subscribers as their respective interests may appear, in an amount not exceeding their respective contingent assessment liabilities.  
 Section 56-3-103 shall not bar a person who performs legal or other professional services for a reciprocal from serving as a member of the board of directors, or committee of the board, or as an officer of the reciprocal because the person receives payment for legal or other professional services rendered to the reciprocal.  
 Subscribers contracting among themselves pursuant to part 1 of this chapter shall, through their attorney, file with the commissioner a declaration verified by the oath of the attorney, setting forth:   The name or title of the office at which the subscribers propose to exchange the indemnity contracts. The name or title shall not be so similar to any other name or title previously adopted by a similar organization, or by any insurance corporation or association as in the opinion of the commissioner is calculated to result in confusion or deception. The office or offices through which the indemnity contracts shall be exchanged shall be classified as reciprocal or interinsurance exchanges;   The kind or kinds of insurance to be effected or exchanged;   A copy of the form of policy contract or agreement under or by which the insurance is to be effected or exchanged;   A copy of the form of the subscriber's agreement and power of attorney or other authority of the attorney under which the insurance is to be effected or exchanged;   The location of the office or offices from which the contracts or agreements are to be issued;   That applications have been made for indemnity upon at least twenty-five (25) separate risks aggregating not less than one million five hundred thousand dollars ($1,500,000) as represented by executed contracts or bona fide applications to become concurrently effective, or, in the case of liability or compensation insurance, covering a total payroll of not less than one million five hundred thousand dollars ($1,500,000); and   That there is on deposit with the attorney and available for the payment of losses a sum of not less than twenty-five thousand dollars ($25,000).   
 The attorney shall maintain on deposit with the department an equal amount in cash or in value of securities as required by  56-2-104(a)(4).  
 The board of directors exercising the subscribers' rights in a domestic reciprocal shall be selected under rules adopted by the subscribers. At least three fourths (34) of the board shall be composed of subscribers other than the attorney or any person employed by, representing or having a financial interest in the attorney. The board shall supervise the finances of the reciprocal and the reciprocal's operations to the extent required to assure their conformity with the subscriber's agreement and power of attorney and shall exercise any other powers conferred on it by the subscriber's agreement.  
  Every subscriber of a domestic reciprocal may execute a subscriber's agreement and power of attorney setting forth the rights, privileges and obligations of the subscriber as an underwriter and as a policyholder, and the powers and duties of the attorney. If the reciprocal does not require execution of a subscriber's agreement and power of attorney, the reciprocal shall include on its policies a statement that the subscriber shall be bound by the terms and conditions of the then current subscriber's agreement and power of attorney on file with the attorney and the department, and each subscriber shall by operation of law be bound by the subscriber's agreement and power of attorney as if individually executed. Without additional execution, notice or acceptance, every subscriber of a domestic reciprocal agrees to be bound by any modification of the terms of the power of attorney and subscriber's agreement that is jointly made by the attorney and the board of directors pursuant to  56-16-205. The subscriber's agreement and power of attorney shall contain in substance the following:  A designation and appointment of the attorney to act for and bind the subscriber in all transactions relating to or arising out of the operations of the reciprocal;   A provision empowering the attorney to:  Accept service of process on behalf of the reciprocal; and   Appoint the commissioner agent of the reciprocal upon whom may be served all lawful process against or notice to the reciprocal;     Except for nonassessable policies, a provision for a contingent assessment liability of each subscriber in a specified amount in accordance with  56-16-112; and   The maximum amount to be deducted from advance premiums or deposits to be paid the attorney, and the items of expense, in addition to losses, to be paid by the reciprocal.     The subscriber's agreement may:  Provide for the right of substitution of the attorney and revocation of the power of attorney;   Impose any restrictions upon the exercise of the power agreed upon by the subscribers;   Provide for the exercise of any right reserved to the subscribers directly or through the board of directors; or   Contain other lawful provisions considered advisable.     
 Modification of the terms of the power of attorney and subscriber's agreement of a domestic reciprocal shall be made jointly by the attorney and the board of directors. The modification shall be filed with the attorney and the department, and the filing shall by operation of law bind all subscribers the same as if each subscriber individually adopted and executed the modified, altered or amended subscriber's agreement and power of attorney. No modification shall be effective retroactively, nor shall it affect any insurance contract issued prior to the modification.  
 The attorney or other interested persons may advance to a domestic reciprocal any funds required in its operations. The funds advanced shall not be treated as a liability of the reciprocal and shall not be withdrawn or repaid except out of the reciprocal's earned surplus in excess of its minimum required surplus.  
  Assessments may be levied upon the subscribers of a domestic reciprocal by the attorney in accordance with  56-16-112. The assessments shall be approved in advance by the board of directors and the department.   Each domestic reciprocal subscriber's share of a deficiency for which an assessment is made shall be computed by multiplying the premiums earned on the subscriber's policies during the period to be covered by the assessment by the ratio of the total deficiency to the total premiums earned during the period upon all policies subject to the assessment. However, no assessment shall exceed the aggregate contingent assessment liability computed in accordance with  56-16-112. For the purposes of this section, the premiums earned on the subscriber's policies are the gross premiums charged by the reciprocal for the policies, minus any charges not recurring upon the renewal or extension of the policies. No subscriber shall have an offset against any assessment for which the subscriber is liable on account of any claim for unearned premium or losses payable.   
 Every subscriber of a domestic reciprocal having contingent assessment liability shall be liable for and shall pay the subscriber's share of any assessment computed in accordance with  56-16-207 if, while the policy is in force or within one (1) year after its termination, the subscriber is notified:   By the attorney of the attorney's intention to levy the assessment; or   That delinquency proceedings have been commenced against the reciprocal under chapter 9 of this title, and the department or receiver intends to levy an assessment.   
 Upon the liquidation of a domestic reciprocal, its assets shall be distributed pursuant to chapter 9 of this title.  
   The domestic reciprocal's attorney shall levy an assessment upon subscribers made subject to assessment by the terms of their policies for the amount needed to make up the deficiency, if:  The assets of a domestic reciprocal are at any time insufficient to settle the sum of its liabilities, except those on account of funds contributed by the attorney or other parties, and its required surplus to policyholders; and   The deficiency is not cured from other sources;     However, the assessment shall be subject to  56-16-112.     If the attorney fails to make the assessment within thirty (30) days after the department orders it to do so, or if the deficiency is not fully made up within sixty (60) days after the date the assessment was made, delinquency proceedings may be instituted and conducted against the insurer as provided in chapter 9 of this title.   If liquidation of the reciprocal is ordered, an assessment shall be levied upon the subscribers for the amount the department or the court, as the case may be, determines to be necessary to discharge all liabilities of the reciprocal. This assessment shall exclude any funds contributed by the attorney or other persons, but shall include the reasonable cost of the liquidation. However, the assessment shall be subject to  56-16-112.   
 Any company may restrict its business to the insurance of the lives of its members or stockholders alone, it being the intent of this section to permit of a corporate existence to any professional association, guild, brotherhood or other mutual association, the right, by an arrangement among themselves, as stockholders in a corporation, to insure the lives of each other upon the principle of the mutual participation in the profits, by annual subscriptions, or otherwise, and thereby provide a fund out of which provision may be made, according to the bylaws of the corporation, for the support of the family of any stockholder on the stockholder's death, or for the payment of any policy due the stockholder's estate on the stockholder's death. In case the corporation restricts its business to the insurance of the lives of stockholders, no publication need be made annually of its debt and liabilities.  
  A domestic mutual life insurance company operating under this chapter shall not receive an original or renewal certificate of authority from the commissioner to issue policies or contracts of insurance unless it possesses and maintains capital or surplus funds as required by  56-2-114.   Subsection (a) does not apply to any insurance company chartered prior to March 15, 1976.   
 The corporate powers of a mutual life insurance corporation shall be exercised by, and its business and affairs shall be under the control and government of, a board of directors composed of not less than fifteen (15) nor more than twenty-one (21) natural persons who are policyholders and who are at least eighteen (18) years of age, and at least seven (7) of whom are residents and citizens of this state.  
 In order to secure continuity of membership in its board of directors, the bylaws of the corporation may provide for division of the board into no more than seven (7) classes as nearly equal in number as possible, and may fix the term of office for each class. Unless such provision is made in the bylaws, all directors shall be elected annually.  
   All directors, as provided in  56-18-104, shall be elected at an annual meeting of the policyholders of the company, and other questions at the meeting shall be determined, in the manner and subject to the regulations prescribed.    For the purposes of the meeting or election, policyholder means:   A person insured by the corporation under an individual life insurance policy or pure endowment contract;   A person to whom the corporation has issued an individual annuity contract, or a policy of noncancelable and guaranteed renewable accident and health insurance; or   Any employer, including the mutualized corporation itself, or other person, firm, corporation or association, some or all of whose employees or members are covered by the corporation with a group life insurance plan or contract or with a group annuity plan or contract;     In all cases, the person shall be qualified as a policyholder under this section only so long as the policy or contract so qualifying the person remains in full force other than as reduced paid-up insurance or extended insurance on the date of the meeting or election, and shall have been so in full force for at least one (1) year prior to that date; and   Every policyholder shall be entitled to one (1) vote, or to a number of votes based upon the insurance in force, the number of policies held, or the amount of premiums paid, as may be provided in the bylaws.       Any vacancy occurring on the board of directors may be filled by a majority vote of the board for the unexpired term to which the vacancy relates.   
  Policyholders, as defined in  56-18-105, shall be notified of the annual meetings or elections:  By written notice;   By an imprint upon the filing backs of their policies;   In case of policies on which the premiums are payable monthly or more often, on some other prominent place of each policy; or   Upon receipts or certificates of renewal.     The annual meetings or elections shall be held and conducted in accordance with rules prescribed in the bylaws of the corporation adopted by its board of directors and approved by the commissioner.   Policyholders may vote in person, or by proxies dated and executed within three (3) months of, and returned and recorded on the books of the company thirty (30) days or more before, the meeting at which they are to be used. No person shall, as attorney or otherwise, cast more than twenty (20) votes other than those to which the person is entitled as a policyholder, except that the secretary of the corporation may cast as many votes as are possessed by policyholders sending the secretary their proxies, but the secretary shall not solicit any proxy vote, nor shall any other officer, employee or agent of the corporation personally, or by another person or organization, ask for, receive, procure to be obtained or use a proxy vote.   
 An officer, employee or agent of the corporation who asks for, receives, procures to be obtained or uses a proxy vote in violation of  56-18-106 shall be punished by a fine of not less than one hundred dollars ($100), nor more than three hundred dollars ($300), and any proxy vote so obtained shall be null and void.  
  Any domestic stock life insurance corporation, duly incorporated under the laws of this state, may become a mutual life insurance corporation, and to that end may carry out a plan for the acquisition of shares of its capital stock; provided, that the plan has been:  Adopted by a vote of a majority of the directors of the corporation;   Submitted to the commissioner and has been approved by the commissioner in writing as conforming to this chapter and not prejudicial to policyholders;   Approved by a vote of stockholders representing a majority of the capital stock then outstanding; and   Approved by a majority of the policyholders, as defined in this chapter, voting at a meeting called for the purpose, the majority required being a majority of those policyholders who vote at the meeting, and not a majority of all the policyholders.     As used in this chapter:  Commissioner means the commissioner of commerce and insurance;   Domestic stock life insurance corporation means a corporation organized and doing business under the laws of this state, with its principal office or place of business located within the state, having an authorized capital stock, and shares of capital stock, and engaged in writing life insurance or life, health and accident insurance, either separately or in combined policies; and   Mutual life insurance corporation means a corporation organized and doing business under the laws of this state, upon the principle of a mutual participation in the profits, with its principal office or place of business located within the state, without capital stock or shares of capital stock, engaged in the writing of life insurance or life, health and accident insurance, either separately or in combined policies.     If, at the time of any election called for the purpose of approving or disapproving a plan of mutualization or called for any purpose after a plan of mutualization is approved or adopted or completed, an insured is below fifteen (15) years of age, then the insured's parent or other legal guardian, upon proper affidavit, may cast the insured's vote. An insured fifteen (15) years of age or older may cast the person's own vote.   In the case of any individual policy or contract insuring two (2) or more persons jointly, the persons insured shall be deemed one (1) policyholder, within the meaning of this section. In the case of any group life or group annuity policy or contract, the employer or other person, firm, corporation or association to whom or in whose name the master policy has been issued and held shall be deemed one (1) policyholder, within the meaning of this section.   In case the policy or contract has been assigned by a bona fide assignment absolute on its face to an assignee other than the corporation, and the assignment has been filed at the home office of the corporation at least thirty (30) days prior to the date of any meeting called for the purpose of approving or disapproving a plan of mutualization, then the assignee shall be deemed a policyholder, insofar as the person's interest may appear, for the purpose of voting on the plan of mutualization; provided, that the policy is of the type and size required by  56-18-110(b). Except as provided in this section, an assignee of a policy or contract shall not be deemed to be a policyholder within the meaning of this section.   
 The plan of mutualization, if properly approved as provided in  56-18-108, may contain any provision or provisions not in conflict with this chapter or the constitution or other statutory laws of the state.  
  If a plan of mutualization has been adopted by a vote of a majority of the directors of the corporation, approved by the commissioner, and approved by a vote of stockholders representing a majority of the capital stock then outstanding, a written notice of the meeting of policyholders to consider the plan shall be given by mailing the notice from the home office of the company to each policyholder holding a single policy in the amount of one thousand dollars ($1,000) or more at least thirty (30) days prior to the meeting in a sealed envelope, postage prepaid, addressed to the policyholder at the policyholder's last known post office address, and by a newspaper advertisement published at least thirty (30) days prior to the meeting, and not more than sixty (60) days prior to the meeting, in one (1) newspaper published in the capital city of each state in which the company is qualified to transact business.   A policyholder eligible to vote at the meeting is any policyholder who holds life insurance in the company in a total amount at least equal to one thousand dollars ($1,000), or a policy of noncancellable and guaranteed renewable accident and health insurance with an annual premium of one hundred dollars ($100) or more. The reference in this subdivision (b) to insurance in the amount of one thousand dollars ($1,000) or more includes any policy or policies with a total face or principal sum amount of one thousand dollars ($1,000) or more, any annuity contract or contract that at normal date of maturity requires the payment of a total of one hundred dollars ($100) or more annually, and any pure endowment contract or contracts for the total principal sum of one thousand dollars ($1,000) or more; provided, that the policy or policies or contracts have been in force, other than as reduced paid-up insurance or extended insurance, for at least one (1) year immediately preceding the meeting.   Each policyholder shall be entitled to one (1) vote at the policyholders' meeting, regardless of the number of policies or contracts held or their amounts.   
  The policyholders' meeting for the purpose of voting on the plan of mutualization shall be conducted in the manner provided in the mutualization plan; provided, that policyholders may vote in person, by proxy, or by mail and all votes shall be cast by ballot on a uniform ballot furnished by the corporation. The commissioner shall appoint no fewer than three (3) nor more than five (5) inspectors who shall observe the voting at the meeting and report to the commissioner as to the procedures employed at the meeting to verify the ballots, to ascertain their validity, and to establish the qualification of the voters. The inspectors shall canvass the vote in the presence of at least two (2) representatives named by the corporation, and shall certify to the commissioner and to the corporation the result of the vote. All necessary actual expenses, including reasonable per diem for the inspectors, incurred by the inspectors in performing the services, shall be paid by the corporation upon the certificate of the commissioner.   Every payment for the acquisition of any shares of the capital stock of the corporation, the purchase price of which is not fixed by the plan, shall be subject to the approval of the commissioner. Neither the plan, nor any payment, shall be approved by the commissioner, unless at the time of the approvals, respectively, the corporation, after deducting the aggregate sum appropriated by the plan for the acquisition of any part or all of its capital stock, and in the case of any payment not fixed by the plan and subject to separate approval after the approval of the plan, after deducting also the amount of the payment, shall be possessed of assets sufficient to maintain its deposit theretofore made with the commissioner, and not less than the liabilities of the corporation required by law, including the net values of its outstanding contracts computed according to the standard adopted by the corporation under the applicable statutes of this state.   
   If a stock life insurance corporation determines to become a mutual life insurance corporation, it may, in carrying out any plan to that end under this chapter, acquire any shares of its own stock by gift, bequest or purchase.   Until all of the shares are acquired, any shares so acquired shall be assigned and transferred on the books of the corporation to five (5) trustees for the corporation, and shall be held by them in trust and be voted as a unit by them at all corporate meetings at which stockholders have a right to vote, until all of the capital stock of the corporation is acquired, when the entire capital stock shall be retired and cancelled and, thereupon, the corporation shall be made and become a mutual life insurance corporation without capital stock.   Before undertaking any of the duties of appointment, each trustee shall file with the company a verified acceptance of the appointment and a declaration that the trustee will faithfully discharge all duties as trustee, and shall give bond as required by the mutualization plan.   All dividends and other sums received by the trustees on the shares of stock so acquired by them, shall, after paying the necessary expenses of executing the trust, be added to and become a part of the surplus earned by the company.     The five (5) trustees shall be named in the plan of mutualization originally adopted by the directors of the corporation, and shall be approved by the commissioner. The plan of mutualization shall also provide for the method of filling vacancies occurring among the trustees.   
 When a stock life insurance corporation has become converted into a mutual life insurance corporation as provided in this chapter, the officers and directors shall remain as the officers and directors of the newly converted corporation until the next annual meeting for the election of officers and directors when their successors shall be elected in the manner provided for in this chapter and in the bylaws of the corporation.  
 When a stock life insurance corporation has become converted into a mutual life insurance corporation as provided in this chapter, it shall have all the rights, privileges and powers conferred upon it by its charter and any amendments to its charter, and all the rights, privileges and powers conferred by general laws of this state either expressly applicable to a mutual life insurance corporation or containing general language within the scope and purview of which a mutual life insurance corporation falls.  
 Neither the retirement of its capital stock nor any other action taken under this chapter shall affect existing suits, rights or contracts of the corporation. Any deposit made by the corporation under any requirement of an applicable statute of this state shall be retained by the commissioner in trust for the benefit and security of all of the policyholders of the corporation.  
 Any time before the mutualization of the corporation is complete, the corporation may abandon a plan of mutualization by the same procedure as was followed in adopting the plan. Upon abandonment, any right of any stockholder to be paid for stock in accordance with the plan shall cease and terminate, and the corporation shall continue to conduct its business as a domestic stock life insurance corporation as though no plan of mutualization had ever been adopted.  
 Any number of persons, not less than twenty (20), a majority of whom are bona fide residents of this state, by complying with this chapter, may become, together with others who may thereafter be associated with them or their successors, a body corporate for the purpose of carrying on the business of mutual insurance as provided in this chapter.  
 No name shall be adopted by the company that does not contain the word mutual, or that is so similar to any name already in use by any such existing corporation, company or association, organized and doing business in the United States, as to be confusing or misleading.  
 Any persons proposing to form any such company shall subscribe and acknowledge articles of incorporation specifying:   The name, the purpose for which formed, and the location of its principal or home office, which shall be within this state;   The names and addresses of those composing the board of directors in which the management shall be vested until the first meeting of the members; and   The names and places of residence of the incorporators.   
 Articles executed in duplicate shall be submitted to the commissioner of commerce and insurance, who, upon finding them to comply with this chapter, shall endorse approval thereon and shall file one (1) in the commissioner's office and shall cause the other to be filed and recorded as may be required in the case of other corporations.  
 Upon approval as provided in  56-19-104, the commissioner or any other officer that may be charged with the duty in the case of other corporations shall issue to the company a certificate that shall be its authority to begin business.  
 The articles may be amended in the manner provided for other corporations or as may be provided in the articles, and any such amendment shall be filed and recorded as in the case of the original articles.  
  The company shall have legal existence from and after the date of the certificate of incorporation.    The board of directors named in the articles may thereupon adopt bylaws, accept applications for insurance and proceed to transact the business of the company; provided, that no insurance shall be put into force until the company has been licensed to transact insurance as provided by this chapter.   The bylaws and any amendments thereto shall within thirty (30) days after adoption be filed with the commissioner.     
 Any company organized under this chapter is empowered to make contracts of insurance or to reinsure or accept reinsurance or any portion thereof, to the extent specified in its articles of incorporation, for insurance:   Against loss or damage to property and loss of use and occupancy by fire, lightning, hail, tempest, flood, earthquake, frost or snow, explosion, fire ensuing and explosion, no fire ensuing, except explosion by steam boilers or flywheels; against loss or damage by water caused by the breakage or leakage of sprinklers, pumps or other apparatus, waterpipes, plumbing or their fixtures, erected for extinguishing fires, and against accidental injury to the sprinklers, pumps or other apparatus, waterpipes, plumbing or fixtures; against the risks of inland transportation and navigation; upon automobiles, whether stationary or operated under their own power, against loss or damage by any of the causes or risks specified in this subdivision (1), including also transportation, collision liability for damage to property resulting from owning, maintaining or using automobiles, and including burglary and theft, but not including loss or damage by reason of bodily injury to the person;   Against loss, expense or liability by reason of bodily injury or death by accident, disability, sickness or disease suffered by others for which the insured may be liable or have assumed liability, including workers' compensation;   Against bodily injury or death by accident and disability by sickness;   Against any or all loss, expense and liability resulting from the ownership, maintenance, or use of any automobile or other vehicle; provided, that no policies shall be issued under this subdivision (4) against the hazard of fire alone;   Against loss or liability to persons or property resulting from explosions or accidents to boilers, containers, pipes, engines, flywheels, elevators and machinery in connection therewith, and against loss of use and occupancy caused thereby, and to make inspections and issue certificates of inspection of the machinery;   Against loss from interruption of trade or business that may be the result of any accident or casualty; and   Against loss or damage by any hazard upon any risk not provided for in this section that is not prohibited by statute or at common law from being the subject of insurance, excepting life insurance.   
 No such company shall issue policies or transact any business of insurance, unless it holds a license from the commissioner authorizing the transaction of the business, which license shall not be issued until and unless the company complies with the following conditions:   It shall hold bona fide applications for insurance upon which it shall issue simultaneously, or it shall have in force, at least twenty (20) policies to at least twenty (20) members for the same kind of insurance upon not less than two hundred (200) separate risks, each within the maximum single risk described in subdivision (2);   The maximum single risk shall not exceed twenty percent (20%) of the admitted assets or three (3) times the average risk of one percent (1%) of the insurance in force, whichever is the greater, any reinsurance taking effect simultaneously with the policy being deducted in determining the maximum single risk;   It shall have collected a premium upon each application, which premiums shall be held in cash or securities in which insurance companies are authorized to invest and shall be equal, in case of fire insurance to not less than twice the maximum single risk assumed subject to one (1) fire nor less than ten thousand dollars ($10,000), and in any other kind of insurance to not less than five (5) times the maximum single risk assumed, and in case of workers' compensation insurance to not less than fifty thousand dollars ($50,000);   For the purpose of transacting employer's liability and workers' compensation insurance, the applications shall cover not less than one thousand five hundred (1,500) employees, each such employee being considered a separate risk for determining the maximum single risk; and   Satisfy the commissioner that its financial condition, methods of operation and manner of doing business are adequate to meet its obligations to all policyholders in this state.   
 The mutual company may insert in any form of policy prescribed by the law of this state any provisions or conditions required by its plan of insurance that are not inconsistent or in conflict with any law of this state. The policy, in lieu of conforming to the language and form prescribed by the law, may conform thereto in substance, if the policy includes a provision or endorsement reciting that the policy shall be construed as if in the language and form prescribed by the law, and a copy of the policy and endorsement, if any, has been first filed with, and has not been disapproved by, the commissioner.  
  Any public or private corporation, board or association in this state or elsewhere may make applications, enter into agreements for and hold policies in any such mutual insurance company. Any officer, stockholder, trustee or legal representative of any such corporation, board, association or estate may be recognized as acting for or on its behalf for the purpose of the membership, but shall not be personally liable upon the contract of insurance by reason of acting in the representative capacity.   The right of any corporation organized under the laws of this state to participate as a member of any such mutual insurance company is declared to be incidental to the purpose for which the corporation is organized and as much granted as the rights and powers expressly conferred.   
 Every member of the company shall be entitled to one (1) vote, or to a number of votes based upon the insurance in force, the number of policies held or the amount of premiums paid, as may be provided in the bylaws.  
  The maximum premium payable by any member shall be expressed in the policy or in the application for the insurance. The maximum premium may be a cash premium and the contingent premium not less than the cash premium, or may be solely a cash premium.   No policy shall be issued for a cash premium without an additional contingent premium, unless the company has a surplus of at least one hundred thousand dollars ($100,000) or a surplus that is not less in amount than the capital stock required of domestic stock insurance companies transacting the same kinds of insurance.   
 No such company shall invest any of its assets except in accordance with the laws of this state relating to the investment of the assets of domestic stock insurance companies transacting the same kind of insurance.  
 The mutual company shall maintain unearned premium and other reserves separately for each kind of insurance, upon the same basis as that required of domestic stock insurance companies transacting the same kind of insurance, and the funds earned by each kind of insurance shall be kept separate and shall not be available to pay losses or expenses incurred by any other kind of insurance; provided, that any reserve for losses or claims based upon the premium income shall be computed upon the net premium income after deducting any so-called dividend or premium returned or credited to the member.  
 A mutual company not possessed of assets at least equal to the unearned premium reserve and other liabilities shall make an assessment upon its members liable to assessment to provide for the deficiency, the assessment to be against each such member in proportion to the liability as expressed in the member's policy; provided, that the commissioner may, by written order, relieve the company from an assessment or other proceeding to restore the assets during the time fixed in that order; and provided further, that any domestic company that is deficient in providing the unearned premium reserve required hereby may, notwithstanding the deficiency, come under this chapter on the condition that it shall each year thereafter reduce the deficiency at least fifteen percent (15%) of the original amount, and in this case it may increase its assessments accordingly.  
  Any director, officer or member of any such company, or any other person, may advance to the company any sum or sums of money necessary for the purpose of its business or to enable it to comply with any of the requirements of the law, and the money and the interest thereon as may have been agreed upon, not exceeding the legal rate of interest, shall be payable only out of the surplus remaining after providing for all reserves and other liabilities and shall not otherwise be a liability or claim against the company or any of its assets.   No commission or promotion expenses shall be paid in connection with the advance of any such money to the company and the amount of the advance shall be reported in each annual statement.   
  Any mutual insurance company organized outside of this state and authorized to transact the business of insurance on the mutual plan in any state, district, or territory, shall be admitted and licensed, subject to the approval of the commissioner as provided for in this chapter, to transact the kinds of insurance authorized by its charter or articles to the extent and with the powers and privileges specified in this chapter and when it is solvent under this chapter, and has complied with the following requirements:  Filing with the commissioner a certified copy of its charter or articles and a certificate of the supervising insurance official of the state, district, or territory, in which it is incorporated, that it is there organized and authorized to do such business as it desires to transact in this state;   Filing with the commissioner a copy of its bylaws certified to by its secretary;   Appointing the commissioner its agent for the service of process in any action, suit, or proceeding in any court of this state, which authority shall continue as long as any liability shall remain outstanding in this state;   Filing a financial statement under oath, in the form that the commissioner may require, and complying with other provisions of the law applicable to the filing of papers and furnishing information by stock companies on application for authority to transact the same kinds of insurance;   If organized without the United States, making and maintaining the deposit required of stock insurance companies formed without the United States transacting the same kinds of insurance; and   Its name shall not be so similar to any name already in use by any such existing corporation, company or association organized or licensed in this state as to be confusing or misleading.     Upon compliance by any such foreign company with this section, the company shall be licensed and authorized to transact business in this state, subject to all the provisions of law relating to information to and examinations by the commissioner, annual reports, taxes and the renewal of licenses, applicable to stock insurance companies transacting the same kinds of insurance, except as otherwise provided in this chapter.   
 Every mutual insurance company shall make its annual report in such form and submit to such examinations and furnish such information as may be required by the commissioner. As far as practicable, the examinations of foreign mutual insurance companies shall be made in cooperation with the insurance departments of other states and the forms of the annual report shall be such as are in general use throughout the United States.  
 Any such company organized or admitted to transact insurance in this state may reinsure any part or all of any risk or risks, in any insurance company or insurer licensed in this state; provided, that no such reinsurance shall be effected with any company or insurer not licensed in this state that has been disapproved  by written order of the commissioner filed in the commissioner's office.  
 Any law requiring that policies be countersigned and delivered through a resident agent shall not apply to any policy of the mutual company on which no commission shall be paid to any local agent.  
 Except as provided in this chapter, insurance companies organized or admitted to do business in this state under this chapter are not subject to any other law of this state governing insurance companies unless they are specifically mentioned or clearly included in its terms.  
 Any person or corporation violating this chapter commits a Class C misdemeanor, and the commissioner has the power to revoke the license of any such person or corporation.  
 Each and every requirement and provision of  56-2-101  56-2-104, 56-2-113  56-2-115, 56-2-201 and 56-2-301 relating to the kinds of business as defined in those sections, required deposits with the commissioner, and required surplus of insurance companies, shall be fully and specifically applicable to all insurance companies organized under this chapter.  
  A state malpractice insurance company organized under Tennessee law may become a state stock malpractice insurance company operating under this chapter pursuant to a plan and procedure that is approved in advance by the commissioner. The commissioner shall not approve any such plan or procedure unless:  The plan or procedure is equitable to the insurer's policyholders;   The plan or procedure is subject to approval by vote of not less than three fourths (34) of the votes cast in person, by proxy, or by mail at a meeting of policyholders called for the purpose pursuant to the notice and procedure as may be approved by the commissioner;   The equity of each policyholder in the insurer is determinable under a fair formula approved by the commissioner. The equity shall be based upon not less than the insurer's entire surplus, after deducting contributed or borrowed surplus funds and any outstanding guaranty capital securities, plus a reasonable present equity in its reserves and in all nonadmitted assets;   The policyholders entitled to receive stock upon conversion and to participate in the purchase of additional stock, if any, include all policyholders having policies in force on the date of conversion;   The plan provides that each policyholder of the insurer specified in subdivision (a)(4) shall receive a proportionate part of the capital stock to be issued in respect to the policyholders' equity. The plan also gives to each such policyholder a nontransferable preemptive right to acquire a proportionate part of any additional capital stock to be issued and sold by the insurer, within a designated reasonable period. In addition to the issuance of shares with respect to the policyholders' equity, if the insurer has outstanding guaranty capital securities, the plan shall require the sale of a sufficient number of shares (at the same price per share as all other shares issued under the plan) to retire the guaranty capital securities. To the extent each policyholder specified in subdivision (4) does not exercise the preemptive right to purchase a pro rata number of shares to retire the guaranty capital securities, the holders of the guaranty capital securities shall have the right to convert the securities, including all accrued interest, into shares of capital stock at such price;   Shares are so offered to policyholders at a price not greater than that thereafter offered to others nor at more than five (5) times the par value of the shares; and   The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a state stock insurer under this chapter; provided, that this provision does not apply to any converting mutual companies that were qualified and authorized under this chapter prior to May 7, 1969.      As used in this section, unless the context otherwise requires:  Commissioner is the commissioner of commerce and insurance;   Converted stock company is a Tennessee domiciled stock company that converted from a Tennessee domiciled mutual company under this section;   Eligible member is a member whose policy is in force as of the date the mutual company's board of directors adopts a plan of conversion. A person whose policy is issued after the board of directors adopts the plan but before the plan's effective date is not an eligible member but shall have those rights set forth in subdivision (b)(10); and   Plan of conversion or plan is a plan adopted by a Tennessee domestic mutual company's board of directors under this section to convert the mutual company into a Tennessee domiciled stock company.      A mutual company seeking to convert to a stock company shall, by the affirmative vote of not less than two thirds (2/3) of its board of directors, adopt a plan of conversion consistent with the requirements of subdivision (b)(6).   At any time before approval of a plan by the commissioner, the mutual company by the affirmative vote of two thirds (2/3) of its board of directors, may amend or withdraw the plan.      After adoption by the mutual company's board of directors, the plan shall be submitted to the commissioner for review and approval. The commissioner shall approve the plan upon finding that:   This subsection (b) has been complied with;   The plan will not prejudice the interests of the members; and   The plan's method of allocating subscription rights is fair and equitable.       (a)  Prior to the members' approval of the plan, a mutual company seeking the commissioner's approval of a plan shall file the following documents with the commissioner for review and approval:    The plan of conversion, including the independent evaluation of pro forma market value required by subdivision (b)(6)(F);      The form of notice required by subdivision (b)(10)(A) for persons whose policies are issued after adoption of the plan but before the plan's effective date; and   The proposed charter and bylaws of the converted stock company.  The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing the plan and the independent evaluation of the pro forma market value that is required by subdivision (b)(6)(F).  (A)  All eligible members shall be given notice of and an opportunity to vote upon the plan.    All eligible members shall be given notice of the members' meeting to vote upon the plan. A copy of the plan or a summary of the plan shall accompany the notice. The notice shall be mailed to each member's last known address, as shown on the mutual company's records, within forty-five (45) days of the commissioner's approval of the plan. The meeting to vote upon the plan shall not be set for a date less than sixty (60) days after the date when the notice of the meeting is mailed by the mutual company. If the meeting to vote upon the plan is held coincident with the mutual company's annual meeting of policyholders, only one (1) combined notice of meeting is required.     After approval by the commissioner, the plan shall be adopted upon receiving the affirmative vote of at least two thirds (2/3) of the votes cast by eligible members.   Members entitled to vote upon the proposed plan may vote in person or by proxy. Any proxies to be solicited from eligible members shall be filed with and approved by the commissioner.   The number of votes each eligible member may cast shall be determined by the mutual company's bylaws. If the bylaws are silent, each eligible member may cast one (1) vote.       The following provisions shall be included in the plan:  The plan shall set forth the reasons for the proposed conversion;     The plan shall provide that all policies in force on the effective date of conversion shall continue to remain in force under the terms of those policies, except that any voting rights of the policyholders provided for under the policies or under this code, and any contingent liability policy provisions of the type described in  56-19-116 shall be extinguished on the effective date of the conversion;   The plan shall further provide that holders of participating policies in effect on the date of conversion shall continue to have the right to receive dividends as provided in the participating policies, if any;   The converted stock company may issue the insured a nonparticipating policy as a substitute for a participating policy upon the renewal date of a participating policy;       The plan shall provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of the converted stock company. As an alternative to subscription rights in the converted stock company, the plan may provide that each eligible member is to receive, without payment, nontransferable subscription rights to purchase a portion of the capital stock of:  A corporation organized and owned by the mutual company for the purpose of purchasing and holding all the stock of the converted stock company; or   A stock insurance company owned by the mutual company into which the mutual company will be merged;     The subscription rights shall be allocated in whole shares among the eligible members using a fair and equitable formula. This formula may, but need not, take into account how the different classes of policies of the eligible members contributed to the surplus of the mutual company;     The plan shall provide a fair and equitable means for the allocation of shares of capital stock in the event of an oversubscription to shares by eligible members exercising subscription rights received pursuant to subdivision (b)(6)(C);   The plan shall provide that any shares of capital stock not subscribed to by eligible members exercising subscription rights received under subdivision (b)(6)(C) shall be sold in a public offering through an underwriter. If the shares of capital stock not subscribed by eligible members is so small in number as to not warrant the expense of a public offering, the plan of conversion may provide for the purchase of the unsubscribed shares by a private placement or other alternative method approved by the commissioner that is fair and equitable to the eligible members;   The plan shall set the total price of the capital stock equal to the estimated pro forma market value of the converted stock company based upon an independent evaluation by a qualified person. The pro forma market value may be the value that is estimated to be necessary to attract full subscription for the shares as indicated by the independent evaluation;   The plan shall set the purchase price of each share of capital stock equal to any reasonable amount that will not inhibit the purchase of shares by members. The purchase price of each share shall be uniform for all purchasers except the price may be modified by the commissioner by reason of the commissioner's consideration of a plan for the purchase of unsubscribed stock pursuant to subdivision (b)(6); and   The plan shall provide that any one (1) person or group of persons acting in concert may not acquire, through public offering or subscription rights, more than five percent (5%) of the capital stock of the converted stock company for a period of five (5) years from the effective date of the plan except with the approval of the commissioner. This limitation does not apply to any entity that is to purchase one hundred percent (100%) of the capital stock of the converted company as part of the plan of conversion approved by the commissioner or to a purchase of stock by a tax-qualified employee benefit plan pursuant to subscription grants granted to that plan as authorized under subdivision (b)(6)(C) and to a purchase of unsubscribed stock pursuant to subdivision (b)(6)(E).     The following provisions may be included in the plan:    The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula;   The total number of shares that may be purchased under subdivision (b)(7)(A)(i) may not exceed thirty-five percent (35%) of the total number of shares to be issued in the case of a mutual company with total assets of less than fifty million dollars ($50,000,000) or twenty-five percent (25%) of the total shares to be issued in the case of a mutual company with total assets of more than five hundred million dollars ($500,000,000). For mutual companies with total assets between fifty million dollars ($50,000,000) and five hundred million dollars ($500,000,000), the total number of shares that may be purchased shall be interpolated;   Stock purchased by a director or officer under subdivision (b)(7)(A)(i) may not be sold within one (1) year following the effective date of the conversion; and   The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for three (3) years after the effective date of the plan, except through a broker or dealer, without the permission of the commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subdivision (b)(7)(A)(i).     The plan may allocate to a tax-qualified employee benefit plan nontransferable subscription rights to purchase up to ten percent (10%) of the capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in subdivision (b)(6)(C)(i). That employee benefit plan shall be entitled to exercise its subscription rights regardless of the amount of shares purchased by any other person.     The board of directors may adopt a plan of conversion that does not rely in whole or in part upon the issuance to members of nontransferable subscription rights to purchase stock of the converted stock company if the commissioner finds that the plan does not prejudice the interests of the members, is fair and equitable, and is based upon an independent appraisal of the market value of the mutual company by a qualified person and a fair and equitable allocation of any consideration to be given eligible members. The commissioner may retain, at the mutual company's expense, any qualified expert not otherwise a part of the commissioner's staff to assist in reviewing whether the plan may be approved by the commissioner.   A plan shall become effective when the commissioner has approved the plan, the members have approved the plan, and the revised charter has been adopted.    All members whose policies are issued after the proposed plan has been adopted by the board of directors and before the effective date of the plan shall be given written notice of the plan of conversion. The notice shall specify the member's right to rescind that policy as provided in subdivision (b)(10)(B) within forty-five (45) days after the effective date of the plan. A copy of the plan or a summary of the plan shall accompany the notice. The form of the notice shall be filed with and approved by the commissioner.   Any member entitled to receive the notice described in subdivision (b)(10)(A) shall be entitled to rescind the member's policy and receive a full refund of any amounts paid for the policy or contract within ten (10) days after the receipt of the notice.      Upon the conversion of a mutual company to a converted stock company according to this subsection (b), the corporate existence of the mutual company shall be continued in the converted stock company. All the rights, franchises, and interests of the mutual company in and to every type of property, real, personal, and mixed, and things in action thereunto belonging, is deemed transferred to and vested in the converted stock company without any deed or transfer. Simultaneously, the converted stock company is deemed to have assumed all the obligations and liabilities of the mutual company.   The directors and officers of the mutual company, unless otherwise specified in the plan of conversion, shall serve as directors and officers of the converted stock company until new directors and officers of the converted stock company are duly elected pursuant to the charter and bylaws of the converted stock company.     No director, officer, agent, or employee of the mutual company or any other person shall receive any fee, commission, or other valuable consideration, other than the person's usual regular salary and compensation, for in any manner aiding, promoting, or assisting in the conversion except as set forth in the plan approved by the commissioner. This provision does not prohibit the payment of reasonable fees and compensation to attorneys, accountants and actuaries for services performed in the independent practice of their professions, even if the attorney, accountant or actuary is also a director of the mutual company.   All the costs and expenses connected with a plan of conversion shall be paid for or reimbursed by the mutual company or the converted stock company except where the plan provides either for a holding company to acquire the stock of the converted stock company or for the merger of the mutual company into a stock insurance company as provided in subdivision (b)(6)(C)(i). In those cases, the acquiring holding company or the stock insurance company shall pay for or reimburse all the costs and expenses connected with the plan.   If the mutual company complies substantially and in good faith with the notice requirements of this subsection (b), the mutual company's failure to give any member or members any required notice does not impair the validity of any action taken under this subsection (b).   Any action challenging the validity of or arising out of acts taken or proposed to be taken under this subsection (b) shall be commenced within thirty (30) days after the effective date of the plan.     Any insurance company organized under this chapter may become a state stock insurance company pursuant to subsection (b).    The form of notice required by subdivision (b)(4)(B) for eligible members of the meeting to vote on the plan;   Any proxies to be solicited from eligible members pursuant to subdivision (b)(4)(C)(ii);   Once filed, these documents shall be approved or disapproved by the commissioner within a reasonable time.   After the members have approved the plan, the converted stock company shall file the following documents with the commissioner:   The minutes of the meeting of the members at which the plan was voted upon; and   The revised charter and bylaws of the converted stock company.   Adoption of the revised charter of the converted stock company is necessary to implement the plan and shall be governed by the applicable provisions of the general corporation law. The revised charter may be adopted solely by the board of directors.  
 This section,  56-2-102  56-2-104, 56-2-113  56-2-115, 56-2-201, and 56-2-301 shall be applicable to both domestic and foreign insurance companies unless otherwise specifically provided in a particular section or subsection.  
  No domestic insurance company or foreign insurance company shall commence business in this state until it has complied with  56-2-101, this section,  56-2-103,  56-2-104, 56-2-113  56-2-115, 56-2-201, and 56-2-301, and has received from the commissioner a certificate of authority to do business.   Any company organized under the laws of any other state or country, and that is admitted to do business in this state for the purpose of writing insurance authorized by this chapter, upon complying with all of the requirements of law relative to the organization of domestic insurance companies and payment of fees by like domestic insurance corporations, and designating its principal place of business at a place in this state, may become a domestic corporation and be entitled to like certificates of its corporate existence and license to transact business in this state, and be subject in all respects to the authority and jurisdiction of this state.   A foreign credit life reinsurance company that meets the capital requirements of  56-2-114(b) and that has at least fifty percent (50%) of its outstanding voting stock owned by persons or entities domiciled in this state, shall be entitled to obtain certificates of its corporate existence and shall be licensed to transact its business in this state, and be subject in all respects to the authority and jurisdiction of this state, if the following conditions are met:  Approval by the commissioner of commerce and insurance in its state of domicile to change its state of domicile to this state;   Submission to the Tennessee commissioner of commerce and insurance of a certificate of good standing from its state of domicile;   Compliance with all of the requirements of law relative to the organization of domestic insurance companies and payment of fees required by domestic insurance companies; and   Designation of a place in this state as its principal place of business.     
  No domestic or foreign insurance company shall be qualified and authorized to do business in this state until:  It files or deposits with the commissioner a properly certified copy of its charter or deed of settlement and, if a foreign insurance company, a statement of its financial condition and business on December 31 preceding the date on which it applies for permission to transact business, in the form and detail the commissioner requires, signed and sworn to by its president and secretary, or other proper officers, and pays for the filing of the copy and statement the sum of one hundred dollars ($100). If it is a foreign insurance corporation, it shall also file and deposit with the commissioner a certified statement of the secretary of state to the effect that its name complies with the requirements of title 48, chapter 14 or title 48, chapter 54, as applicable;   It satisfies the commissioner that it is fully and legally organized under the laws of the state or foreign nation of its incorporation, and that it possesses and maintains the amount of capital, if a stock company, or surplus funds, if a mutual, reciprocal or Lloyd's plan insurer, required by  56-2-114 and the amount of additional surplus required by  56-2-115, to do the kind or kinds of business it proposes to transact;   It, by duly executed instrument filed in the commissioner's office, constitutes and appoints the commissioner, the commissioner's chief deputy, or their successors, its true and lawful attorneys upon either of whom all lawful process in any action or legal proceeding against it may be served, and in the instrument agrees that any lawful process against it, which may be served upon its attorney, shall be of the same force and validity as if served on the company, and that the authority of the instrument shall continue in force, irrevocably, as long as any liability of the company remains outstanding in this state. Any process issued by any court of record in this state and served upon the commissioner or the commissioner's chief deputy by the proper officer of the county in which the commissioner or the chief deputy may have an office shall be deemed a sufficient process on the company, and it is the duty of the commissioner or the chief deputy, promptly, after service of process by any claimant, to forward, by registered mail, an exact copy of the notice to the company. Service of process from any county in this state upon the commissioner or the chief deputy by the proper officer of the county in which the commissioner or the chief deputy may have an office shall establish proper venue in the county from which the process was issued, if the plaintiff resides in that county, whether the insurance company has an office or agency located in one (1) or more other counties of this state or not;    If it is a foreign stock or mutual life insurance company, it satisfies the commissioner that it has and shall maintain on deposit with the state treasurer, or with the proper officer of some other state, securities in the actual cash value of at least two hundred thousand dollars ($200,000) consisting of bonds of the United States, or any agency or instrumentality of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms, bonds of this state, bonds of the state of domicile, or bonds publicly issued by any solvent institution created or existing under the laws of the United States or any state of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms, and the company files with the commissioner the certificate of the official with whom the securities are deposited, stating the time and amount, and that the official is satisfied that they are worth two hundred thousand dollars ($200,000) and that the deposit is made with the official by the company for the protection of all policyholders and creditors in the United States;   Notwithstanding subdivision (a)(4)(A), the commissioner may decline to accept as a deposit any specific issue of securities that the commissioner has determined may not provide the necessary protection to policyholders and creditors in the United States;     If it is a foreign insurance company, it files a report of its real estate holdings, if required by the commissioner in the commissioner's discretion, so as to give the information required concerning domestic life insurance companies in  56-3-305. The commissioner may refuse to admit and authorize a foreign insurance company to do business in this state in the event its land and the building or buildings on the land in which it has its principal office, and its other real property used in the transaction of insurance business, exceeds the maximum percentage of its admitted assets prescribed for domestic life insurance companies in  56-3-305; and   The commissioner shall not approve any articles of incorporation or issue a certificate of authority to any company until finding that:  The company has submitted a plan of operation; and   The incorporators, directors and proposed officers are of known good character and there is no good reason to believe that they are affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions or other insurance or business relations with any person or persons known to have been involved in the improper manipulation of assets, accounts, reinsurance, or any matter inimical to the business of insurance.       The commissioner is authorized to promulgate rules and regulations the commissioner deems reasonable and necessary requiring the furnishing of information relative to election or appointment of new officers and directors by insurance companies licensed to do business in this state. If, after a hearing afforded the officer or director and the insurance company, the commissioner finds that the officer or director is incompetent, untrustworthy, or of known bad character, the commissioner may order the removal of the person as an officer or director of the insurance company. If the insurance company does not comply with the removal order within thirty (30) days after its receipt of the order, the commissioner may suspend the insurance company's certificate of authority to do business in this state until such time as the company is in compliance with the order.   
  Any domestic company shall satisfy the commissioner that:  It is fully and legally organized under the laws of this state to do the business it proposes to transact;    If it is a stock life insurance company or a mutual life insurance company, it has and will maintain on deposit with the state treasurer, or with such other officer designated by law, at least two hundred thousand dollars ($200,000) in cash or its equivalent; but the commissioner may, in the commissioner's discretion, accept as an equivalent bonds of the United States, or any agency or instrumentality of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms, bonds of this state, bonds of the state of domicile, or bonds publicly issued by any solvent institution created or existing under the laws of the United States or any state of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms;   Notwithstanding subdivision (a)(2)(A), the commissioner may decline to accept as a deposit any specific issue of securities that the commissioner has determined may not provide the necessary protection to policyholders and creditors in the United States;     The company shall likewise be required to file with the commissioner the certificate of the official with whom the securities are deposited, stating the time and amount of bonds of the United States, or any agency or instrumentality of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms, bonds of this state, bonds of the state of domicile, or bonds publicly issued by any solvent institution created or existing under the laws of the United States or any state, which have been included in the three (3) highest grades by any of the recognized securities rating firms, and that the commissioner is satisfied they are worth two hundred thousand dollars ($200,000), and that the deposit was made with the commissioner by the company for the protection of all policyholders and creditors in the United States;   Notwithstanding subdivision (a)(2)(C)(i), the commissioner may decline to accept as a deposit any specific issue of securities that the commissioner has determined may not provide the necessary protection to policyholders and creditors in the United States;       If the applicant is an insurance company other than a stock or mutual life insurance company, each company shall maintain on deposit at least one hundred thousand dollars ($100,000) in cash or its equivalent for each kind or class of insurance as defined in  56-2-201; but the commissioner, in the commissioner's discretion, may accept as an equivalent bonds of the United States, or any agency or instrumentality of the United States, which have been included in the three (3) highest grades by any of the recognized securities rating firms, bonds of this state, bonds of the state of domicile, or bonds publicly issued by any solvent institution created or existing under the laws of the United States or any state, which have been included in the three (3) highest grades by any of the recognized securities rating firms;   Notwithstanding subdivision (a)(2)(D)(i), the commissioner may decline to accept as a deposit any specific issue of securities that the commissioner has determined may not provide the necessary protection to policyholders and creditors in the United States. The deposits shall be subject to the same conditions as required in the case of stock or mutual life insurance companies; and        The insurer's principal place of business is or will be located and maintained in this state. This subdivision (a)(3)(A) also applies to domestic health maintenance organizations. This subdivision (a)(3)(A) does not apply to:   Any insurer that was a domestic insurer prior to July 1, 1993, and whose primary executive, administrative and home offices were located outside of the state prior to July 1, 1993; or   Any domestic reciprocal whose primary executive, administrative and home offices, and original books and records, were located and maintained outside the state prior to January 1, 1996;     The commissioner may suspend or revoke, after notice and hearing, the certificate of authority of a domestic company found to be in violation of subdivision (a)(3)(A);   The commissioner, in the commissioner's sole discretion, may waive the requirement in subdivision (a)(3)(A) for any company.        The deposit required by this section is not applicable to foreign stock or mutual life insurance companies, or to domestic or foreign insurance companies writing workers' compensation insurance or fidelity and surety bonds. Companies writing that type or form of insurance shall make deposits in accordance with the requirements of existing laws.   The provisions of this section applicable to domestic insurance companies shall apply to all insurance companies and associations except those specifically exempted in this section, whether the companies are stock or mutual, and it is specifically provided that  56-2-101  56-2-103, this section,  56-2-113  56-2-115, 56-2-201, and 56-2-301 fully apply to all such companies or associations regardless of what law or statute of this state under which the companies or associations may have been organized.   No requirement in this section not in effect on January 1, 1967, shall be considered applicable to any insurance company properly licensed to transact business in this state as of that date, except that any stock casualty company, foreign or domestic, not having at least one hundred thousand dollars ($100,000) in cash or equivalent on deposit for each kind of insurance as defined in  56-2-201, shall meet the requirement by December 31, 1978. Domestic stock casualty companies not maintaining capital paid up of at least one hundred thousand dollars ($100,000) shall make a deposit equal to their capital paid up by December 31, 1977.   This section shall not apply to, or affect, or be construed as in anywise applying to, or affecting, domestic state and county mutual fire insurance companies, the organization of which was and is authorized by Chapters 19 21 of this title.     
 It is unlawful for any company to enter into a contract of insurance as an insurer or to transact insurance business in this state without a certificate of authority from the commissioner; provided, that this section shall not apply to:   Contracts procured by agents or brokers under the authority of the Surplus Lines Insurance Act, compiled in chapter 14 of this title;   Contracts of reinsurance;   Transactions in this state involving policies lawfully solicited, written and delivered outside of this state covering only subjects of insurance not resident, located or expressly to be performed in this state at the time of issuance or covering property in the course of transportation by land, air or water, to, from or through this state and including any preparation or storage incidental thereto, and which transactions are subsequent to the issuance of those policies;   Transactions in this state involving group or blanket insurance and group annuities where the master policy of the groups was lawfully issued and delivered in a state in which the company was authorized to transact insurance business;   Transactions in this state involving a policy issued prior to April 3, 1968;   Any life insurance or annuity company that holds a certificate of exemption from the commissioner as provided in  56-2-106; or    The procuring of contracts of insurance issued to an industrial insured;   For the purposes of subdivision (7)(A), an industrial insured is an insured:   Who procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer;   Whose aggregate annual premiums for insurance on all risks total at least twenty-five thousand dollars ($25,000); and   Who has at least twenty-five (25) full-time employees.       
  The commissioner shall, upon the payment of a filing fee of one hundred dollars ($100), grant a certificate of exemption to any life insurance or annuity company:  That is organized and operated without profit to any private shareholder or individual;   That is organized and operated exclusively for the purpose of aiding educational or scientific institutions that are also organized and operated without profit to any private shareholder or individual;   That serves that purpose by issuing insurance and annuity contracts only to or for the benefit of the educational or scientific institutions or to individuals engaged in the service of the institutions;   That appoints the commissioner, and the commissioner's successors in office, as its attorney to receive the service of process issued against it in this state, which appointment shall be irrevocable, shall bind the company and any successor in interest, and shall remain in effect so long as there is in force in this state any contract or policy made or issued by the company or any obligation arising from the contract or policy;   That is fully and legally organized and qualified to do business and that has been actively doing business under the laws of the state of its incorporation for a period of at least three (3) years prior to its application for a certificate of exemption, and possesses and maintains the amount of capital and surplus that would be required for a company to be qualified in this state to do the kind or kinds of business it transacts; and   Whose directors and officers are of known good character and are not affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations with any person known to have been involved in the improper manipulation of assets, accounts, reinsurance or any matter inimical to the business of insurance.     If, after reasonable notice and a hearing, the commissioner finds that any company holding a certificate of exemption no longer meets the requirements of subdivisions (a)(1)-(6), or finds that any company holding a certificate of exemption has been guilty of any unfair method of competition or any unfair or deceptive acts or practices, as defined in  56-8-104, the commissioner may enter an order suspending or revoking the certificate of exemption, which order may be reviewed by the writs of certiorari and supersedeas as otherwise provided by law.   Any company holding a certificate of exemption shall pay the premium tax imposed by  56-4-205 on all policies of life insurance issued after April 4, 1968, to residents of the state, which policies are not issued pursuant to a plan or program authorized by the governing board of the educational or scientific institution, and the premiums for which are not paid for in whole or in part by the educational or scientific institution.   
 Any of the following acts in this state, effected by mail or otherwise by an unauthorized insurer, are included among those deemed to constitute transacting insurance business in this state:   The issuance or delivery of contracts of insurance to residents of this state;   The solicitation of applications for contracts of insurance;   The collection of premiums, membership fees, assessments or other considerations for contracts of insurance; or   The transaction of matters subsequent to the execution of contracts of insurance and arising out of them.   
  Any company that violates  56-2-105 is subject to a fine or a civil penalty, or both, of not less than one hundred dollars ($100) nor more than five thousand dollars ($5,000) for each violation.   Each day in which a violation occurs constitutes a separate violation.   
 The failure of a company to obtain a certificate of authority shall not impair the validity of any act or contract of the company, and shall not prevent the company from defending any action at law or suit in equity in any court of this state; but no company transacting insurance business in this state without a certificate of authority shall be permitted to maintain an action at law or suit in equity in any court of this state to enforce any right, claim or demand arising out of the transaction of insurance business until the company has obtained a certificate of authority, nor shall an action at law or suit in equity be maintained in any court of this state by any successor or assignee of the company on any right, claim or demand originally held by the company until a certificate of authority has been obtained by the company or by a company that has acquired all or substantially all of its assets.  
  Whenever the commissioner believes, from evidence satisfactory to the commissioner, that any foreign or alien company is violating or is about to violate  56-2-105, the commissioner may, through the attorney general and reporter, cause a bill to be filed in the chancery court of Davidson County to enjoin and restrain the company from continuing the violation, engaging in the violation or doing any act in furtherance of the violation.   The court shall have jurisdiction of the proceeding and shall have the power to make and enter an order or decree awarding the preliminary or final injunctive relief as in its judgment is proper.   
 Any company violating  56-2-105 shall be liable, with respect to any contract of insurance or transaction of insurance business as defined and limited in  56-2-105, for the payment of all taxes on gross premiums imposed in chapter 4 of this title.  
  The state treasurer, in an official capacity, shall take and hold in trust deposits made by any domestic insurance company for the purpose of complying with the laws of any other state, to enable the company to do business in the other state, and shall also, in a like manner, take and hold any deposits made by a foreign insurance company under any law of the state.   The company making the deposits shall be entitled to the income of the deposits, and may, from time to time, with the consent of the state treasurer, when not forbidden by the law under which the deposits are made, change, in whole or in part, the securities that compose the deposit for other competent securities of equal value.    Upon the request of any domestic insurance company, the state treasurer may return to the company the whole or any portion of the securities of the company, when the state treasurer is satisfied that the securities so asked to be returned are subject to no liability, and not required to be longer held by any law or purpose of the original deposit.   The state treasurer may return to the trustees or other representatives, authorized for that purpose, of a foreign insurance company, any deposit made by the company, when it appears that the company has ceased to do business in the state, and is under no obligations to policyholders or other persons in the state or in the United States, for whose benefit the deposit was made.     
  No foreign insurance company transacting any of the kinds of insurance as defined in  56-2-201 shall be admitted and authorized to do business in this state until it can satisfy the commissioner that it has been organized and actively engaged in the insurance business in the state of its incorporation for a period of three (3) years prior to the date of its application to be admitted and authorized to do business in this state.   Subsection (a) does not apply to a foreign insurance company that is:  The wholly-owned subsidiary of an insurance company or health maintenance organization admitted and authorized to do business in this state;   The continuing corporation resulting from a merger or consolidation of insurance companies at least one (1) of which, prior to the merger or consolidation, met all the requirements for admission and authorization to do business in this state, including the requirement of having been actively engaged in the insurance business in its state of incorporation for three (3) years;   The wholly-owned subsidiary of a holding company that also owns one hundred percent (100%) of the common capital stock, excluding qualifying shares required to be held by directors, of an insurance company or health maintenance organization admitted and authorized to do business in this state; or   A foreign insurance company originally chartered and licensed to transact business in this state, and making application to redomesticate to this state upon furnishing the following from the commissioner of commerce and insurance of its state of domicile:  Letter of approval to redomesticate;   Letter of intent to permit the company to transfer its business and assets to this state; and   A certificate of good standing.       Owned and owns, as used in subsection (b), mean ownership either directly or indirectly through one (1) or more intermediaries.   The commissioner, in the commissioner's sole discretion, may waive the requirement in subsection (a) for any company, if the commissioner determines it is in the public interest.   
  An insurer otherwise qualified therefor may be authorized to transact combinations of kinds of insurance while processing and maintaining capital, if a stock company, or surplus funds, if a mutual, reciprocal, or Lloyd's plan insurer, in the amount of one million dollars ($1,000,000).   To transact the business of reinsuring credit life and credit accident insurance and health insurance, an insurer must possess and maintain capital in the amount of one hundred fifty thousand dollars ($150,000); provided, that a company so authorized shall not be authorized to conduct any other line of business unless otherwise qualified.   
 In addition to the paid up capital stock or surplus as required under  56-2-103 and 56-2-114(a), all insurance companies doing business in this state shall possess and maintain bona fide surplus funds in the amount of one million dollars ($1,000,000), except for insurance companies authorized under  56-2-114(b), which shall possess and maintain bona fide surplus funds equaling in amounts not less than fifty percent (50%) of the capital stock or surplus otherwise required by  56-2-114(b).  
  No requirement of  56-2-101  56-2-103, 56-2-113  56-2-115, 56-2-201, and 56-2-301 not in effect on March 1, 1986, shall be considered applicable to any insurance company properly licensed to transact business in this state on that date.   Notwithstanding subsection (a), any foreign insurance company filing an annual statement under  56-1-501, not possessing the minimum capital and surplus required by  56-2-114 and 56-2-115 on and after January 1, 1987, shall cease to write any new business until the minimum capital and surplus required are met.   Subsection (b) shall not apply to the procedures and capital requirements of a casualty company for the exclusive purpose of writing bonds only.   Any domestic insurer otherwise exempt under subsection (a) that at any time meets the capital and surplus requirements under this chapter shall thereafter be required to maintain the required capital and surplus limits.   
  Every policy of life insurance, accident and health insurance, property insurance or casualty insurance issued after January 1, 1989, covering risks in this state by a company not maintaining a policyholder service office in this state, shall be accompanied by the complete address and telephone number, toll-free if available, of the policyholder service office of the company issuing the policy. In the event an insurance company that has a policyholder's service office in this state ceases to maintain the office, the company shall provide its policyholders residing in this state with a written notice containing the complete address and telephone number, toll-free if available, of the servicing agent or the nearest policyholder service office of the company.   The commissioner may promulgate rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to effectuate the purposes of this section.   Failure to include the information required by subsection (a) shall be a deceptive act or practice and the procedures and penalties established by chapter 8, part 1 of this title, shall be applicable.   
  On every policy of insurance covering risks in this state that is issued after July 1, 1991, by an insurance company doing business in this state, there shall be printed the address of the company's home office, regional office or service center.   Failure to include the information required by subsection (a) is a deceptive act or practice, and the procedures and penalties established by chapter 8, part 1 of this title are applicable.   
  In addition to the minimum requirements set out in  56-2-114 and 56-2-115, and notwithstanding any other law to the contrary, the commissioner may require, after notice and hearing, additional amounts so that an insurer's capital, surplus funds, or surplus as regards policyholders shall be reasonable in relation to the insurer's outstanding liabilities and premiums, and adequate to its financial needs. For purposes of this part, in determining whether an insurer's surplus as regards policyholders is reasonable in relation to the insurer's outstanding liabilities and premiums and adequate to its financial needs, the following factors, among others, shall be considered:  The size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria;   The extent to which the insurer's business is diversified among the several lines of insurance;   The number and size of risks insured in each line of business;   The extent of the geographical dispersion of the insurer's insured risks;   The nature and extent of the insurer's reinsurance program;   The quality, diversification and liquidity of the insurer's investment portfolio;   The recent past and projected future trend in the size of the insurer's investment portfolio;   The surplus as regards policyholders maintained by other comparable insurers;   The adequacy of the insurer's reserves; and   The quality and liquidity of investments in affiliates. The commissioner may treat the investments as a disallowed asset for purposes of determining the adequacy or surplus as regards policyholders whenever, in the commissioner's judgment, the investment so warrants.     Before the commissioner takes any action pursuant to this section, the commissioner shall give written notice to the insurer involved, stating specifically the nature of the alleged deficiency in capital and surplus. Within ten (10) days after receiving notice, the insurer may request a hearing, which shall be held within thirty (30) days of the request. The burden of proof shall be on the commissioner to show the inadequacy of capital and surplus by the preponderance of the evidence. After the hearing, or if the insurer fails to request a hearing, the commissioner, if the commissioner finds a deficiency, may enter an appropriate order under this section as the commissioner deems advisable.   When the commissioner takes action in any or all of the ways set out in this section, the party aggrieved may appeal from the action to the chancery court of Davidson County.   
  A plan sponsored by a nonprofit corporation organized and created in this state primarily to promote programs for the improvement of the health of rural people in the state, which plan has provided health care benefits to the members of the corporation for a period in excess of ten (10) years, shall be deemed not to be insurance and not subject to this title, to the extent the plan, after July 1, 1993, provides the benefits under a self-funded arrangement; provided, that any stop-loss, excess or similar insurance coverage purchased as part of the plan shall be insurance subject to this title.   The provisions of this title to the contrary notwithstanding, a Program for All-Inclusive Care for the Elderly (PACE) project that is sponsored by a religious or charitable organization that is itself or is controlled by a person that is organized under  501(c)(3) of the Internal Revenue Code  (26 U.S.C.  501(c)(3)), and that has had its application for the operation of a PACE program approved by the health care financing administration of the United States department of health and human services (HHS), and is operating under such approval, shall not be deemed to be engaged in any business required to be licensed pursuant to this title. This exemption applies only to business conducted pursuant to the approved PACE contract, and not to any other business that such organization conducts that is subject to this title.   
 A nonprofit health maintenance organization that, with the approval of the commissioner, was created prior to January 1, 1981, by a corporation operated pursuant to chapter 28 or chapter 29 of this title may be treated by the corporation as a subsidiary solely for the purpose of determining the status of the nonprofit health maintenance organization as an admitted asset; provided, that the corporation otherwise has a net worth at least equal to the capital and surplus requirements for an insurance company under  56-2-114(a) and 56-2-115.  
 If verbal authorization is given to a health care provider, insured, or enrollee for medical care under any individual, franchise, blanket or group health insurance policy, medical service plan or contract, hospital service corporation contract, hospital and medical service corporation contract, fraternal benefit society, health maintenance organization, or managed care organization, the verbal authorization shall be confirmed by written authorization, facsimile transmission, or verbally by means of a confirmation number or other confirmation code.  
 No health insurer, prepaid group health plan, health maintenance organization, preferred provider organization or similar entity licensed under this part that provides or administers health insurance shall require, by contract or otherwise, any title 63 or title 68 licensee to indemnify or hold harmless the licensee under this title for tort or patent or copyright infringement liability that the  licensee under this title incurs, experiences, or causes by act or omission, or by act or omission of the title 63 or title 68 provider to the extent the act or omission was pursuant to a directive of the licensee under this title.  
  As used in this section, unless the context otherwise  requires:  All payer claims database means a database comprised of health insurance issuer and group health plan claims information that excludes the data elements in 45 CFR 164.514(e)(2);   Commissioner means the commissioner of commerce and insurance;   Department means the department of commerce and insurance;   Group health plan means an employee welfare benefit plan, as defined in  3(1) of the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1002(1)), to the extent that the plan provides medical care to employees or their dependents, as defined under the terms of the plan, or an administrator of the plan. For purposes of this section, group health plan shall not mean any plan that is offered through a health insurance issuer;   Health insurance coverage means health insurance coverage as defined in  56-7-2902, as well as medicare supplemental health insurance; and   Health insurance issuer means an entity subject to the insurance laws of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide health insurance coverage, including, but not limited to, an insurance company, a health maintenance organization and a nonprofit hospital and medical service corporation. Health insurance issuer also means a pharmacy benefits manager, a third party administrator and an entity described in  56-2-121.      The commissioner shall establish and maintain an all payer claims database to enable the commissioner of finance and administration to carry out the following duties:  Improving the accessibility, adequacy and affordability of patient health care and health care coverage;   Identifying health and health care needs and informing health and health care policy;   Determining the capacity and distribution of existing health care resources;   Evaluating the effectiveness of intervention programs on improving patient outcomes;   Reviewing costs among various treatment settings, providers and approaches; and   Providing publicly available information on health care providers' quality of care.     Nothing in this section shall preclude a health insurance issuer from providing information on health care providers' quality of care in accordance with  56-32-130(e).     [Deleted by 2018 amendment.]    As required by HIPAA, the all payer claims database shall not publicly disclose any individually identifiable health information as defined in 45 CFR 160.103. Use of the all payer claims database shall be subject to restrictions required by HIPAA and other applicable privacy laws and policies. The all payer claims database shall be accessed only by staff or a designated entity authorized in writing by the commissioner of finance and administration to perform the analyses contemplated by this section. The commissioner shall develop procedures and safeguards to protect the integrity and confidentiality of any data contained in the all payer claims database.      The all payer claims database, summaries, source, or draft information used to construct or populate the all payer claims database, patient level claims data, reports derived from the all payer claims database, and other information submitted under this section, whether in electronic or paper form, shall not be considered a public record and shall not be open for inspection by members of the public under  10-7-503(a)(1). The information contained in the all payer claims database shall be considered confidential and not subject to subpoena.   The commissioner may promulgate rules to authorize the public release of reports derived from the information. Any release of reports shall not result in such information losing its confidentiality or cause it to be admissible, except in administrative proceedings authorized under the rules adopted by the commissioner.     The commissioner shall, through memoranda of understanding, allow the use of the all payer claims database by the department of finance and administration, the department of health, the department of mental health and substance abuse services, the department of intellectual and developmental disabilities, and other departments of state government for the purposes listed in subdivision (b)(1).   Except for officials of the state or those officials' designees as permitted by subdivision (d)(1), nothing in this section shall be construed as permitting access to or discovery of the source or draft information used to construct or populate the all payer claims database.       The all payer claims database shall contain unique health care provider identifiers that may be used in public reports; provided, however, that no information that could reveal the identity of any patient from the all payer claims database shall be made available to the public. To ensure that individual patients are not identified, the following data shall not be included in any transmission by a group health plan or health insurance issuer to the state or designated entity for the all payer claims database or in any source or draft information used to construct or populate the all payer claims database:  Patient names;   Patient street addresses;   All elements of patient birth dates, except year of birth;   Patient telephone numbers;   Patient facsimile numbers;   Patient electronic mail addresses;   Patient social security numbers;   Medical record numbers;   Health plan beneficiary numbers;   Patient account numbers;   Patient certificate/license numbers;   Vehicle identifiers and serial numbers including license plate numbers;   Device identifiers and serial numbers;   Web universal resource locators (URLs);   Internet protocol (IP) address numbers;   Biometric identifiers including fingerprints, voiceprints, and genetic code;   Full-face photographic images and any comparable images; or   Any other unique patient identifying number, characteristic or code, except encrypted index numbers assigned prior to the transmission by group health plans or health insurance issuers to the state or designated entity for the purpose of linking procedures by patient; provided, that a patient's identity cannot be known from the encrypted index number.       No later than January 1, 2010, and every month thereafter, all group health plans and health insurance issuers shall provide electronic health insurance claims data for state residents to the commissioner or a designated entity authorized by the commissioner, in accordance with standards and procedures recommended by the Tennessee health information committee pursuant to subdivision (c)(2) and adopted by the commissioner by rule.   All group health plans and health insurance issuers shall provide additional information as the Tennessee health information committee recommends and the commissioner subsequently establishes by rule for the purpose of creating and maintaining an all payer claims database.   The Tennessee health information committee and the commissioner shall strive for standards and procedures that are the least burdensome for data submitters.     The collection, storage and release of health and health care data and statistical information that is subject to the federal requirements of HIPAA shall be governed by the rules adopted in 45 CFR parts 160 and 164.   All group health plans and health insurance issuers that collect the health employer data and information set (HEDIS) shall annually submit the HEDIS information to the commissioner in a form and in a manner prescribed by the National Committee for Quality Assurance (NCQA).   If any group health plan or health insurance issuer fails to submit required data to the commissioner on a timely basis, the commissioner may impose a civil penalty of up to one hundred dollars ($100) for each day of delay.     The commissioner, in the commissioner's discretion, may allow some group health plans and health insurance issuers to submit data on a quarterly basis. The commissioner may also establish by rule exceptions to the reporting requirements of this section for entities based upon an entity's size or amount of claims or other relevant factors deemed appropriate.    The commissioner may, subject to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, promulgate rules and regulations for purposes of implementing this section. The commissioner is authorized to promulgate the initial rules as emergency rules pursuant to the Uniform Administrative Procedures Act prior to January 1, 2010, for the purpose of creating the all payer claims database.   The commissioner of finance and administration may, subject to the Uniform Administrative Procedures Act, promulgate rules and regulations concerning the operation of the all payer claims database and the distribution and use of information maintained or created thereby. The commissioner of finance and administration is authorized to promulgate the initial rules as emergency rules pursuant to the Uniform Administrative Procedures Act prior to January 1, 2010, for the purpose of creating the all payer claims database.     
  The marketing, sale, offering for sale, issuance, making, proposing to make and administration of a service contract shall not be construed to be the business of insurance and shall be exempt from regulation as insurance pursuant to this title.    For purposes of this section, service contract means a contract or agreement for a separately stated consideration for a specific duration to perform the service, repair, replacement or maintenance of property or indemnification for service, repair, replacement or maintenance, for the operational or structural failure due to a defect in materials, workmanship, or normal wear and tear, with or without additional provisions for incidental payment of indemnity under limited circumstances, including, but not limited to, towing, rental, road hazard and emergency road service. Service contract includes motor vehicle extended service contracts and agreements. Service contracts may provide for the service, repair, replacement, or maintenance of property for damage resulting from power surges and accidental damage from handling.    For the purposes of this section, service contract also means a contract or agreement that provides one (1) or more of the following:   The repair or replacement of tires or wheels on a motor vehicle damaged as a result of coming into contact with road hazards;   The removal of dents, dings, or creases on a motor vehicle that can be repaired using the process of paintless dent removal without affecting the existing paint finish and without replacing vehicle body panels, sanding, bonding, or painting;   The repair of chips or cracks in, or the replacement of, motor vehicle windshields as a result of damage caused by road hazards; or   The replacement of a motor vehicle key or key-fob in the event that the key or key-fob becomes inoperable or is lost or stolen.     For purposes of subdivision (b)(2)(A), road hazard means a hazard that is encountered while driving a motor vehicle, which may include potholes, rocks, wood debris, metal parts, glass, plastic, curbs, or composite scraps.       A contract excluded from the definition of a pre-need funeral contract pursuant to  62-5-403(9)(C) is not a contract of insurance within the meaning of this title.   
 Kinds of insurance are defined as follows:   Accident and health insurance means insurance against bodily injury, disablement or death, by accident or accidental means, or the expense of bodily injury, disablement or death, against disablement or expense resulting from sickness, and every insurance pertaining thereto; providing for the mental and emotional welfare of an individual and members of the individual's family by defraying the cost of legal services; or providing aggregate or excess stop-loss coverage in connection with employee welfare benefit plans, managed care organizations participating in commercial plans or the TennCare program, or both, health maintenance organizations, long-term care facilities, physician-hospital organizations as defined in  56-32-102 and provider aggregate or per-patient stop-loss protection insurance coverage as authorized by  56-32-104;   Casualty insurance includes vehicle insurance, disability insurance, and in addition is:  Boiler insurance, which is insurance against any liability and loss or damage to property resulting from accidents to or explosion of boilers, pipes, pressure containers, machinery, or apparatus, and to make inspection of and issue certificates of inspection upon boilers, machinery and apparatus of any kind, whether or not insured;   Burglary and theft insurance, which is insurance against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation or wrongful conversion, disposal or concealment, or from any attempt of burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation or wrongful conversion, disposal or concealment; also insurance against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptances or any other valuable papers or documents, resulting from any cause, except while in the custody or possession of and being transported by any carrier for hire or in the mail;   Collision insurance, which is insurance against loss of or damage to any property of the insured resulting from collision of any other object with the property, but not including collision to or by elevators, or to or by vessels, craft, piers or other instrumentalities of ocean or inland navigation;   Credit insurance, which is insurance against loss or damage resulting from failure of debtors to pay their obligations to the insured;   Elevator insurance, which is insurance against loss or damage to any property of the insured resulting from the ownership, maintenance or use of elevators, except loss or damage by fire, and to make inspection of and issue certificates of inspection on elevators;   Glass insurance, which is insurance against loss of or damage to glass and its appurtenances resulting from any cause;   Liability insurance, which is insurance against legal liability for the death, injury, or disability of any person, or for damage to property; and insurance of medical, hospital, surgical and funeral benefits to persons injured, regardless of legal liability of the insured, when issued as an incidental coverage with or supplemental to liability insurance;   Livestock insurance, which is insurance against loss of or damage to any domesticated or wild animal resulting from any cause;   Personal property floater, which is insurance of individuals, by an all-risk type of policy commonly known as the personal property floater, against any and all kinds of loss of or damage to, or loss of use of, any personal property other than merchandise;   Professional liability insurance, which is insurance against legal liability of the insured, and against loss, damage or expense incident to a claim of legal liability, and including any obligation of the insured to pay medical, hospital, surgical and funeral benefits to injured persons, regardless of legal liability of the insured, arising out of the death or injury of any person, or arising out of injury to the economic interest of any person as the result of negligence in rendering expert, fiduciary or professional service;   Water insurance, which is insurance against loss of or damage to any property caused by the breakage or leakage of sprinklers, water pipes and other apparatus, or by water entering through leaks or openings in buildings, other than flood waters;   Workers' compensation and employer's liability insurance, which is insurance of the obligations accepted by, imposed upon, or assumed by employers under law for death, disablement, or injury of employees; and   Insurance against any other kind of loss, damage, or liability properly the subject of insurance and not within any other kind or kinds of insurance as defined in this section, if the insurance is not disapproved by the commissioner as being contrary to law or public policy;     Credit insurance includes:  Credit accident and health insurance, which means that form of insurance under which a borrower of money or a purchaser of goods is indemnified in connection with a specific loan or credit transaction against loss of time resulting from accident or sickness; and   Credit life insurance, which means that form of insurance under which the life of a borrower of money or a purchaser of goods is insured in connection with a specified loan or credit transaction;     Life insurance means insurance on human lives and insurance appertaining to human lives or connected with human lives. For the purposes of this title, the transacting of life insurance includes the granting of annuities, both with and without a life or mortality contingency or element, and endowment benefits, additional benefits in the event of death by accident or accidental means, additional benefits in the event of the total and permanent disability of the insured, and optional modes of settlement of proceeds;    Property insurance means insurance against loss of or damage to real or personal property of every kind and interest in the real or personal property, from any or all hazards or causes, and against loss consequential upon the loss or damage;   Property insurance includes, but is not limited to:   Insurance against loss or damage to property and loss of use and occupancy by fire, lightning, storm, flood, frost, freezing, snow, hail, ice, weather or climatic conditions, including excess or deficiency of moisture, rain or rising of the waters of the ocean or its tributaries, drought, insects, vermin, forces of nature, smoke, smudge, riot, riot attending strike, strikes, sabotage, civil commotion, vandalism or malicious mischief or caused by wrongful conversion, disposal or concealment of a motor vehicle or aircraft, whether or not handled under a conditional sales contract or subject to chattel mortgage, civil war, rebellion, insurrection, invasion, bombardment, military or usurped power, or by any order of civil authorities meant to prevent the spread of conflagration or epidemic or catastrophe, explosion with no fire ensuing, except explosion by steam boilers or flywheels, but there may be insured explosion of pressure vessels, not including steam boilers of more than fifteen pounds (15 lbs.) pressure, in buildings designed and used solely for residential purposes by not more than four (4) families, explosion of any kind originating outside the insured building, or outside the building containing the property insured, and explosion of pressure vessels that do not contain steam or that are not operated with steam coils or steam jackets;   Insurance against loss or damage by insects or disease to farm crops or products, and loss of rental value of land used in producing the crops or products;   Insurance against accidental injury to sprinklers, pumps, water pipes, elevator tanks and cylinders, steam pipes and radiators, plumbing and its fixtures, ventilating, refrigerating, heating, lighting or cooking apparatus, or their connections, or conduits or containers of any gas, fluid, or other substance, and against loss or damage to property of the insured caused by the breakage or leakage thereof, or by water, hail, rain, sleet or snow seeping or entering through water pipes, leaks or openings in buildings;   Insurance against loss or damage caused by railroad equipment, motor vehicles, airplanes, seaplanes, dirigibles or other aircraft;   Insurance against loss of or damage to vessels, crafts, aircrafts, cars, automobiles and vehicles of every kind, as well as all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidence of debt, valuable papers, bottomry and respondentia interests therein, in respect to, appertaining to or in connection with, any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting the being assembled, packed, crated, baled, compressed or similarly prepared for shipment or during any delays, storage, transshipment incident thereto, including marine builder's risks and all personal property floater risks, and persons or property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage to either, arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of the insurance, but not including life insurance or surety bonds, and precious stones, jewels, jewelry, gold, silver and other precious metals, whether used in business or trade, or otherwise, and whether in course of transportation or otherwise, and bridges, tunnels and other instrumentalities of transportation, and communication, excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage, unless fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion, are the only hazards to be covered, and piers, wharves, docks and ships, excluding the risks of fire, tornado, sprinkler leakage, hail, explosion, earthquake, riot and/or civil commotion, and other aids to navigation and transportation, including dry docks and marine railways, against all risks;   Marine protection and indemnity insurance, which means insurance against, or against legal liability of the insured for, loss, damage or expense arising out of, or incident to, the ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person; and   Vehicle insurance;     Matters set out in subdivision (5)(B) are not deemed to limit the scope of property insurance as defined in subdivision (5)(A), nor shall the fact that certain coverages coming within the scope of property insurance, as defined in subdivision (5)(A), are also defined as part of another kind of insurance be deemed to limit the scope of the definition of property insurance or the right of a property insurer to provide the coverage;     Surety insurance includes:  Credit insurance;   Fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust;   Guaranteeing the performance of contracts, and guaranteeing and executing bonds, undertakings, and contracts of suretyship;   Indemnifying banks, bankers, brokers, financial or moneyed corporations or associations or other persons against loss, resulting from any cause, of bills of exchange, notes, bonds, securities, evidences of debts, deeds, mortgages, warehouse receipts, or other valuable papers, documents, money, precious metals and articles made from precious metals, jewelry, watches, necklaces, bracelets, gems, precious and semiprecious stones, including any loss while the items are being transported in armored motor vehicles, or by messenger, but not including any other risks of transportation or navigation; also against loss or damage to the insured's premises, or to the insured furnishings, fixtures, equipment, safes and vaults in safes, caused by burglary, robbery, theft, vandalism or malicious mischief, or any attempt of burglary, robbery, theft, vandalism or malicious mischief; and   Insurance that guarantees the performance of any debt obligation of a public or private corporation; and      Vehicle insurance means insurance against loss of or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon, or being loaded or unloaded therein or therefrom, and against any loss, expense or liability for loss or damage to persons or property resulting from or incident to ownership, maintenance, or use of the vehicle or aircraft or animal;   Insurance against accidental death or accidental injury to individuals, including the named insured, while in, entering, alighting from, adjusting, repairing, cranking, or caused by being struck by a vehicle, aircraft, or draft or riding animal, if the insurance is issued as part of insurance on the vehicle, aircraft, or draft or riding animal, shall be deemed to be vehicle insurance.     
  The company has the power generally to insure against loss by fire, earthquakes, storms, floods, explosions, except the explosions of the kind contemplated in  56-19-108(5), riots, civil commotions, and any and all other damages on all kinds and species of property.   This section shall apply to every insurance corporation heretofore or hereafter organized under the laws of this state.   All policies of insurance heretofore issued by insurance corporations organized under the laws of this state insuring against loss from any cause included in the authorization in subsection (a) are validated, insofar as the corporation was without specific charter power to insure against those losses.   
 The company has the further right to insure the lives of persons, and engage in the general business of life insurance, and, coupled with that right, the right to grant and sell annuity, or contract loans based on life annuity, with benefit of survivorship, and accept and execute all legal trusts that may be confided to it.  
 The company also has the power to insure:   Against all accidents:  To property in transit; and   To persons traveling or otherwise;     Against disabilities to persons by disease or sickness, or other bodily infirmities;   Against thefts of property;   Ships, steamboats, and other craft; and   Freight and sailors' wages, including all marine risks.   
 The corporation may, at its option, exercise one (1) or more or all of the branches of business in which it is authorized to engage.  
  Associations of individuals, citizens of the United States, whether organized within this state or elsewhere within the United States, formed on the plan known as Lloyd's, whereby each associate underwriter becomes liable for a proportionate part of the whole amount insured by policy, may be authorized to transact insurance other than life in this state, in like manner and upon the same terms and conditions as are required of and imposed upon insurance companies of the United States, or one (1) of the states.   All Lloyd's, whether organized within this state or elsewhere in the United States, not having an actual, paid-up cash capital, shall make the same deposit, and upon the same terms and conditions as is required by  56-2-405 of foreign insurance companies incorporated or associated under the laws of any government or state other than the United States or one (1) of the states.   
   Every insurer authorized to do an insurance, surety or bonding business in this state, called the ceding insurer in this title, may, subject to the limitations of this section, reinsure its risks and policy liabilities in any other insurer, called the assuming insurer in this title, with the effects prescribed in this section; but no prohibition or limitation contained in this section shall invalidate the contract or reinsurance as between the parties.   No credit shall be allowed, as an admitted asset or as a deduction from liability, to any ceding insurer for reinsurance made, ceded, renewed, or otherwise becoming effective after June 12, 1947, unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding insurer under the contract or contracts reinsured without diminution, because of the insolvency of the ceding insurer nor unless, under the contract or contracts of reinsurance, the liability for the reinsurance is assumed by the assuming insurer or insurers as of the same effective date.   The reinsurance agreement may provide that the liquidator or receiver or statutory successor of an insolvent ceding insurer shall give written notice of the pendency of a claim against the insolvent ceding insurer on the policy or bond reinsured, within a reasonable time after the claim is filed in the insolvency proceeding and that during the pendency of the claim, any assuming insurer may investigate the claim and interpose, at its own expense, in the proceeding where the claim is to be adjudicated, any defense or defenses that it may deem available to the ceding company or its liquidator or receiver or statutory successor.   The expense thus incurred by the assuming insurer shall be chargeable, subject to court approval, against the insolvent ceding insurer as part of the expense of liquidation to the extent of a proportionate share of the benefit, which may accrue to the ceding insurer, solely as a result of the defense undertaken by the assuming insurer.     Where two (2) or more assuming insurers are involved in the same claim and a majority in interest elect to interpose defense to the claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement, as though the expense had been incurred by the ceding company.   Notwithstanding anything in this section to the contrary, a risk retention group may not reinsure its risks in another risk retention group unless all of the members of the ceding risk retention group are eligible for membership in the assuming risk retention group.   
  The purpose of  56-2-207, 56-2-208, and 56-2-209 is to protect the interest of the insureds, claimants, ceding insurers, assuming insurers and the public generally. It is the intent of the general assembly to ensure adequate regulation of insurers and reinsurers and adequate protection for those to whom insurers and reinsurers owe obligations. Upon the insolvency of a non-United States insurer or reinsurer that provides security to fund its United States obligations in accordance with  56-2-207, 56-2-208 and 56-2-209, the assets representing the security shall be maintained in the United States and claims shall be filed with and valued by the state insurance commissioner with regulatory oversight, and the assets shall be distributed, in accordance with the insurance laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic United States insurance companies. The general assembly declares that the matters contained in  56-2-207, 56-2-208, and 56-2-209 are fundamental to the business of insurance in accordance with 15 U.S.C.  1011 and 1012.     Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the insurer meets one (1) or more of the requirements set out in subdivisions (b)(2)-(7). However, the commissioner may adopt, by rule pursuant to  56-2-209(g), specific additional requirements relating to or setting forth:   The valuation of assets or reserve credits;   The amount and forms of security supporting reinsurance arrangements described in  56-2-209(g); and   The circumstances pursuant to which credit will be reduced or eliminated.     Credit shall be allowed under subdivision (b)(2), (b)(3), or (b)(4) only in respect to cessions of those kinds or classes of business which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of the United States branch of a non-United States assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit shall be allowed under subdivision (b)(4) or (b)(5) only if the applicable requirements of subdivision (b)(8) have been satisfied.     Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this state.   Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is accredited by the commissioner as a reinsurer in this state. In order to be eligible for accreditation, a reinsurer must:  File with the commissioner evidence of its submission to this state's jurisdiction;   Submit to this state's authority to examine its books and records;   Be licensed to transact insurance or reinsurance in at least one (1) state, or in the case of a United States branch of a non-United States assuming insurer, is entered through and licensed to transact insurance or reinsurance in at least one (1) state;   File annually with the commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and   Demonstrate to the satisfaction of the commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount that is not less than twenty million dollars ($20,000,000) and its accreditation has not been denied by the commissioner within ninety (90) days after submission of its application.     Credit shall be allowed when the reinsurance is ceded to an assuming insurer that is domiciled and licensed in, or in the case of a United States branch of a non-United States assuming insurer, is entered through, a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this title, and the assuming insurer or United States branch of a non-United States assuming insurer:  Maintains a surplus as regards policyholders in an amount of not less than twenty million dollars ($20,000,000); provided, that the requirement in this subdivision (b)(4)(A) does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system; and   Submits to the authority of this state to examine its books and records.      Credit shall be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified United States financial institution, as defined in  56-2-209(d), for the payment of the valid claims of its United States ceding insurers, their assigns and successors in interest. To enable the commissioner to determine the sufficiency of the trust fund, the assuming insurer shall report annually to the commissioner information substantially the same as that required to be reported on the National Association of Insurance Commissioners (NAIC) annual statement form by licensed insurers. The assuming insurer shall submit to an examination of its books and records by the commissioner and bear the expense of such examination.   Credit for reinsurance shall not be granted under this subdivision (b)(5) unless the form of the trust and any amendments to the trust have been approved by:   The commissioner of the state where the trust is domiciled; or   The commissioner of another state that, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust.     The following requirements apply to the following categories of assuming insurer:   The trust fund for a single assuming insurer shall consist of funds in trust in an amount not less than the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than twenty million dollars ($20,000,000), except as provided in subdivision (b)(5)(C)(ii);   At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three (3) full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of United States ceding insurers, policyholders, and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and shall consider all material risk factors, including, when applicable, the lines of business involved, the stability of the incurred loss estimates and the effect of surplus requirements on the assuming insurer's liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than thirty percent (30%) of the assuming insurer's liabilities attributable to reinsurance ceded by the United States ceding insurers covered by the trust;   (a)  In the case of a group including incorporated and individual unincorporated underwriters:  (iii)  (a)  In the case of a group including incorporated and individual unincorporated underwriters:  For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after January 1, 1993, the trust shall consist of a trusteed account in an amount not less than the respective underwriters' several liabilities attributable to business ceded by United States domiciled ceding insurers to any underwriter of the group;   For reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed on or after that date, notwithstanding  56-2-207, 56-2-208, and 56-2-209, the trust shall consist of a trusteed account in an amount not less than the respective underwriters' several insurance and reinsurance liabilities attributable to business written in the United States; and   In addition to the trusts set out in this subdivision (b)(5)(C)(iii)(a )(3 ), the group shall maintain in trust a trusteed surplus of which one hundred million dollars ($100,000,000) shall be held jointly for the benefit of United States domiciled ceding insurers of any member of the group for all years of account; and     The incorporated members of the group shall not be engaged in any business other than underwriting as a member of the group and shall be subject to the same level of regulation and solvency control by the group's domiciliary regulator as are the unincorporated members; and   Within ninety (90) days after its financial statements are due to be filed with the group's domiciliary regulator, the group shall provide to the commissioner an annual certification by the group's domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the group; and     In the case of a group of incorporated insurers under common administration, the group shall:  Have continuously transacted an insurance business outside the United States for at least three (3) years immediately prior to making application for accreditation;   Maintain aggregate policyholders surplus of ten billion dollars ($10,000,000,000);   Maintain a trust fund in an amount not less than the group's several liabilities attributable to business ceded by United States domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group;   Maintain a joint trusteed surplus of which one hundred million dollars ($100,000,000) shall be held jointly for the benefit of United States domiciled ceding insurers of any member of the group as additional security for the liabilities; and   Within ninety (90) days after its financial statements are due to be filed with the group's domiciliary regulator, make available to the commissioner an annual certification of each underwriter member's solvency by the member's domiciliary regulator and financial statements of each underwriter member of the group prepared by its independent public accountant.       The form of the trust and any trust amendments also shall be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument shall provide that contested claims shall be valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust shall vest legal title to its assets in its trustees for the benefit of the assuming insurer's United States ceding insurers, their assigns and successors in interest. The trust and the assuming insurer shall be subject to examination as determined by the commissioner.   The trust shall remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. No later than February 28 of each year, the trustee of the trust shall report to the commissioner in writing the balance of the trust and list the trust's investments at the preceding year end and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the following December 31.        Credit shall be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the commissioner as a reinsurer in this state and secures its obligations in accordance with the requirements of this subdivision (b)(6).   Any information submitted by an assuming insurer who is applying for certification as a reinsurer pursuant to subdivision (b)(6)(A)(i) and any information submitted to the commissioner pursuant to this section or any rule promulgated under this section by an assuming insurer who has been certified as a reinsurer pursuant to subdivision (b)(6)(A)(i) is confidential by law, is not open for inspection by members of the public under  10-7-503 or  56-1-602, is not subject to subpoena, and is not subject to discovery or admissible in evidence in any private civil action. However, the commissioner may use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties and may share the documents, materials, or other information in accordance with the procedures set forth in  56-11-108(c)-(f).     In order to be eligible for certification, the assuming insurer shall meet the following requirements:   The assuming insurer must be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the commissioner pursuant to subdivision (b)(6)(D);   The assuming insurer must maintain a minimum capital and surplus, or its equivalent, in an amount to be determined by the commissioner pursuant to rules promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5;   The assuming insurer must maintain financial strength ratings from two (2) or more rating agencies deemed acceptable by the commissioner pursuant to rules promulgated in accordance with the Uniform Administrative Procedures Act;   The assuming insurer must agree to submit to the jurisdiction of this state, appoint the commissioner as its agent for service of process in this state, and agree to provide security for one hundred percent (100%) of the assuming insurer's liabilities attributable to reinsurance ceded by United States ceding insurers if it resists enforcement of a final United States judgment;   The assuming insurer must agree to meet applicable information filing requirements as determined by the commissioner, both with respect to an initial application for certification and on an ongoing basis; and   The assuming insurer must satisfy any other requirements for certification deemed relevant by the commissioner.     An association including incorporated and individual unincorporated underwriters may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying requirements of subdivision (b)(6)(B):   The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents (net of liabilities) of the association and its members, which shall include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the commissioner to provide adequate protection;   The incorporated members of the association shall not be engaged in any business other than the underwriting as a member of the association and shall be subject to the same level of regulation and solvency control by the association's domiciliary regulator as are the unincorporated members; and   Within ninety (90) days after its financial statements are due to be filed with the association's domiciliary regulator, the association shall provide to the commissioner an annual certification by the association's domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association.       The commissioner shall create and publish a list of qualified jurisdictions, under which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the commissioner as a certified reinsurer.   In order to determine whether the domiciliary jurisdiction of a non-United States assuming insurer is eligible to be recognized as a qualified jurisdiction, the commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and the extent of reciprocal recognition afforded by the non-United States jurisdiction to reinsurers licensed and domiciled in the United States. A qualified jurisdiction must agree to share information and cooperate with the commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the commissioner has determined that the jurisdiction does not adequately and promptly enforce final United States judgments and arbitration awards. Additional factors may be considered at the commissioner's discretion.   A list of qualified jurisdictions shall be published through the NAIC committee process. The commissioner shall consider this list in determining qualified jurisdictions. If the commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the commissioner shall provide thoroughly documented justification in accordance with the criteria established in rules promulgated in accordance with the Uniform Administrative Procedures Act.   United States jurisdictions that meet the requirement for accreditation under the NAIC financial standards and accreditation program shall be recognized as qualified jurisdictions.   If a certified reinsurer's domiciliary jurisdiction ceases to be a qualified jurisdiction, the commissioner has the discretion to suspend the reinsurer's certification indefinitely, in lieu of revocation.     The commissioner shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the commissioner pursuant to rules promulgated in accordance with the Uniform Administrative Procedures Act. The commissioner shall publish a list of all certified reinsurers and their ratings.     A certified reinsurer shall secure obligations assumed from the United States ceding insurers under this subdivision (b)(6) at a level consistent with its ratings, as specified in rules promulgated by the commissioner in accordance with the Uniform Administrative Procedures Act.   In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the commissioner and consistent with  56-2-209, or in a multi-beneficiary trust in accordance with subdivision (b)(5), except as otherwise provided in this subdivision (b)(6).   If a certified reinsurer maintains a trust to fully secure its obligations subject to subdivision (b)(5), and chooses to secure its obligations incurred as a certified reinsurer in the form of a multi-beneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subdivision (b)(6) or comparable laws of other United States jurisdictions and for its obligations subject to subdivision (b)(5). It shall be a condition to grant the certification under this subdivision (b)(6) that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the commissioner with principal regulatory oversight of each such trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account.   The minimum trusteed surplus requirements provided in subdivision (b)(5) are not applicable to a multi-beneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subdivision (b)(6), except that such trust shall maintain a minimum trusteed surplus of ten million dollars ($10,000,000).   With respect to obligations incurred by a certified reinsurer under this subdivision (b)(6), if the security is insufficient, the commissioner shall reduce the allowable credit by an amount proportionate to the deficiency, and has the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurer's obligations will not be paid in full when due.   (a)  For purposes of this subdivision (b)(6), a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure one hundred percent (100%) of its obligations.  (vi)  (a)  For purposes of this subdivision (b)(6), a certified reinsurer whose certification has been terminated for any reason shall be treated as a certified reinsurer required to secure one hundred percent (100%) of its obligations.   As used in this subdivision (b)(6), terminated refers to revocation, suspension, voluntary surrender, or inactive status.   If the commissioner continues to assign a higher rating as permitted by other provisions of this section, this subdivision (b)(6)(F)(vi) does not apply to a certified reinsurer in active status or to a reinsurer whose certification has been suspended.       If an applicant for certification has been certified as a reinsurer in an NAIC accredited jurisdiction, the commissioner has the discretion to defer to that jurisdiction's certification, and has the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer shall be considered to be a certified reinsurer in this state.   A certified reinsurer that ceases to assume a new business in this state may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this subdivision (b)(6), and the commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business.     Credits shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of any of subdivisions (b)(2)-(6), but only with respect to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law, rule, or regulation of that jurisdiction.    If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the credit permitted by subdivisions (b)(4) and (5) shall not be allowed unless the assuming insurer agrees in the reinsurance agreements:   That, in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, shall comply with all requirements necessary to give the court jurisdiction, and shall abide by the final judgment of the court or of any appellate court in the event of an appeal; and   To designate the commissioner or a designated attorney to receive service of process in any action, suit or proceeding instituted by or on behalf of the ceding company.     This subdivision (b)(8) shall not prohibit or otherwise prevent the parties to a reinsurance agreement from arbitrating disputes, if such an obligation is created in the agreement between the parties.     If the assuming insurer does not meet the requirements of subdivision (b)(2), (b)(3), or (b)(4), the credit permitted by subdivision (b)(5) or (b)(6) shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions:  Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by subdivision (b)(5)(C), or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund;   The assets shall be distributed by and claims shall be filed with and valued by the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies;   If the commissioner with regulatory oversight determines that assets of the trust fund or any part thereof are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part thereof shall be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement; and   The grantor shall waive any right otherwise available to it under United States law that is inconsistent with this subdivision (b)(9).      If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the commissioner may suspend or revoke the reinsurer's accreditation or certification.   The commissioner must give the reinsurer notice and an opportunity for hearing in accordance with the Uniform Administrative Procedures Act. The suspension or revocation may not take effect until after the commissioner's order or hearing, unless:   The reinsurer waives its right to hearing;   The commissioner's order is based on regulatory action by the reinsurer's domiciliary jurisdiction or the voluntary surrender or termination of the reinsurer's eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under subdivision (b)(6)(F); or   The commissioner finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the commissioner's action.     While a reinsurer's accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit, except to the extent that the reinsurer's obligations under the contract are secured in accordance with  56-2-209. If a reinsurer's accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation, except to the extent that the reinsurer's obligations under the contract are secured in accordance with subdivision (b)(6)(E) or  56-2-209.     Concentration Risk.  A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the commissioner within thirty (30) days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds fifty percent (50%) of the domestic ceding insurer's last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, are likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.   A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the commissioner within thirty (30) days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than twenty percent (20%) of the ceding insurer's gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated insurers, is likely to exceed this limit. The notification shall demonstrate that the exposure is safely managed by the domestic ceding insurer.       
   An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of  56-2-208 shall be allowed in an amount not exceeding the liabilities carried by the ceding insurer. However, the commissioner may adopt by rule pursuant to subsection (g) specific additional requirements relating to or setting forth:  The valuation of assets or reserve credits;   The amount and forms of security supporting reinsurance arrangements described in subsection (g); and   The circumstances pursuant to which credit will be reduced or eliminated.     The reduction shall be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations under the contract, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer, or, in the case of a trust, held in a qualified United States financial institution. This security may be in the form of:  Cash;   Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets;   Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified United States financial institution no later than December 31 of the year for which filing is being made, and in the possession of the ceding company on or before the filing date of its annual statement; or   Any other form of security acceptable to the commissioner.       Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance, or confirmation, shall, notwithstanding the issuing or confirming institution's subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification or amendment, whichever first occurs.   For purposes of subdivision (a)(3), a qualified United States financial institution means an institution that:  Is organized or  licensed, in the case of a United States office of a foreign banking organization, under the laws of the United States or any state in the United States;   Is regulated, supervised and examined by United States federal or state authorities having regulatory authority over banks and trust companies; and   Has been determined by either the commissioner, or the Securities Valuation Office of the National Association of Insurance Commissioners, to meet the standards of financial condition and standing considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner.     For purposes of those provisions of this chapter specifying those institutions that are eligible to act as a fiduciary of a trust, qualified United States financial institution means an institution that:  Is organized or  licensed, in the case of a United States branch or agency office of a foreign banking organization, under the laws of the United States or any state and has been granted authority to operate with fiduciary powers; and   Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies.     The commissioner may adopt rules and regulations implementing this section and  56-2-208. The rules and regulations shall be promulgated pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   This section and  56-2-208 apply to all cessions after July 1, 1993, under reinsurance agreements that have had an inception, anniversary, or renewal date not less than six (6) months after July 1, 1993.    The commissioner is further authorized to promulgate rules applicable to reinsurance arrangements described in this subdivision (g)(1) relating to:  Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits;   Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period;   Variable annuities with guaranteed death or living benefits;   Long-term care insurance policies; or   Other life and health insurance and annuity products as to which the commissioner adopts regulatory requirements with respect to credit for reinsurance.     A rule promulgated pursuant to subdivision (g)(1)(A) or (g)(1)(B) may apply to any treaty containing:  Policies issued on or after January 1, 2015; or   Policies issued prior to January 1, 2015, if risk pertaining to such pre-2015 policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015.     A rule promulgated pursuant to this subsection (g) may require the ceding insurer, in calculating the amounts or forms of security required to be held under rules promulgated under this authority, to use the Valuation Manual adopted by the National Association of Insurance Commissioners (NAIC) under Section 11B(1) of the NAIC Standard Valuation Law, including all amendments adopted by the NAIC and in effect on the date as of which the calculation is made, to the extent applicable.   A rule promulgated pursuant to this subsection (g) does not apply to cessions to an assuming insurer that:  Is certified in this state or certified in a minimum of five (5) other states; or   Maintains at least two hundred and fifty million dollars ($250,000,000) in capital and surplus, determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments to such manual that are adopted by the NAIC, excluding the impact of any permitted or prescribed practices; and is:   Licensed in at least twenty-six (26) states; or   Licensed in at least ten (10) states, and licensed or accredited in a total of at least thirty-five (35) states.       The authority to promulgate rules pursuant to this subsection (g) does not limit the commissioner's authority to adopt rules pursuant to subsection (e). All rules under this subsection (g) must be promulgated in accordance with the Uniform Administrative Procedures Act.     
  As used in this section, limited credit life and credit accident and health reinsurer means a domestic credit life and credit accident and health reinsurer that:  Reinsures only credit life insurance or credit accident and health insurance as defined in  56-2-201, or both, in the manner provided for in  56-2-114(b);   Has been authorized by the commissioner to do so in Tennessee and is not so authorized in any other state; and   Secures all of its reinsurance reserve liabilities that have been assumed under a reinsurance agreement that has been approved by the commissioner with funds withheld or maintained in a trust fund that complies with  56-2-207, 56-2-208 and 56-2-209 and in an amount that is not less than one hundred ten percent (110%) of the amount of the liabilities assumed.      The responsibilities and obligations of a limited credit life and credit accident and health reinsurer under this title shall be modified as set out in this section. A limited credit life and credit accident and health reinsurer shall demonstrate its compliance with the requirements in subsection (a) in the annual statement filed with the commissioner for the preceding year and shall maintain assets to secure the liabilities in the percentage relationship at all times. In determining compliance with this requirement, the commissioner shall value securities in the manner prescribed in  56-3-113 and 56-3-114, and shall take into account only the securities that constitute admitted assets under chapter 3, part 3 of this title, and  56-1-405.   A company may not be a limited credit life and credit accident and health reinsurer during any period in which it is an affiliate of an insurer. In determining whether a company is an affiliate, tests provided for in  56-11-101 shall be applied to determine a company's status.     Notwithstanding any contrary provision in this title, a limited credit life and credit accident and health reinsurer shall be excused from:  Filing personal financial statements to accompany insurance holding company forms under  56-11-105;   Filing any audited financial statements pursuant to rules authorized by  56-1-501(h);   Filing any risk-based capital reports under chapter 46 of this title;   Filing any management discussion and analysis;   Filing with respect to material transactions under  56-10-301  56-10-303;   Filing any actuarial certification;   Any filing of its annual statement or quarterly statement with the National Association of Insurance Commissioners; and   Filing with respect to extraordinary dividends under  56-11-106(b).     The commissioner is excused from any obligation to perform regular examination of a limited credit life and credit accident and health reinsurer under  56-1-408, but shall retain the power to make an examination of any accounts, records, files, documents, and transactions pertaining to insurance of the limited credit life and credit disability reinsurer whenever the commissioner deems it prudent to do so under  56-1-409.   A limited credit life and credit accident and health reinsurer shall file with the commissioner copies of all reinsurance agreements, including amendments to the agreements, to which the reinsurer is a party. The agreement or amendment shall not be effective until and unless the agreement or amendment is approved by the commissioner; provided, however, that the agreement or amendment shall be deemed approved if the commissioner does not disapprove the agreement or amendment in writing within thirty (30) days after the reinsurer files a copy of the agreement or amendment with the commissioner.   The commissioner may approve a merger in which a limited credit life and credit accident insurance company is a constituent party without holding the otherwise required hearing on a merger of a limited credit life and credit accident and health reinsurer with another entity, unless the requirement of a hearing under  56-10-104(b) applies to another party to the merger.   The commissioner may permit an applicant to seek a certificate of authority pursuant to a simplified and abbreviated application form under which the company seeking authority from the commissioner to engage in the business of being a limited credit life and credit accident and health reinsurer may apply for a certificate of authority to engage in the business.   This section shall apply to all reports and documents required to be filed after December 31, 2000.   
  The commissioner is authorized to promulgate rules and regulations not in conflict with this section and  56-2-101, 56-2-103, 56-2-113  56-2-115, and 56-2-201 for the purpose of implementing those sections so as to regulate the writing of the various kinds and types of insurance provided for in those sections.   The commissioner is authorized to promulgate rules and regulations to allow for the filing of documents with the commissioner pursuant to this title through a designated filing depository.   Regulations promulgated pursuant to this section shall have the same force and effect of law.   
 Whenever the commissioner determines that a company, corporation, association, person, or entity of whatever nature is violating or is about to violate  56-2-105, the commissioner may issue a notice of hearing and charges requiring the company, corporation, association, person, or entity of whatever nature to show cause why an order should not issue requiring the person or entity to cease and desist the unauthorized business of insurance in this state.  
 Any hearing conducted under this part shall be conducted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 If the commissioner finds that public health, safety, or welfare imperatively requires emergency action, and incorporates a finding to that effect in an order, a summary cease and desist order may be issued pending proceedings for other actions under this part. These proceedings shall be promptly instituted and determined.  
  If, after providing notice consistent with the process established by  4-5-320(c) and providing the opportunity for a contested case hearing held in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3, the commissioner finds that any insurer, person, or entity required to be licensed, permitted, or authorized by the division of insurance has violated any statute, rule or order, the commissioner may, at the commissioner's discretion, order:  The insurer, person, or entity to cease and desist from engaging in the act or practice giving rise to the violation;   Payment of a monetary penalty of not more than one thousand dollars ($1,000) for each violation, but not to exceed an aggregate penalty of one hundred thousand dollars ($100,000), unless the insurer, person, or entity knowingly violates a statute, rule or order, in which case the penalty shall not be more than twenty-five thousand dollars ($25,000) for each violation, not to exceed an aggregate penalty of two hundred fifty thousand dollars ($250,000). This subdivision (a)(2) shall not apply where a statute or rule specifically provides for other civil penalties for the violation. For purposes of this subdivision (a)(2), each day of continued violation shall constitute a separate violation; and   The suspension or revocation of the insurers, persons, or entity's license.     In determining the amount of penalty to assess under this section, or in determining whether the violation was a knowing violation for the purpose of subdivision (a)(2), the commissioner shall consider any evidence relative to the following criteria:  Whether the insurer, person or entity could reasonably have interpreted its actions to be in compliance with the obligations required by a statute, rule or order;   Whether the amount imposed will be a substantial economic deterrent to the violator;   Whether the amount imposed would put the violator in a hazardous financial condition;   The circumstances leading to the violation;   The severity of the violation and the risk of harm to the public;   The economic benefits gained by the violator as a result of noncompliance;   The interest of the public; and   The insurer's, person's, or entity's efforts to cure the violation.     Notwithstanding the limitations set forth in subdivision (a)(2), no aggregate penalty limits shall apply to the following:  Failure to file audited statements required pursuant to  56-1-501(h) and rules promulgated under  56-1-501(h);   Failure to file quarterly financial statements as required by statute or regulation;   Failure to file actuarial opinions pursuant to  56-1-501(d) and rules promulgated under  56-1-501(d);   Failure to file annual reports pursuant to  56-19-119, 56-28-111, 56-29-113, 56-30-117, 56-31-116, 56-43-108, and 56-44-104;   Failure to file a risk-based capital report pursuant to  56-46-103; and   Violations of orders issued after a contested case hearing held in accordance with the Uniform Administrative Procedures and pursuant to subdivision (a)(1).     This section does not apply to individual or business entity insurance producers licensed pursuant to chapter 6, part 1 of this title.    Notwithstanding any law to the contrary, civil penalties received under the authority of this section shall be utilized by the department, at the discretion of the commissioner, to:  Defray its expenses related to the liquidation of insurance companies as provided by chapter 9 of this title;   Promote consumer awareness of insurance; or   Provide training or educational opportunities to employees of the division of insurance.     Any subaccount currently used by the department for training and education may also be used for the promotion of consumer awareness.      If, at any time following the certification of the vehicle insurance verification program under  55-12-212, the commissioner of commerce and insurance finds that an automobile liability insurer, as defined in  55-12-203, has intentionally violated  56-7-1118, then the commissioner may, after providing the opportunity for a contested case hearing held in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, assess a civil penalty against the automobile liability insurer of up to two hundred fifty dollars ($250) for each day the insurer fails to comply with  56-7-1118. The commissioner may excuse or reduce the civil penalty under this subdivision (f)(1) for good cause.   Until the certification of the program occurs, the commissioner shall not assess any civil penalty or convene a contested case hearing for an alleged violation of  56-7-1118 by an automobile liability insurer.     
  Any insurance company or other insurance entity that is financially owned or financially controlled by any alien or foreign government outside the continental limits of the United States or the territories of the United States is prohibited from doing any kind of insurance business in this state.   For the purposes of this section and  56-2-402  56-2-404, alien or foreign government means any foreign government or any state, province, municipality, or political subdivision of any foreign government, but does not apply to any insurance company organized under the laws of a foreign nation that is financially owned or financially controlled by the private citizens or private business interests of the foreign nation.   
 The commissioner is forbidden to grant a license to any insurance company or other insurance entity that is financially owned or financially controlled by any alien or foreign government outside the continental limits of the United States or the territories of the United States, or to authorize the company or entity to transact any kind of insurance business in this state.  
 Any insurance company or other insurance entity that is financially owned or financially controlled by any alien or foreign government outside the continental limits of the United States or the territories of the United States, or any representative or agent of the company or entity, that violates  56-2-401, 56-2-402, this section and  56-2-404, commits a Class C misdemeanor.  
 Any violation of  56-2-401  56-2-403 and this section by an insurance company or other insurance entity that is financially owned or financially controlled by any alien or foreign government outside the continental limits of the United States or the territories of the United States, or by any representative or agent of the company or entity, is declared to be a public nuisance, and the commissioner is authorized and empowered to enjoin the nuisance by injunctive proceedings in the chancery court in like manner as is provided by the general statutes pertaining to enjoining nuisances.  
  Any foreign company, if incorporated or associated under the laws of any government or state other than the United States, shall not be admitted until, besides complying with the conditions of  56-2-101  56-2-103, 56-2-113  56-2-115, 56-2-201 and 56-2-301, it has made a deposit with the state treasurer, or with the financial officer of some other state of the United States, a sum of not less than two hundred thousand dollars ($200,000).   The deposit must be in exclusive trust for the benefit and security of all the company's policyholders and creditors in the United States, and may be made in bonds of this state or of the United States, or of some state in the United States, or other good securities satisfactory to the commissioner.   The deposit shall be in lieu of any other deposit required of life insurance companies incorporated under the laws of any government or state other than the United States.   
  Any admitted company of a foreign country may appoint trustees who are citizens of the United States, and approved by the commissioner, to hold funds in trust for the benefit of its policyholders and creditors in the United States.   These trustees shall be named by the directors of the company, and a certified copy of the record of the appointment of the trustees and of the deed of trust shall be filed in the office of the commissioner, who may examine the trustees and the assets in trust, and all books and papers relating to the trust, in the same manner that the commissioner may examine the officers, agents, assets, and affairs of insurance companies.   The funds held by the trustees, so far as the funds are in securities, money, or credits, admissible as sound assets in the financial accounts of insurance companies, shall, together with its deposits made in accordance with  56-2-405, constitute the assets of the company as regards its policyholders and creditors in the United States.   
 The authority of a foreign insurance company may be revoked:   If it violates or neglects to comply with any law obligatory upon it;   Whenever, in the opinion of the commissioner, its condition is unsound, or its assets above its liabilities exclusive of capital and inclusive of unearned premiums, as provided in  56-1-402  56-1-405 [see the Compiler's Notes], are less than the amount of its original capital or required unimpaired funds; or   If any foreign company licensed to transact business in this state reinsures or accepts reinsurance on property located in this state for any company not authorized to transact the business of insurance in this state; provided, that  56-1-102 does not apply to foreign marine policies.   
 All licenses authorizing foreign insurance companies to transact their business in the state shall terminate or expire on July 1 next succeeding the date of their issuance, unless sooner revoked by the commissioner.  
 Renewal of a license to transact the business of fire, fire marine, or marine insurance in this state, for companies or associations not incorporated under the laws of this state, shall only be issued after the secretary or manager of the company or association desiring to renew the license to do business in this state has first made oath that no policy or contract of insurance covering property located in the state has been issued, written, or placed during the twelve (12) months preceding, except by resident local agents of the company or association in the state, duly commissioned, and until and after the company or association has complied with all other laws of this state in respect to the admission of companies of other states and foreign countries.  
  If any fire, fire marine, or marine insurance company or association violates or fails to observe and comply with any or all of the provisions of  56-2-409, this section and  56-2-411 applicable to it, it immediately shall become the duty of the commissioner to investigate the company's or association's conduct, and if the commissioner is satisfied as to the guilt of the insurance company or association, it shall be the commissioner's duty to revoke the license of the company or association to transact business in this state, and the revocation shall continue for at least one (1) year from the date of revocation.   No insurance company or association whose authority to transact business in this state has been so revoked shall be again authorized or permitted to transact business until it has filed in the office of the commissioner a certificate, signed by its president or other chief officer, to the effect that the terms and obligations of  56-2-409, this section and  56-2-411 are accepted by it as a part of the condition of its right and authority to transact business in this state.   
  Under  56-2-409, 56-2-410, and this section are also included citizens of this state procuring and holding insurance contracts or policies on the types of coverage listed in  56-2-201 upon property situated or located in this state in companies not authorized to transact business in this state.   The procuring or accepting policies or contracts of the insurance from unauthorized companies or associations makes every citizen of this state, including industrial insureds as defined in  56-2-105(7), holding the contracts or policies liable for taxes, the same as if procured through a surplus lines agent. The taxes shall be paid at the same time, in the same manner, and at the same rate as the tax levied on surplus lines insurance in  56-14-106 and 56-14-113.   
  Whenever the laws of any other state of the United States require of insurance companies incorporated by or organized under the laws of this state, or the agents of the companies, any deposit of securities in such state for the protection of policyholders, or otherwise, greater than the amount required for similar purposes from similar companies of other states by the then existing laws of this state, then, in every such case, all companies of the states establishing an agency or agencies in this state shall be required to make the same deposit for a like purpose with the state treasurer and to pay into the state treasury the taxes, fines, penalties, license fees, or otherwise, an amount equal to the amount of the charges and payments imposed by law of such state upon companies of this state, and their agents.   Any commission received by a Tennessee resident agent may be shared with another resident agent or with a licensed nonresident insurance agent or broker; provided, that if the nonresident insurance agent or broker resides in, or is a licensed agent or broker in, a state that requires the retention of a stipulated percentage of the commission on risks placed in the state by nonresident agents or brokers, then and in that event the Tennessee resident agent shall require the same percentage of the commission as would be required if a Tennessee agent or broker placed similar insurance in the state of the residence of the nonresident insurance agent or broker; and provided further, that if the nonresident insurance agent or broker resides in a state, county or municipality that by statute or ordinance prohibits the division of commissions on insurance covering property or risks in the city, county or state of the nonresident agent or broker, then and in that event it shall be unlawful for the Tennessee resident agent or broker to pay the nonresident agent or broker any share or portion of the commission on insurance on property or risks in this state.   
  Every insurance company incorporated under the laws of this state shall, by a duly executed instrument, constitute and appoint the commissioner, the commissioner's deputy and their successors in office its true and lawful attorneys, upon whom all lawful processes in any action or legal proceeding against it may be served and who may acknowledge any such lawful processes.   Every insurance company incorporated under the laws of this state shall agree that any lawful process against it that may be served upon its attorneys or upon which they may acknowledge service, shall be of the same force and validity as if served on the company, and that the authority thereof shall continue in force irrevocably as long as any liability of the company remains outstanding.   Any process issued by any court of record in this state and acknowledged by or served upon the commissioner or the commissioner's deputy by the proper officer of the county in which the office of commissioner or deputy is located shall be deemed a sufficient process on the company. It is the duty of the commissioner and deputy, immediately after service of process, to forward by registered return receipt mail to the company an exact copy of the process.   A record of each service of process shall be kept in the office of the commissioner, showing the date of service, the name of the company on whose behalf service was acknowledged, the name of the plaintiff or complainant, the date the defendant is required to answer, the court issuing the process, and the county in which the suit is brought.   The power of attorney shall be filed and kept in the office of the commissioner.   
 As used in this section and  56-2-503 and 56-2-504:   Alien insurance company means an insurance company organized under the laws of any country other than the United States or territory or insular possession of the United States or of the District of Columbia;   Doing business in this state by any foreign or alien insurance company means the doing in this state by the company of any act whatsoever, whether interstate or intrastate in nature, including the soliciting, making, or delivering of insurance contracts in this state, by an agent, mail or otherwise;   Foreign insurance company means an insurance company organized under the laws of any state of the United States, other than this state, or under the law of any territory or insular possession of the United States or the District of Columbia; and   Insurance company means an insurance or surety company, including mutual companies, and includes a corporation, company, partnership, association, social, fraternal or otherwise, order, individual or aggregation of individuals engaging in or proposing or attempting to engage in any kind of insurance or surety business, including the exchange of reciprocal or interinsurance contracts between individuals, partnerships and corporations.   
  Any foreign or alien insurance company, before doing business in this state, as defined in  56-2-502, shall appoint the commissioner its true and lawful attorney as required by  56-2-103(a)(3).   If the company does business in this state, as defined in  56-2-502, without having appointed the commissioner its true and lawful attorney, as required in this part, it shall, by doing business in this state, be deemed to have thereby appointed the commissioner its true and lawful attorney for the purposes set forth in this part.   The requirements of this section shall be in addition to, and not in derogation of, any other law.   
  When the commissioner has been appointed or constituted attorney for a foreign or alien insurance company, either by power of attorney or by failure to comply with  56-2-503, any lawful process against or notice to the company in any action or proceeding against it from any cause of action arising in the state may be served on the commissioner, and filing the power of attorney or doing business in the state shall be a signification of its agreement that the process or notice served shall be of the same legal force and validity as if served upon it in the state. In case of any action or proceeding instituted by or on behalf of the commissioner against or with reference to the company, process may be lawfully served on the secretary of state.   Service of process shall be made by leaving two (2) copies of the process or notice, together with a fee of fifteen dollars ($15.00), in the office of the commissioner, together with an affidavit giving the last known address of the defendant, and the service shall be sufficient if notice of the service, and a copy of the process or notice are forthwith sent by registered mail, with return receipt requested, or certified mail by the commissioner to the company at the last known address. An affidavit of the commissioner showing compliance with this subsection (b) shall be filed with the paper in the action or proceeding.   The court in which the action or proceeding is pending may order continuances necessary to afford the defendant reasonable opportunity to defend the action. No judgment shall be entered against the defendant under this section until at least thirty (30) days have elapsed after process or notice has been served on the commissioner.   The references in this section to the commissioner shall, in the case of any action or proceeding instituted by or on behalf of the commissioner, be deemed to refer to the secretary of state, and the duties and responsibilities imposed by this section shall, in such cases, be performed and discharged by the secretary of state.   
  Any act of entering into a contract of insurance as an insurer or transacting insurance business in this state, as set forth in  56-2-107, by an unauthorized foreign or alien company, is equivalent to and constitutes an appointment by the company of the secretary of state to be its true and lawful attorney upon whom may be served all lawful process in any action or proceeding against it:  Arising out of a violation of  56-2-105; or   To collect the taxes imposed in chapter 4 of this title.     The performance of any of the acts enumerated in  56-2-107 is signification of the company's agreement that any such process against it that is so served is of the same legal force and validity as if served upon the company.   
  Service of process shall be made by delivering and leaving with the secretary of state two (2) copies of the process.   The secretary of state shall forthwith mail by registered mail one (1) of the copies of the process to the company at its last known principal place of business, and shall keep a record of all process so served upon the secretary of state.   The service shall be sufficient service upon the company; provided, that notice of the service and a copy of the process are, within ten (10) days thereafter, sent by registered mail by or on behalf of the commissioner to the company at its last known principal place of business; and provided, further, that the receipt by the secretary of state and an affidavit of compliance with this section by or on behalf of the commissioner are filed with the clerk of the court in which the action or proceeding is pending on or before the return date of the process or within any further time that the court allows.   
  The court in any action or proceeding in which service is made in the manner provided in  56-2-506 may, in its discretion, order a postponement necessary to afford the company reasonable opportunity to defend the action or proceeding.   Nothing in this section is to be construed to prevent an unauthorized foreign or alien company from filing a motion to quash a writ or to set aside service of the motion made in the manner provided in  56-2-506 on the ground that the unauthorized company has not done any of the acts referred to in  56-2-107.   
 No judgment by default shall be entered in the action or proceeding until the expiration of thirty (30) days from the date of the filing of the affidavit of compliance.  
 Nothing in  56-2-505  56-2-508 or this section shall limit or affect the right to serve any process, notice or demand required or permitted by law to be served upon any company in any other manner now or hereafter permitted by law.  
 This part shall be known and may be cited as the Unauthorized Insurers Process Act.  
  Any of the following acts in this state, effected by mail or otherwise, by an unauthorized foreign or alien insurer, is equivalent to and shall constitute an appointment by the insurer of the commissioner and the commissioner's successor or successors in office, to be its true and lawful attorney, upon whom may be served all lawful process in any action, suit, or proceeding instituted by or on behalf of an insured or beneficiary arising out of the contract of insurance:  The issuance or delivery of contracts of insurance to residents of this state or to corporations authorized to do business in this state;   The solicitation of applications for the contracts;   The collection of premiums, membership fees, assessments or other considerations for the contracts; or   Any other transaction of insurance business.     Any of the acts mentioned in subdivsions (a)(1)-(4) shall be signification of the insurer's agreement that the service of process is of the same legal force and validity as personal service of process in this state upon the insurer.   
  The service of process shall be made by delivering to and leaving with the commissioner or some person in apparent charge of the commissioner's office two (2) copies of the service of process and the payment to the commissioner or other person of the fees prescribed by law.   The commissioner shall forthwith mail by registered mail one (1) of the copies of the process to the defendant at its last known principal place of business, and shall keep a record of all process so served upon the commissioner.   The service of process is sufficient; provided, that notice of the service and a copy of the process are sent within ten (10) days thereafter by registered mail by plaintiff or plaintiff's attorney to the defendant at its last known principal place of business, and the defendant's receipt, or receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff or plaintiff's attorney showing a compliance with this section are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear, or within a further time that the court allows.   
 Service of process in the action, suit or proceeding shall, in addition to the manner provided in  56-2-603, be valid if:   Served upon any person within the state who, in this state on behalf of the insurer is soliciting insurance, is making, issuing or delivering any contract of insurance, or collecting or receiving any premium, membership fee, assessment or other consideration for insurance;   A copy of the process is sent within ten (10) days thereafter by registered mail by the plaintiff or plaintiff's attorney to the defendant at the last known principal place of business of the defendant; and   The defendant's receipt, or the receipt issued by the post office with which the letter is registered, showing the name of the sender of the letter and the name and address of the person to whom the letter is addressed, and the affidavit of the plaintiff or plaintiff's attorney showing a compliance with this section are filed with the clerk of the court in which the action is pending on or before the date the defendant is required to appear, or within a further time that the court allows.   
 No plaintiff or complainant shall be entitled to a judgment by default, or a judgment with leave to prove damages, or a judgment pro confesso under  56-2-602  56-2-604, this section and  56-2-606 until the expiration of thirty (30) days from the date of the filing of the affidavit of compliance.  
 Nothing contained in  56-2-602  56-2-605 and this section shall limit or abridge the right to serve any process, notice or demand upon any insurer in any other manner now or hereafter permitted by law.  
 Before any unauthorized foreign or alien insurer files or causes to be filed any pleading in any action, suit or proceeding instituted against it, the unauthorized insurer shall:   Deposit with the clerk of the court in which the action, suit or proceeding is pending cash or securities or file with the clerk a bond with good and sufficient sureties, to be approved by the court, in an amount to be fixed by the court sufficient to secure the payment of any final judgment that may be rendered in the action; or   Procure a certificate of authority to transact the business of insurance in this state.   
 The court, in any action, suit or proceeding in which service is made in the manner provided in  56-2-603 or  56-2-604, may, in its discretion, order a postponement that may be necessary to afford the defendant reasonable opportunity to comply with  56-2-607, and to defend the action.  
 Nothing in  56-2-607 is to be construed to prevent an unauthorized foreign or alien insurer from filing a motion to quash a writ or to set aside service of the motion made in the manner provided in  56-2-603 or  56-2-604 on the ground either that:   The unauthorized insurer has not done any of the acts enumerated in  56-2-602; or   The person on whom service was made pursuant to  56-2-604 was not doing any of the acts enumerated in  56-2-604.   
 Upon the request of the commissioner, the attorney general and reporter may proceed in the courts of this state, or any reciprocal state, to enforce any order or decision in any court proceeding, or in any administrative proceeding before the commissioner, against any insurer arising out of a violation of  56-2-105  56-2-111.  
 As used in this part:   Foreign decree means any decree or order in equity of a court located in a reciprocal state, including a court of the United States located in the reciprocal state, against any insurer incorporated or authorized to do business in this state;   Qualified party means a state regulatory agency acting in its capacity to enforce the insurance laws of its state; and   Reciprocal state means any state or territory of the United States, the laws of which contain procedures substantially similar to those specified in this part for the enforcement of decrees or orders in equity issued by courts located in other states or territories of the United States, against any insurer incorporated or authorized to do business in the state or territory.   
 The commissioner shall determine which states and territories qualify as reciprocal states and shall maintain at all times an up-to-date list of those states.  
  Filing and Status.  A copy of any foreign decree authenticated in accordance with the statutes of this state may be filed in the office of the clerk of the chancery court of Davidson County.   The clerk, upon verifying with the commissioner that the decree or order qualifies as a foreign decree, shall treat the foreign decree in the same manner as a decree of that court. A foreign decree so filed has the same effect and shall be deemed as a decree of that court, and is subject to the same procedures, defenses and proceedings for reopening, vacating, or staying as a decree of that court and may be enforced or satisfied in like manner.     Notice of Filing.  At the time of the filing of the foreign decree, the attorney general and reporter shall make and file with the clerk of the chancery court of Davidson County an affidavit setting forth the name and last known post office address of the defendant.   Promptly upon the filing of the foreign decree and the affidavit, the clerk shall mail notice of the filing of the foreign decree to the defendant at the address given and to the commissioner and shall make a note of the mailing in the docket. In addition, the attorney general and reporter may mail a notice of the filing of the foreign decree to the defendant and to the commissioner and may file proof of mailing with the clerk. Lack of mailing notice of filing by the clerk shall not affect the enforcement proceedings if proof of mailing by the attorney general and reporter has been filed.   No execution or other process for enforcement of a foreign decree filed under this part shall issue until thirty (30) days after the decree is filed.     Stay.  If the defendant shows the chancery court of Davidson County that an appeal from the foreign decree is pending or will be taken, or that a stay of execution has been granted, that court shall stay enforcement of the foreign decree until the appeal is concluded, the time for appeal expires, or the stay of execution expires or is vacated, upon proof that the defendant has furnished the security for the satisfaction of the decree required by the state in which it was rendered.   If the defendant shows the court any ground upon which enforcement of a decree of the court would be stayed, the court shall stay enforcement of the foreign decree for an appropriate period, upon requiring the same security for satisfaction of the decree that is required in this state.     Fees.  Fees for docketing, transcription or other enforcement proceedings shall be as provided for decrees of the chancery court of Davidson County.    
 The commissioner shall maintain as confidential all information received from the National Association of Insurance Commissioners (NAIC), any state or federal agency, and foreign countries that is confidential in those jurisdictions. The commissioner may allow for the sharing of otherwise confidential documents, materials, information, administrative or judicial orders, and other actions with the regulatory officials of any state or federal agency and foreign countries; provided, that the recipients are required, under their respective laws, to maintain such confidentiality. The commissioner may also allow for the sharing of otherwise confidential documents, materials, information, administrative or judicial orders, and other actions with the NAIC; provided, that the NAIC demonstrates by written statement its intent to maintain such confidentiality.  
 This part shall be known and may be cited as the Corporate Governance Annual Disclosure Act.  
  The purpose of this part is to:  Provide the commissioner a summary of an insurer or insurance group's corporate governance structure, policies, and practices to permit the commissioner to gain and maintain an understanding of the insurer's corporate governance framework;   Outline the requirements for completing a corporate governance annual disclosure with the commissioner; and   Provide for the confidential treatment of the corporate governance annual disclosure and related information.     Nothing in this part prescribes or imposes corporate governance standards and internal procedures beyond that which is required under applicable law. Notwithstanding this section, nothing in this part limits the commissioner's authority or the rights or obligations of third parties under  56-1-408  56-1-413.   This part applies to all insurers domiciled in this state, except for:  Captive insurance companies licensed under the Revised Tennessee Captive Insurance Act, compiled in chapter 13 of this title; and   Risk retention groups licensed under chapter 45 of this title.     
 As used in this part:   Commissioner means the commissioner of commerce and insurance;   Corporate governance annual disclosure or CGAD means a confidential report filed by the insurer or insurance group in accordance with this part;   Department means the department of commerce and insurance;   Insurance group means those insurers and affiliates included within an insurance holding company system as defined in  56-11-101;   Insurer has the same meaning as insurance company in  56-1-102, except that insurer does not include agencies, authorities, or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state;   NAIC means the National Association of Insurance Commissioners; and   ORSA summary report means the report filed in accordance with chapter 11, part 2 of this title.   
  An insurer, or the insurance group of which the insurer is a member, shall, no later than June 1 of each calendar year, submit to the commissioner a CGAD that contains the information described in  56-2-906(b). However, an insurer or insurance group that files a CGAD pursuant to  56-2-906(c) may elect to file the CGAD either no later than June 1 or December 31 of each calendar year. Notwithstanding any request from the commissioner made pursuant to subsection (c), if the insurer is a member of an insurance group, the insurer must submit the report required by this section to the applicable insurance commissioner of the lead state for the insurance group, in accordance with the laws of the lead state, as determined by the procedures outlined in the most recent Financial Analysis Handbook adopted by the NAIC.   The CGAD must include a signature of the insurer or the insurance group's chief executive officer or corporate secretary attesting that, to the best of that individual's belief and knowledge, the insurer has implemented the corporate governance practices described in the CGAD and that a copy of the disclosure has been provided to the insurer's board of directors or the appropriate committee of the board.   An insurer not required to submit a CGAD under this part shall do so upon the commissioner's request.    For the purposes of completing the CGAD, the insurer or insurance group may provide information regarding corporate governance at the ultimate controlling parent level, an intermediate holding company level, the individual legal entity level, or at a combination of levels depending upon how the insurer or insurance group has structured its system of corporate governance. The insurer or insurance group shall consider the following criteria in determining the level at which the CGAD should be filed:  The level at which the insurer's or insurance group's risk appetite is determined;   The level at which the earnings, capital, liquidity, operations, and reputation of the insurer are overseen collectively and at which the supervision of those factors are coordinated and exercised; or   The level at which legal liability for failure of general corporate governance duties would be placed.     If, subsequent to the initial filing of the CGAD, the insurer changes the level of reporting, the insurer shall explain the reason for the change in the first CGAD filed after the change in level of reporting.     The review of the CGAD and any additional requests for information must be made through the lead state as determined by the procedures within the most recent Financial Analysis Handbook adopted by the NAIC.   Insurers providing information substantially similar to the information required by this part in other documents provided to the commissioner, including proxy statements filed in conjunction with Form B requirements, or other state or federal filings provided to the commissioner, or as part of any department request or examination, are not required to duplicate that information in the CGAD, but are only required to cross reference the document in which the information is included.   
 The commissioner may promulgate rules as are necessary to carry out this part in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
  The insurer or insurance group has discretion over the responses to the CGAD inquiries, provided that the CGAD must contain the material information necessary to permit the commissioner to gain an understanding of the insurer's or group's corporate governance structure, policies, and practices. The commissioner may request additional information that the commissioner deems material and necessary to provide the commissioner with a clear understanding of the corporate governance policies, the reporting or information system, or the controls implementing those policies.   Notwithstanding subsection (a), the CGAD must be prepared consistent with rules promulgated pursuant to this part. The rules must be consistent with subsection (c). Documentation and supporting information must be maintained and made available upon examination or upon the request of the commissioner.   Rules promulgated under this part must prescribe separate but suitable corporate governance reporting requirements for any insurer or insurance group that is not admitted to write insurance on a direct basis in any other jurisdiction and is either:  Organized under the Tennessee Nonprofit Corporation Act, compiled in title 48, Chapters 51 68; or   Governed by a board of which at least seventy-five percent (75%) of its voting directors receive no more than nominal compensation.     
  Documents, materials, or other information, including the CGAD, in the possession or control of the department that are obtained by, created by, or disclosed to the commissioner or any other person under this part, are recognized as being proprietary and containing trade secrets. All such documents, materials, or other information are confidential by law and privileged, are not subject to public inspection under  10-7-503 or  56-1-602, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials, or other information in the furtherance of any regulatory or legal action brought as part of the commissioner's official duties. The commissioner shall not otherwise make the documents, materials, or other information public without the prior written consent of the insurer. Nothing in this section requires the written consent of the insurer before the commissioner may share or receive confidential documents, materials, or other CGAD-related information pursuant to subsection (c) to assist in the performance of the commissioner's official duties.   Neither the commissioner nor any person that receives documents, materials, or other CGAD-related information, through examination or otherwise, while acting under the authority of the commissioner, or with whom the documents, materials, or other information are shared pursuant to this part, are permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a).   In order to assist the commissioner in the performance of the commissioner's regulatory duties, the commissioner:  May, as necessary and upon request, share documents, materials, or other CGAD-related information, including the confidential and privileged documents, materials, or information subject to subsection (a), and including proprietary and trade secret documents and materials, with other state, federal, or international financial regulatory agencies, including members of any supervisory college as set forth in  56-11-116, and with the NAIC, and with third-party consultants pursuant to  56-9-108; provided, that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and has verified in writing its legal authority to maintain such confidentiality; and   May receive documents, materials, or other CGAD-related information, including otherwise confidential and privileged documents, materials, or information, and including proprietary and trade-secret information or documents, from regulatory officials of other state, federal, or international financial regulatory agencies, including members of any supervisory college as set forth in  56-11-116, and from the NAIC, and shall maintain as confidential or privileged any such documents, materials, or information received with notice or the understanding that they are confidential or privileged under the laws of the jurisdiction that is the source of the documents, materials, or information.     The sharing of information and documents by the commissioner pursuant to this part does not constitute a delegation of regulatory authority or rulemaking, and the commissioner is solely responsible for the administration, execution, and enforcement of this part.   No waiver of any applicable privilege or claim of confidentiality in documents, proprietary and trade-secret materials, or other CGAD-related information shall occur as a result of disclosure of CGAD-related information or documents to the commissioner under this part or as a result of sharing as authorized under this part.   
  The commissioner may retain, at the insurer's expense, third-party consultants, including attorneys, actuaries, accountants, and other experts not otherwise part of the commissioner's staff, as may be reasonably necessary to assist the commissioner in reviewing the CGAD and related information or the insurer's compliance with this part.   Any persons retained under subsection (a) are under the direction and control of the commissioner and shall act in a purely advisory capacity.   The NAIC and any third-party consultants are subject to the same confidentiality standards and requirements as the commissioner.   As part of the retention process, a third-party consultant shall verify to the commissioner, with notice to the insurer, that it is free of conflicts of interest and that it has internal procedures in place to monitor compliance with conflicts and to comply with the confidentiality standards and requirements of this part.   A written agreement with the NAIC or a third-party consultant governing sharing and use of information provided pursuant to this part must contain the following provisions and expressly require the written consent of the insurer prior to making public information provided under this part:  Specific procedures and protocols for maintaining the confidentiality and security of CGAD-related information shared with the NAIC or a third-party consultant pursuant to this part;   Procedures and protocols for sharing by the NAIC only with other state regulators from states in which the insurance group has domiciled insurers. The agreement must provide that the recipient agrees in writing to maintain the confidentiality and privileged status of the CGAD-related documents, materials, or other information and has verified in writing its legal authority to maintain confidentiality;   A provision specifying that ownership of the CGAD-related information shared with the NAIC or a third-party consultant remains with the department and that the NAIC's or third-party consultant's use of the information is subject to the direction of the commissioner;   A provision that prohibits the NAIC or a third-party consultant from storing the information shared pursuant to this part in a permanent database after the underlying analysis is completed;   A provision requiring the NAIC or third-party consultant to provide prompt notice to the commissioner and to the insurer or insurance group regarding any subpoena, request for disclosure, or request for production of the insurer's CGAD-related information; and   A requirement that the NAIC or a third-party consultant consent to intervention by an insurer in any judicial or administrative action in which the NAIC or a third-party consultant may be required to disclose confidential information about the insurer shared with the NAIC or a third-party consultant pursuant to this part.     
 Any insurer failing, without just cause, to timely file the CGAD as required in this part is required, after notice and a hearing, to pay a civil penalty of one hundred dollars ($100) per day for each day of delay, to be recovered by the commissioner, which must be paid into the general fund of this state. The maximum penalty under this section is ten thousand dollars ($10,000). The commissioner may reduce the civil penalty if the insurer demonstrates to the commissioner that imposition of the civil penalty would constitute a financial hardship to the insurer in the commissioner's sole discretion.  
 If any provision of this part other than  56-2-907, or the application of this part to any person or circumstance, is held invalid, such determination shall not affect the provisions or applications of this part that can be given effect without the invalid provision or application, and to that end the provisions of this part, with the exception of  56-2-907, are severable.  
 Every mutual or assessment fire insurance company shall file with the commissioner of commerce and insurance a properly certified copy of its charter or articles of incorporation, together with a sworn statement of three (3) of the incorporators that bona fide agreements have been entered into for the insurance of property of an amount not less than fifty thousand dollars ($50,000), and of the nature and class stated in this chapter.  
 The directors of every corporation subject to this chapter shall issue policies of insurance, signed by its president and secretary, agreeing in the name of the corporation to pay all damages, not exceeding the amount insured, which shall not be more than five thousand dollars ($5,000) on any one (1) risk, done to dwelling houses, barns and their contents, and other property not more hazardous and buildings not more hazardous, in cities or villages, and their contents, during the time mentioned in the policy. Every policy issued shall have attached to it a printed copy of the bylaws and regulations of the corporation.  
 Every person insured in and by any corporation subject to this chapter shall give an undertaking in the form as the corporation may prescribe, which form shall be uniform between and by all the insured, to pay the person's pro rata share of all losses or damages sustained by any member from any cause specified in the policy of the corporation. The person shall also pay a reasonable sum for expenses as the bylaws may require.  
  Should the amount of any loss or damage exceed the amount of money on hand, such of its officers as may be authorized by the bylaws to do so shall convene the directors or executive committee, who may borrow money on the credit of the corporation, sufficient to pay the loss, but no more, or make an assessment upon all the property insured pro rata according to its classification, and according to the amount insured, sufficient to pay what the cash in hand falls short of paying, or for the whole loss or damage, as the directors or executive committee may decide to be for the best interest of the corporation. If the directors or the executive committee deem it to be for the best interest of the corporation, they may, with the authority of a majority in value of the insurance held by members of the corporation, conferred by resolution, bylaw, or otherwise, previously given, make an estimate of the sums as, in their judgment, will be necessary to pay all losses, damages, and expenses for the current year, and supply any deficiency in the preceding year, and proceed to assess, levy, and collect the same of the members of the corporation at such times as, in their discretion, will be most advantageous to the corporation.   The assessment shall be made pro rata upon all property at the time insured, according to its classification or according to the amount insured, sufficient to pay the amount so estimated.   Not more than one (1) such general assessment shall be made in any one (1) year, nor shall any such assessment be made if more than ten percent (10%) of any previous assessment shall be in the treasury of the corporation, and not at the time required for losses actually suffered.   No assessment shall be invalid because made in whole or in part for the purpose of paying any money borrowed by the directors or executive committee, which has been used in the payment of any claim for the loss or damage against the corporation.   
 The officers of the corporation shall not enter into any contract or agreement, or make any debt of any kind, except for payment of losses or damages as provided in  56-20-104, that will require an assessment of more than fifty cents (50) on each one hundred dollars ($100) of insurance in force. Neither shall the officers of any such company use for current expenses any money assessed for losses or damages, and all money for the expenses raised by assessment must be so stated in the notices calling for the assessment.  
 The secretary shall, within thirty (30) days after any assessment has been made, notify every member of the corporation, by written or printed notice, signed by the secretary, stating the amount due the corporation from the members, the time when and to whom it shall be paid, and the use to be made of the money collected. Such time shall not be less than thirty (30) days nor more than sixty (60) days from the service of the notice, which notice may be served personally or by mail. If by mail, service shall be deemed complete when deposited in the post office at the place where the principal office of the corporation is located, directed to each member at the member's place of residence or business, and postage prepaid. The expense and cost of collection of the assessment shall be regulated by the bylaws.  
 The officers of every corporation subject to this chapter may proceed to collect any assessment, when due and unpaid for thirty (30) days. Refusal and neglect on their part to endeavor to collect the assessments, or to perform any of the duties imposed by this chapter, shall render them liable, individually, for the amount lost by any person who loses by their neglect or refusal, and an action can be maintained against the officers for the losses.  
 An action may be brought by the corporation against any member to recover all assessments that the member may neglect or refuse to pay, made upon the member under this chapter, or by the bylaws of the corporation. If the corporation is compelled to bring any such action in order to collect any such assessment, it may recover the amount so assessed, with fifty percent (50%) to be added to the amount, in addition to lawful interest, as a penalty for the neglect and refusal to pay within the time required.  
 The corporation shall have a lien upon the property insured to secure the payment of the assessments and calls as may be legally made under the contract of insurance, and, in case of loss, the subsequent purchaser, or junior lienholder, shall be entitled to the benefits of the insurance, and to the rights, benefits and privileges of the original insured, to the extent of the insured's interest in the property.  
 Any member who neglects or refuses to pay an assessment may for this reason, or for any other reason satisfactory to the directors or executive committee, be excluded by a majority of the directors or executive committee, or as the bylaws may prescribe, from the corporation; and when thus excluded, the secretary shall cancel or withdraw the person's policy or policies and notify the person of the fact, which shall prevent the person's recovering for any loss or damage sustained after the exclusion.  
 A member liable under  56-20-110 shall remain liable for the payment of any assessment made prior to the member's exclusion, and for the penalty provided in  56-20-108, in case action has been or shall be brought against the member therefor, within twelve (12) months after the time it was due.  
 If any member of the corporation is excluded therefrom as provided in  56-20-110, and the policy issued to such member cancelled, the secretary shall at once enter the action, with date thereof, upon the records of the association, and, either in person or by mail, notify the member of the exclusion, and, if by mail, the postage shall be prepaid and the notice be addressed to the office given in the application or policy. From and after the personal notice, or five (5) days after mailing the notice, as required in this section, the policy shall be cancelled, and all liability on the policy shall cease, but the owner shall be entitled to receive from the corporation a repayment of an equitable portion of all unearned money to which the member has contributed, if any.  
 The president and secretary of every corporation doing business under this chapter shall make a statement, under oath, to the commissioner showing the condition of the corporation on December 31 in each year, which shall contain the amount and kind of property insured, the number of policies issued from the time of organization of the corporation up to the time of making the statement, the number insured during the year last past, the amount of insurance accepted and amount withdrawn, expired, and cancelled during the year, the whole amount of insurance in force on December 31, the amount of money received during the year by the corporation, the amount of disbursements, specifying the amount paid for fees, salaries, commissions, and all other matters of interest to the corporation or member that the commissioner may require on or before February 1 next following.  
 It is the duty of the commissioner, upon the application of five (5) members of any company doing business under this chapter, or two (2) directors, or the president or secretary, to examine into the management of such company, and the company shall pay the necessary expenses of the examination. Should the commissioner find that any officer or any number of officers have been, or are, at the time, violating this chapter or the bylaws of the company, the commissioner shall cause the officer or officers to be prosecuted, as with other corporations that are guilty of like violations.  
 The commissioner shall collect and pay into the state treasury the fees prescribed by  56-4-101 for issuing each new certificate of authority for filing the company's annual statement and for amendments to the company's certificate of authority.  
 Companies organized or incorporated under the laws of this state, and operated under and according to this chapter, are authorized and empowered to extend their business to and operate in contiguous counties.  
 Sections 56-2-101  56-2-104, 56-2-113  56-2-115, 56-2-201, and 56-2-301 do not apply to or affect, nor should they be construed as in any way applying to or affecting, domestic, state and county mutual fire insurance companies, the organization of which was and is authorized by this chapter and Chapters 2 1 and 22 of this title.  
  Any mutual fire insurance company organized under the laws of this state shall have a paid-up guaranty capital of not less than nine hundred fifty thousand dollars ($950,000) divided into shares of not exceeding one hundred dollars ($100) each.   The increase in the minimum amount of guaranty capital provided by the 1969 amendment does not apply to companies qualified and authorized prior to May 7, 1969.   
 Notwithstanding the provisions contained in  56-2-104 to the contrary, guaranty capital securities, in amounts equal to the requirements of  56-2-104(a)(4), must be deposited with the commissioner of commerce and insurance for the protection of the policyholders and creditors of the company in this state. Companies not having guaranty capital securities must deposit securities equal to ten percent (10%) of net written premiums, annually, not to exceed the requirements of  56-2-104(a)(4).  
 Every mutual fire insurance company organized with a guaranty capital may allow its subscribers all the interest and dividends accruing from the guaranty capital securities, according to the amount paid in or deposited by the respective guarantors, and, in addition, may pay the guarantors dividends of not exceeding six percent (6%) per annum on their respective paid-up shares; provided, that the surplus at the end of each year, over and above all liabilities, including reinsurance reserve and guaranty capital, is sufficient to pay the dividends.  
 The capital and other invested assets of the company shall be invested in real estate mortgages or mortgage notes, not exceeding one half (12) of the value of the property, or in such other securities as are permitted for investment by domestic stock fire insurance companies.  
  Should the guaranty capital of any mutual fire insurance company at any time become impaired and remain so for sixty (60) days, the company shall cease issuing policies until the impairment is made good by either replacing the funds due the guaranty capital or by reducing the authorized amount of same by written notice to the commissioner by an amount equal to the impairment, but in no event to less than nine hundred fifty thousand dollars ($950,000). The company may continue to collect premiums that are due or become due on policies already in force while the impairment exists and until it is made good.   The increase in the minimum amount of guaranty capital provided by the 1969 amendment does not apply to companies qualified and authorized prior to May 7, 1969.   
 A mutual fire insurance company may at any time use any surplus over and above all liabilities, including reinsurance reserve, for the purpose of retiring or liquidating any part of its guaranty capital. All of the guaranty capital shall be retired when an amount of net surplus of one million five hundred thousand dollars ($1,500,000) shall have been accumulated.  
 When guaranty capital is being retired or liquidated, if the guarantors have made their contributions in cash, a like amount of cash shall be repaid them; but if the same has been made in securities, the securities if not disposed of, or their cash value at the time of their sale if disposed of, shall be returned to the guarantor contributing them, or the return of the guaranty capital shall be made on such other terms as are agreed upon when the securities are deposited by the guarantor.  
  A guarantor desiring to surrender the guarantor's shares and withdraw the guaranty capital or securities may do so by giving the company ninety (90) days' written notice to that effect; provided, that the withdrawal does not impair the company's guaranty capital below nine hundred fifty thousand dollars ($950,000).   The increase in the minimum amount of guaranty capital provided by the 1969 amendment does not apply to companies qualified and authorized prior to May 7, 1969.   
 When computing reinsurance reserve, policy fees, membership and endorsement fees, all agents' commissions and salaries of all agents required to have a certificate of authority from the department of commerce and insurance shall be excluded as a part of the premium receipts. The unpaid premiums in the course of collection and the unpaid premium notes of the policyholders not over twelve (12) months due shall be treated as ledger assets.  
  The deposits and investments of every mutual fire insurance company subject to this chapter shall be made in its corporate name.   No officer of the company or member of any committee thereof charged with the investment of funds shall borrow the same or be, directly or indirectly, liable therefor, for or on account of loans made to others, nor shall any director or any officer take or receive to use any fee, brokerage, commission, gift or other consideration on account of any loan made by or on behalf of any such company; provided, that this does not prevent the persons subscribing for or securing shares of guaranty capital in any company operating on the guaranty capital plan on equal terms and conditions with other guarantors.   A violation of this section is a Class C misdemeanor.   
 Every company subject to this chapter shall make an annual report to the commissioner, by March 1 of each year as of December 31 of the preceding year, on blank forms prepared and furnished by the commissioner for that purpose, setting forth the transactions of the company during the previous year, showing its condition at the close of the year, and shall pay to the commissioner a fee of fifty dollars ($50.00) at the time of filing the statement.  
  The commissioner, whenever satisfied that any such company has exceeded its powers or has failed to comply with this chapter, or is conducting its business fraudulently, or that in the commissioner's judgment its financial condition is unsound, or that it is not maintaining the required amount of net surplus or unimpaired guaranty capital and reserve, shall have the duty to 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 in quo warranto or an action of that nature in any court of competent jurisdiction nearest to the company's domicile; and, if upon the trial, the court finds that the allegations in the petition are true and that legal grounds exist therefor, the company shall be enjoined from doing further business; provided, that the company shall have reasonable notice served upon it by the commissioner and shall be given reasonable opportunity and time to show cause why the proceedings should not be commenced and to make good any impairment in its guaranty capital or reserve.   Whenever, in the opinion of the court, the company should not be permitted longer to transact business, the court shall appoint a receiver for the purpose of winding up its business as in other cases of receivership in this state.   
 All companies operating under the guaranty capital provisions of this chapter and levying advance premiums and maintaining a full legal reinsurance reserve may limit their policyholders' liability to the amount of premiums stated in the policy or insurance contract and collect the same as set out in the policy and contract.  
 The insurance contracts of all such companies shall be made to conform to this chapter, and shall consist of the policy proper; the constitution and bylaws of the company, which must be attached to or printed on the policy; all endorsements made on or attached to the policy; the parts of the application as are attached to or incorporated in the insurance contract; and any premium note, or other policy obligation given by the insured, all of which shall be binding on the insured as long as the insured remains a member of or policyholder in the company.  
 The amount of the regular premium and the contingent premium shall be plainly written on the outside or title page of the policy, and it shall be plainly stated in the policy or insurance contract that it is issued in consideration of the regular premium, and the further contingent premium of not less than the same amount in addition to the premium.  
  All companies operating under this chapter and not maintaining a nine hundred fifty thousand dollar ($950,000) guaranty capital or more and a full legal reinsurance reserve, exclusive of all other liabilities, shall charge one (1) full regular annual or term premium for each policy issued and collect the same at the times and under the conditions as the insurance contract provides for; and the insured or policyholders shall be liable for a contingent premium equal to and in addition to the regular premium if needed by the company for the purpose of paying its losses and other liabilities. If any such company desires, it may make provisions in its insurance contract for assessments in addition to the one (1) contingent premium, which is herein made mandatory.   The increase in the minimum amount of guaranty capital provided by the 1969 amendment does not apply to companies qualified and authorized prior to May 7, 1969.   
 The contingent liabilities of the policyholders shall be computed as contingent assets of the company. The unpaid regular premium and premium notes of the policyholders not over twelve (12) months due shall be computed as ledger assets of the company.  
 No policyholder shall be liable for any amount in excess of the regular premium and contingent premium as herein provided for and required to be stated in the policy or insurance contract; nor shall any policyholder be liable for losses or expenses accruing before the policy was issued, nor for losses or expenses accruing after the termination of the insurance.  
 Every company operating under this chapter shall have a lien upon the property insured to secure the payment of all regular premiums, contingent premiums and other policy obligations due the company.  
 If the company is compelled to collect the premiums or obligation by suit or through a collecting attorney, the insured shall be liable for all costs incident to the proceeding, including reasonable attorney's fee.  
 Every policyholder in good standing of any company doing business under this chapter shall have one (1) vote at the election of the board of directors, and may vote either in person or by proxy. Guarantors in a guaranty capital company shall have one (1) vote each for each of their respective paid-up shares, and may vote either in person or by proxy. Not less than two thirds (2/3) of the directors in any such company shall be residents of this state. No person not a policyholder or guarantor shall be eligible to hold any principal office or be a director in any such company.  
 No officer or other person whose duty it is to determine the character of the risk and upon whose decision the application for insurance thereon shall finally be accepted or rejected shall receive as compensation any commission upon the premium; but the person's compensation shall be a fixed salary, fee, or the part of the net profits of the company as the board of directors may determine.  
  The maximum amount carried by any such company on any one (1) or more risks reasonably subject to one (1) fire shall not exceed the amounts prescribed in the following schedule when under the protection of a full paid fire department, not exceeding three fifths (3/5) of that amount when not under the protection of a full paid fire department:  Total amounts of fire insurance in force  Maximum single risk   When under $400,000  $ 2,000   $400,000 and under $600,000   3,000   $600,000 and under $900,000   4,000   $900,000 and under $1,200,000   5,000   $1,200,000 and under $1,500,000   5,500   $1,500,000 and under $2,000,000   6,000   $2,000,000 and under $2,500,000   7,000   $2,500,000 and under $3,000,000   8,000   $3,000,000 and under $3,500,000   9,000   $3,500,000 and under $5,000,000   10,000   $5,000,000 and over   12,500    When the insurance in force exceeds five million dollars ($5,000,000), the maximum permissible risk shall increase in the amount of one thousand dollars ($1,000) for each one million dollars ($1,000,000) of the amount of insurance in force; provided, that the maximum permissible risk shall in no case exceed thirty-five thousand dollars ($35,000). Notwithstanding any of the foregoing provisions, any state mutual fire insurance company having and maintaining seven hundred fifty thousand dollars ($750,000) in surplus funds, exclusive of contingent surplus funds, may insure any single risk up to fifty thousand dollars ($50,000). For purposes of this section, homeowners' policies, farm owners' policies and commercial multi-peril policies shall be considered permissible up to the limits of the property coverage.   State mutual fire insurance companies not maintaining guaranty capital securities equal to or more than two hundred thousand dollars ($200,000), deposited prior to July 1, 1975, or maintaining seven hundred fifty thousand dollars ($750,000) in surplus funds, exclusive of contingent surplus funds, may retain up to ten percent (10%) of risks classified as vehicle insurance, casualty insurance and surety insurance. Ninety percent (90%) shall be reinsured with another state mutual fire insurance company or any casualty insurance company licensed to transact the specific lines of coverage to be reinsured in this state.   
 Any state mutual fire insurance company organized under the laws of this state is empowered to contract by policy or other agreement with any insurance company authorized to do business in this state for reinsurance by the insurance company of the whole or any part of any risk it has outstanding by reason of the issuance of its policy of insurance. The state mutual fire insurance company is further empowered to reinsure for any state or county mutual fire insurance company organized under the laws of this state the whole or any part of any risk that the other company may be carrying and that such other company may desire to reinsure, in whole or in part.  
 All amounts in excess of those provided by  56-21-123 shall be reinsured concurrently with its writing. No company doing business under this chapter shall reinsure any of its business in any unauthorized company, except upon the written approval of the commissioner. The company shall pay the tax prescribed by chapter 4, part 2 of this title on all business it reinsures in companies not having their domicile in this state.  
 The reinsurance which any state mutual fire insurance company may secure upon any risk it has outstanding shall be deducted in determining whether the amount of the risk exceeds the limit that by law such company may insure.  
 When any company subject to this chapter reinsures in another company the whole or a part of any risk it has outstanding by reason of the issuance of a policy of insurance, the company shall pay to the reinsuring company the regular rate or assessment that the company accepting the reinsurance may establish or require, and any money or assets of the state mutual fire insurance company shall be liable for the payment of the premium or assessment due.  
 When any company subject to this chapter agrees to reinsure for another state or county mutual fire insurance company the whole or any part of the risk, as authorized by  56-21-124, it shall issue its regular policy of insurance for the amount of the risk, or part thereof so reinsured upon application therefor, and the company whose risk, in part or in whole, is reinsured, shall be liable to assessments or to pay a premium at the same rate as other members of the company for like insurance.  
 Dividends in cash or otherwise may be paid to policyholders annually, or at such times as the directors may decide upon. The percent of dividend to be paid shall be fixed from time to time by the board of directors, and the board's action shall be final, both as to the percent of dividend and the time when it shall be paid to the policyholders. The percent of dividend shall be the same to all in each class of policyholders, but shall not be so large as to require the payment for any calendar year of more than fifty percent (50%) of the company's net cash surplus at the close of that year.  
 Every company subject to this chapter shall be required to obtain from the commissioner a certificate of authority for each of its agents who solicits or writes insurance in this state, the fee for which shall be two dollars ($2.00).  
 A state mutual fire insurance company organized under this chapter may become a state stock fire insurance company operating under chapter 23 of this title pursuant to a plan and procedure that is approved in advance by the commissioner. The commissioner shall not approve any such plan or procedure unless:   The plan or procedure is equitable to the insurer's policyholders;   The plan or procedure is subject to approval by vote of not less than three fourths (34) of the votes cast in person, by proxy, or by mail at a meeting of policyholders called for the purpose pursuant to the notice and procedure as may be approved by the commissioner;   The equity of each policyholder in the insurer is determinable under a fair formula approved by the commissioner, which equity shall be based upon not less than the insurer's entire surplus, after deducting contributed or borrowed surplus funds and any outstanding guaranty capital securities, plus a reasonable present equity in its reserves and in all nonadmitted assets;   The policyholders entitled to receive stock upon conversion and to participate in the purchase of additional stock, if any, include all policyholders having policies in force on the date of conversion;   The plan provides that each policyholder of the insurer specified in subdivision (4) shall receive a proportionate part of the capital stock to be issued in respect to the policyholders' equity, and further gives to each such policyholder a nontransferable preemptive right to acquire a proportionate part of any additional capital stock to be issued and sold by the insurer, within a designated reasonable period. In addition to the issuance of shares in respect of the policyholders' equity, in the event the insurer has outstanding guaranty capital securities, the plan shall require the sale of a sufficient number of shares (at the same price per share as all other shares issued under the plan) to retire the guaranty capital securities; and to the extent each policyholder specified in subdivision (4) does not exercise the preemptive right to purchase a pro rata number of shares to retire the guaranty capital securities, the holders of the guaranty capital securities shall have the right to convert the securities, including all accrued interest, into shares of capital stock at such price;   Shares are so offered to policyholders at a price not greater than that thereafter offered to others nor at more than five (5) times the par value of the shares; and   The plan, when completed, would provide for the converted insurer paid-in capital stock in an amount not less than the minimum paid-in capital required of a state stock insurer organized under chapter 23 of this title; provided, that this provision does not apply to any converting mutual companies that were qualified and authorized under this chapter prior to May 7, 1969.   
 All companies operating under this chapter and not maintaining a nine hundred fifty thousand dollar ($950,000) guaranty capital or more and issuing policies providing for a contingent premium equal to and in addition to the regular premium and the contingent liabilities of the policyholders are included as contingent assets of the company, and the inclusion of these contingent assets on a statement of financial condition of the company at any date is required to show admitted assets equal to or greater than the outstanding liabilities, including provision for unearned premiums, the company shall cease to write any contracts of insurance except policies providing insurance against damage by fire, lightning, hail, extended coverage and tornadoes.  
 This chapter shall be known and may be cited as the Tennessee County Mutual Insurance Company Act of 2006.  
 This chapter governs the qualifications and procedures for licensing and general regulatory requirements for county mutual insurance companies insuring risks and property in this state.  
 As used in this chapter, unless the context otherwise requires:   Certificate of authority means a legal right granted by the commissioner and enjoyed by a county mutual insurance company to provide insurance as provided for in this chapter;   Commissioner means the commissioner of commerce and insurance;   County mutual insurance company means a person that is authorized to provide insurance coverage pursuant to this chapter;   Department means the department of commerce and insurance;   Gross premium means maximum gross premiums as provided in the policy contracts, new and renewal, including policy or membership fees, whether paid in part or in whole by cash, automatic premium loans, dividends applied in any manner whatsoever, and without deduction or exclusion of dividends in any manner, but excluding premiums returned on cancelled policies, on account of reduction in rates, or reductions in the amount insured;   Insurer or insurance company means any corporation, association, partnership or individual engaged as a principal in the business of insurance not licensed pursuant to this chapter;   Person means an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of these acting in concert;   Policyholder means a person who is insured by a county mutual insurance company;   Premium means money given in consideration to a county mutual insurance company on account of or in connection with an insurance policy for a specified policy period;   Principal place of business means the primary office maintained by a county mutual insurance company in the county in which a county mutual insurance company was first granted a certificate of authority; and   Surplus means the accumulated assets of a county mutual insurance company that exceed the county mutual insurance company's accrued losses and expenses.   
 It is unlawful for any person to enter into a contract of insurance as a county mutual insurance company or transact insurance business in this state as a county mutual insurance company without a certificate of authority provided by the commissioner.  
  To apply for a certificate of authority, a person shall file with the commissioner an application on a form adopted by the commissioner, accompanied by a nonrefundable filing fee in the amount referenced in  56-4-101(a)(1). A person in this state applying for a certificate of authority to act as a county mutual insurance company shall, under penalty of refusal, suspension or revocation of the certificate of authority, declare that the statements made in the application are true, correct and complete to the best of the person's knowledge and belief.   An application for a certificate of authority shall include the following documentation, together with any other information or documentation the commissioner may require:  A certified copy of the articles of incorporation, charter or other such document;   A certified copy of the bylaws or other similar document; and   The names of the officers and directors of the county mutual insurance company.     No certificate of authority shall be granted or maintained, unless the applicant or county mutual insurance company can prove to the commissioner's satisfaction that it will be able to write at least one hundred (100) policies of insurance and possesses at least two hundred thousand dollars ($200,000) in surplus.   
  A certificate of authority granted pursuant to this chapter shall authorize the county mutual insurance company to insure losses or damage to property, including losses of use and occupancy, by fire, lightning, explosion, windstorm, hail, riot, civil commotion, aircraft, vehicles, collision, extended only to farm machinery, livestock, and other covered farm property, overturn of farm equipment, smoke, glass breakage, theft, vandalism, falling objects, weight of ice, snow or sleet, freezing, sudden and accidental damages caused by discharge or failure of plumbing, heating, air conditioning or automatic sprinkler systems, sudden and accidental tearing apart, cracking, burning or bulging of plumbing, heating, air conditioning or automatic sprinkler systems, sudden and accidental jolts from artificially generated electrical currents to electrical appliances, devices, fixtures and wiring, electrocution, drowning, vicious animals, sinkhole, collapse and volcanic action.    When a county mutual insurance company provides the same financial security to policyholders, and meets all other requirements applicable to insurance companies writing the same insurance transactions, it may also provide comprehensive personal liability, farmers comprehensive personal liability, premises liability for dwellings up to four (4) families, premises liability for churches and medical payment coverage associated therewith, subject to the same limitations that apply to insurance companies and upon the express written permission of the commissioner. The commissioner may, with cause, withdraw the permission to write that business permitted by this subdivision (b)(1). Any decision by the commissioner to withdraw permission may be reviewed as a contested case pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5; provided, that the county mutual insurance company requests a hearing within thirty (30) days after notice of the withdrawal of permission.   Any county mutual insurance company meeting the requirements of subdivision (b)(1) shall place on deposit with the commissioner an amount that the commissioner deems necessary for the protection of policyholders of this state, the sum of which may be no less than two hundred thousand dollars ($200,000). The commissioner may decline to accept for deposit any specific issue of securities, if the commissioner determines that the securities may not provide the necessary protection to policyholders and creditors.      A certificate of authority shall not authorize a county mutual insurance company to issue a policy of insurance covering those risks found in subsection (a) where the retained amount of risk by the county mutual insurance company on any single risk exceeds the lesser of:  Twenty thousand dollars ($20,000), plus three percent (3%) of the county mutual insurance company's surplus; or   One hundred thousand dollars ($100,000).     Any county mutual insurance company meeting the requirements of subsection (b) may not issue a policy of insurance covering those risks found in subsection (b) where the retained amount of risk by the county mutual insurance company on any single risk exceeds one hundred thousand dollars ($100,000) liability and five thousand dollars ($5,000) medical payments.   For the purpose of calculating the allowable amount of risk that may be retained by a county mutual insurance company on any single risk under subdivision (c)(1)(A), the surplus of the county mutual insurance company shall be the lesser of:  That surplus that was reported in the county mutual insurance company's last annual statement;   The surplus level last known by the county mutual insurance company; or   The surplus level the commissioner may determine from any examination or investigation of the county mutual insurance company.       A county mutual insurance company may deduct the amount of reinsurance secured on a single risk in determining the retained amount of risk by the county mutual insurance company. A county mutual insurance company may secure reinsurance pursuant to  56-2-208(b)(2).   No county mutual insurance company shall write in excess of five million dollars ($5,000,000) in annual direct gross written premium under any certificate of authority granted by the commissioner.    A county mutual insurance company subject to this chapter may issue policies of insurance on property located in the county in which its principal place of business is located and in all those counties contiguous to the county in which its principal place of business is located. Whenever any county mutual insurance company has a surplus of at least seven hundred fifty thousand dollars ($750,000), it may be authorized, through the express written permission of the commissioner, to extend its operation to counties contiguous to the county in which its principal place of business is located in the second degree. Whenever any county mutual insurance company has a surplus of at least three million dollars ($3,000,000), it may be authorized, through the express written permission of the commissioner, to extend its operation to all other counties in this state as the commissioner may allow.   In addition to those surplus requirements found in subdivision (f)(1), a county mutual insurance company shall maintain a surplus of at least thirty-three percent (33%) of the county mutual insurance company's gross premium. Any county mutual insurance company failing to maintain the surplus requirements of this subdivision (f)(2) shall be considered to be operating in a hazardous financial condition and shall be subject to  56-22-117 and 56-22-118.   This subsection (f) shall not prevent any county mutual insurance company possessing a certificate of authority from the commissioner on June 30, 2006, from continuing its operations in any county in which it is legally doing business through December 31, 2010. Any county mutual insurance company not meeting the requirements of subdivision (f)(1) by December 31, 2010, must begin the process of winding down its business in those counties in which it is not lawfully permitted to do business under this section, with winding down to be completed by December 31, 2011.     Any company operating under this chapter must use the words county mutual insurance company in their name or the words must be displayed any time the name of the company is used. No name shall be used that is similar to any name already in use by any existing company organized and doing business in the United States, as to be confusing or misleading.   Except as provided for in  56-22-111, no county mutual insurance company shall be required or permitted to join, or contribute financially to, any insurance insolvency guaranty fund or similar mechanism in this state, nor shall any county mutual insurance company, or its insured or claimants against its insured, receive any benefit from any insolvency guaranty fund for claims arising under the insurance policies issued by the county mutual insurance company. The policy declaration pages of every county mutual insurance company shall prominently disclose that the policyholder is not entitled to receive any benefit from the Tennessee Insurance Guaranty Association.   
  Every policyholder in good standing shall be entitled to one (1) vote in person or by ballot transmitted by mail, as shall be provided in the bylaws, in any election for directors or upon any other issues properly brought to the policyholders for consideration.    No officer, director or other person whose duty it is to determine the character of risk and upon whose decision the application for insurance shall be accepted or rejected shall receive as any part of the person's compensation a commission upon the premium, but the compensation shall be a fixed salary, and/or a share of the net profits of the county mutual insurance company that the board of directors may determine appropriate.   Nothing under subdivision (b)(1) shall be construed to prohibit a county mutual insurance company from providing for its directors, officers and other employees reasonable benefits, including, but not limited to, directors' compensation, health insurance benefits and retirement benefits. Such benefits may be offered by a county mutual insurance company.   The commissioner may promulgate rules to set appropriate expense ratios to address those expenses incurred in subdivisions (b)(1) and (2).     
  In the event that the commissioner determines the existing surplus to be inadequate, a county mutual insurance company shall seek to accumulate a surplus or emergency fund in an amount that might be deemed necessary by the commissioner.   A county mutual insurance company may invest its assets in the same manner as an insurance company licensed to write property and casualty lines of insurance as provided for by chapter 3, part 4 of this title.   A county mutual insurance company may borrow money for the purpose of paying extraordinary losses. A county mutual insurance company shall conduct its affairs in such a manner as to pay those losses as might normally be expected in the course of doing business and to accumulate a surplus that might be used to pay losses above normal losses. A county mutual insurance company may borrow money only when it incurs substantial, extraordinary losses, and must notify the commissioner of its intent to borrow money to pay losses at least ten (10) business days before borrowing the money.   
   Every county mutual insurance company operating under this chapter shall file an annual statement with the commissioner on or before March 1 of each year that reports the company's financial condition and business on December 31 of the previous year. The annual statement shall be submitted on a form the commissioner may prescribe and shall be accompanied by a fee as provided for in  56-4-101(a)(4).   Any county mutual insurance company failing to make and file the annual statements required by this section shall have its authority to do new business suspended until the time that the required annual statement is filed and shall pay a fine of one hundred dollars ($100) a day for the period during which the county mutual insurance company's authority is suspended. Any suspension of a county mutual insurance company's authority to write new business shall not preclude or otherwise bar the commissioner from levying any other penalties or take any other actions allowed under this chapter.   The annual statement as filed with the commissioner under this section shall be presented at the annual meeting of the county mutual insurance company and shall be available for examination by any policyholder of the county mutual insurance company during its regular business hours.   Every county mutual insurance company operating under this chapter shall prepare its annual statement and any other financial information required under this chapter in accordance with rules promulgated by the commissioner and the National Association of Insurance Commissioners accounting practices and procedures manual in effect for the period covered by the annual statement.      Every county mutual insurance company shall comply with the filing requirements for personal risk insurers found in  56-5-105. All rates and forms shall be reviewed under the standards set forth in  56-5-103 and 56-5-104. The commissioner may disapprove the rates or forms pursuant to the process outlined in   56-5-108.   The cancellation by a county mutual insurance company of a policy of insurance is subject to the same standards as those set forth in chapter 7, part 19 of this title, as may be applicable.   Subject to the restrictions provided in this section, a county mutual insurance company may pay a dividend to its policyholders as the board of directors may determine. The amount of dividends paid during any calendar year by a county mutual insurance company shall not exceed ten percent (10%) of the lowest level of accumulated surplus existing on any day during the same calendar year. All proposed dividend payments shall be filed with the commissioner at least thirty (30) days prior to the proposed payment date. The commissioner may promulgate, by rule, standards by which dividends will be reviewed. Any decision by the commissioner to disapprove a proposed dividend of a county mutual insurance company may be reviewed as a contested case pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5; provided, that the county mutual insurance company requests a hearing within thirty (30) days after the denial of the proposed dividend request.     
 All county mutual insurance companies shall be required to carry an aggregate excess of loss reinsurance policy of no less than five percent (5%) of business in force. The amount required for such a policy shall be reduced by the county mutual insurance company's accumulated surplus.  
  If the assets of a county mutual insurance company are insufficient to pay its existing liabilities, including those liabilities incurred but not reported and other obligations, as well as maintain the reserves required under this chapter, the county mutual insurance company shall notify the commissioner immediately.   Upon notice or determination by the commissioner of a county mutual insurance company's insolvency under subsection (a), the commissioner shall promptly institute appropriate action under  56-22-118.    After the institution of action under  56-22-118, the commissioner, as early as is practicable, shall determine the amount of the insolvency and shall order the remaining county mutual insurance companies to pay an assessment in the amount of the insolvency, as well as any additional costs anticipated to be incurred by the commissioner for conducting the assessment.   The assessment paid by each county mutual insurance company shall be based on a pro rata formula whereby the share that each county mutual insurance company pays is in proportion to the total insurance in force of all the county mutual insurance companies combined for the year in which the insolvency occurs. However, the commissioner shall not assess a county mutual insurance company in excess of that county mutual insurance company's gross premium reported for the previous year.   In the event that the amount assessed by the commissioner exceeds the amount of the insolvency, the commissioner shall refund the excess amount to the assessed county mutual insurance companies.   The commissioner shall have the authority to contract with experts, actuaries, examiners, legal counsel and other persons for the purpose of assisting in the assessment. All costs incurred by the commissioner in conducting the assessment shall be assessed to the county mutual insurance companies that are subject to the assessment.      Any county mutual insurance company failing to pay an assessment under subsection (c) when it is made due by the commissioner shall forfeit and pay to the state, in addition to the amount of the assessment, an amount equal to five percent (5%) per month, or fractional part thereof, of the delinquency. All delinquencies shall bear interest at the rate of ten percent (10%) per annum from the date the assessment was due until paid. The penalty and interest shall apply to any part of the assessment unpaid by the due date and no penalty or interest may be waived.   Any county mutual insurance company that fails to pay an assessment ordered by the commissioner under this chapter within thirty (30) days of the date when the assessment is made due by the commissioner shall be summarily suspended from transacting any business in this state until the assessment is paid.     Assessments made by the commissioner shall be allowed as a credit against premium taxes imposed on a county mutual insurance company, up to twenty-five percent (25%) of the net premium taxes due in any one (1) calendar year, until the aggregate of all assessments paid by the county mutual insurance company have been offset by the premium tax credit.   The commissioner may bring action in the chancery court for Davidson County to recover any uncollected assessment against a county mutual insurance company.   
 The acquisition or merger of a county mutual insurance company is subject to the same standards and procedures set forth in  56-11-103, and any rules promulgated thereunder.  
  A person shall not sell, solicit or negotiate insurance covering those risks listed under  56-22-106(a), unless the person is licensed to sell property insurance under chapter 6, part 1 of this title.   A person shall not sell, solicit or negotiate insurance covering those risks listed under  56-22-106(b), unless the person is licensed to sell casualty insurance under chapter 6, part 1 of this title.   Any person that seeks to enter into a contract for the exclusive or dominant right to manage or control a county mutual insurance company shall be considered the managing general agent of the county mutual insurance company and shall comply with the requirements that apply to managing general agents under chapter 6, part 5 of this title.   
  All county mutual insurance companies shall pay a premium tax in accordance with chapter 4, part 2 of this title.   In addition to the premium taxes levied on county mutual insurance companies under subsection (a), any county mutual insurance company writing fire insurance and lines of business having fire coverages as a part of the risk rate shall pay additional taxes as found in  56-4-208 for the purpose of executing the fire marshal law. For the purposes of this subsection (b), the following portions of the amounts required to be reported by line of business in the annual statement required by  56-22-109 shall be considered premiums for insurance covering the peril of fire:  Fire lines, one hundred percent (100%);   Farmowners and homeowners multiple peril, fifty-five percent (55%); and   Combined coverages, including fire, extended coverages, vandalism, malicious mischief and theft, sixty percent (60%).     Payments for those premium taxes levied on county mutual insurance companies under subsection (a) shall be paid on a quarterly basis, with payments being due on or before June 1 for the first quarter of the calendar year, September 1 for the second quarter, December 1 for the third quarter and March 1 for the fourth quarter of the previous calendar year.   Should any county mutual insurance company fail or neglect to properly make the returns and payments required under this section, the county mutual insurance company shall be subject to the interest and penalties found in  56-4-216.   
  The commissioner may investigate or examine the affairs of a county mutual insurance company to the same extent that the commissioner may investigate or examine the affairs of an insurance company doing business in this state. At least once every five (5) years, the commissioner shall examine the affairs of each county mutual insurance company holding a certificate of authority in this state as to both its financial condition and its compliance with the law.   After the completion of an examination undertaken under subsection (a), the requirements and procedures of  56-1-411(d) shall be followed.   A county mutual insurance company examined by the commissioner shall pay all costs of the examination, including, but not limited to, the reasonable fees of actuaries, accountants, attorneys and other professionals that the commissioner may enter into a contract with to perform examination services on behalf of the commissioner.   All working papers, recorded information, documents or copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this chapter shall be given confidential treatment and may not be made public by the commissioner or any other person, except to the extent provided under  56-1-411. Access may also be granted to the National Association of Insurance Commissioners under  56-2-801, or to any other state or federal agency or law enforcement authority as the commissioner deems appropriate.   
  In addition to all other powers granted under this chapter, the commissioner may issue an order requiring a county mutual insurance company to cease and desist from engaging in any act or practice found to be in violation of this chapter or any other applicable law, rule, regulation or order of the commissioner.   Any order issued pursuant to this section shall be accompanied by a notice to the county mutual insurance company as to the right to have a hearing. All hearings conducted pursuant to this chapter shall be conducted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   Without limitation on other remedies provided by law, upon finding that any county mutual insurance company or other person has violated any cease and desist order issued by the commissioner, the commissioner may seek enforcement of the order through the attorney general and reporter in the chancery court of Davidson County.   
  The commissioner may, after notice and a hearing, levy a civil penalty in an amount not to exceed ten thousand dollars ($10,000) against a county mutual insurance company or an entity required to be licensed as a county mutual insurance company, upon a finding that the county mutual insurance company, the entity required to be licensed as a county mutual insurance company, an officer or director of the county mutual insurance company, or the entity required to be licensed as a county mutual insurance company:  Has violated this chapter or any rule promulgated under this chapter;   Has violated any order issued by the commissioner, including, but not limited to, those orders issued under  56-22-111, 56-22-115 and 56-22-116;   Is in a hazardous operating condition;   Has made a filing with the commissioner containing fraudulent or materially false or misleading statements of fact;   Has failed or refused to pay for the costs of any examination of the county mutual insurance company undertaken under this chapter;   Has been convicted of a felony; or   Has committed any unfair act or practice as set forth in  56-8-103 or  56-8-104.     All hearings conducted pursuant to this section shall be conducted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   Each day of continued violation shall constitute a separate violation for purposes of determining the possible amount of penalty under this section.   
 The commissioner may subject a county mutual insurance company to any proceeding or action authorized pursuant to chapter 9 of this title, under the same terms as insurance companies. For all such purposes, county mutual insurance companies are deemed to meet the definition of insurance company set forth in chapter 9 of this title.  
 A director, an officer, a member, an insurance producer, or an employee of a county mutual insurance company who knowingly or intentionally, directly or indirectly, uses or employs, or allows another person to use or employ, money, funds, securities, or assets of the county mutual insurance company for private profit or gain commits a fraudulent insurance act under  56-53-102, subjecting the person to the criminal penalties found in  56-53-104.  
 The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this chapter. All rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
  Every state stock fire insurance company organized and incorporated under the laws of this state and operating under this chapter, before commencing business, must file or deposit with the commissioner of commerce and insurance the following:  A properly certified copy of its charter;   Satisfactory evidence that it possesses and maintains capital in the amount of not less than nine hundred fifty thousand dollars ($950,000);   A duly executed instrument appointing agent for service of process, as required by  56-2-103; and   At least one hundred thousand dollars ($100,000) in cash or its equivalent, but the commissioner has the discretion to accept as the equivalent bonds of this state or bonds of the United States; all deposits required by this subdivision (a)(4) shall be subject to the same conditions as required in the case of stock or mutual life insurance companies.     The commissioner shall not approve any charter or issue a certificate of authority to any company under this chapter until the commissioner has found that:  The company has submitted a plan of operation; and   The incorporators, directors and proposed officers are of known character and there is no good reason to believe that they are affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions or other insurance or business relations with any person or persons known to have been involved in the improper manipulation of assets, accounts, reinsurance or any matter inimical to the business of insurance.     The commissioner, if satisfied that all the foregoing conditions have been met, shall issue to the company a certificate of authority to do a property, casualty and surety insurance business, as defined in  56-2-201, under this chapter.   Subdivision (a)(2) does not apply to companies qualified and authorized as state mutual fire insurance companies under chapter 21 of this title prior to May 7, 1969, which thereafter convert to state stock fire insurance companies under chapter 21; provided, that any such company shall have immediately after its conversion, and shall maintain thereafter at all times, a combined capital and surplus, including both earned surplus and capital (contributed) surplus, of not less than three hundred thousand dollars ($300,000).   
  False swearing to the statement required by  56-23-101 shall be deemed perjury, and those who commit it shall be punished as in other cases of perjury.   The company in whose interest the false statement is made shall be denied the right to do business for twelve (12) months thereafter, and if a certificate of authority be obtained thereby for the company, it shall be revoked by the commissioner and the company prohibited from doing business for twelve (12) months next after the discovery of the false statement.   
 For the purpose of determining the financial condition of a ceding insurer, only if the reinsurance is effected by the ceding insurer in any assuming insurer authorized to do such business in this state, or in any other state of the United States or the District of Columbia, the ceding insurer shall, in addition to any credit allowed against its loss reserves, receive credit for the reinsurance by way of deduction from its unearned premium liability, which liability shall be equal to the unearned portions of the gross premiums charged on unexpired or unterminated risks and policies.  
 For the purpose of determining the financial condition of any assuming insurer, the insurer shall be charged with an amount in its unearned premium liability equal to the amount of the deductions specified in  56-23-103, and in its valuation reserve liability with an amount at least equal to the amount that it would be required to maintain if it were the direct insurer of the assumed risks on the basis specified in the reinsurance agreement.  
 Chapter 5 of this title shall apply to every stock fire insurance company operating under this chapter.  
 Every company subject to this chapter shall make an annual report to the commissioner, by March 1 of each year as of December 31 of the preceding year, on blank forms prepared and furnished by the commissioner for that purpose, setting forth the transactions of the company during the previous year, showing its condition at the close of the year, and shall pay to the commissioner a fee of fifty dollars ($50.00) therefor at the time of filing the statement.  
 Any state stock fire insurance company organized under the laws of this state is empowered to contract with any insurance company authorized to do business in this state to reinsure the whole or any part of any risk it has outstanding by reason of the issuance of its policy of insurance.  
  No company doing business under this chapter shall reinsure any of its business in any unauthorized company, except upon the written approval of the commissioner.   The company shall pay the tax prescribed by chapter 4, part 2 of this title on all business it reinsures in companies not having their domicile in this state.   
 Every such company shall be required to obtain from the commissioner a certificate of authority for each of its agents who solicit or write insurance in this state, the fee for which shall be two dollars ($2.00).  
 The commissioner is authorized to promulgate rules and regulations not in conflict with this chapter for the purpose of implementing this chapter, and the regulations so promulgated shall have the force and effect of law.  
 Sections 56-3-103, 56-3-104 and 56-3-302  56-3-307 are applicable to any company organized and doing business under this chapter.  
 When the commissioner of commerce and insurance, on investigation, is satisfied that any corporation organized under the laws of this state and doing business as a life and casualty insurance company is insolvent because of matured death claims or other obligations due and unpaid exceeding its assets and death assessments or periodical payments called or in process of collection, or has exceeded its powers, has failed to comply with any provision of law, or is not carrying out its contracts with members in good faith, the commissioner shall report the facts to the attorney general and reporter, who, if of the opinion that the facts require the action, may apply to any court having jurisdiction for an order requiring the officers of the corporation to show cause within a reasonable time why the corporation should not be restrained from continuing to transact business.  
 The court may, in its discretion, appoint receivers to take charge of the effects and wind up the business of the corporation, subject to rules and orders as the court may from time to time prescribe, according to the course of proceedings in equity, or the court may, if it deems that the best interests of the corporation will be served thereby, decree a removal from office of the officers or any number thereof, and substitute suitable persons to serve until the regular annual election, or until a successor is regularly chosen.  
 Every corporation transacting business under this chapter shall obtain from the commissioner a certificate of authority for each agent writing or soliciting insurance for it in this state, which certificate shall show that the corporation has complied with this chapter, and the certificate, unless sooner revoked, shall expire with the end of each calendar year, and be renewed within thirty (30) days thereafter. Any corporation that neglects or fails to make application for certificates of authority for its agents or any one (1) of its agents, and any agent who transacts any business for the corporation without first receiving the certificate herein required, shall be liable to a fine of one hundred dollars ($100).  
 The commissioner shall collect and pay into the state treasury the fees prescribed by  56-4-101 for issuing each new certificate of authority, for filing the company's annual statement and for amendments to the company's certificate of authority.  
 Any incorporated society, order or supreme lodge, without capital stock, including one exempted under  56-25-704(a)(2), whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and that provides benefits in accordance with this chapter, is declared to be a fraternal benefit society.  
  A society is operating on the lodge system if it has a supreme governing body and subordinate lodges into which members are elected, initiated or admitted in accordance with its laws, rules and ritual. Subordinate lodges shall be required by the laws of the society to hold regular meetings at least once every sixty (60) days in furtherance of the purposes of the society.   A society may, at its option, organize and operate lodges for children under the minimum age for adult membership. Membership and initiation in local lodges shall not be required of the children, nor shall they have a voice or vote in the management of the society.   
 A society has a representative form of government when:   It has a supreme governing body constituted in one (1) of the following ways:  Assembly.  The supreme governing body is an assembly composed of delegates elected directly by the members or at intermediate assemblies or conventions of members or their representatives, together with other delegates as may be prescribed in the society's laws. A society may provide for election of delegates by mail. The elected delegates shall constitute a majority in number and shall not have less than two thirds (2/3) of the votes and not less than the number of votes required to amend the society's laws. The assembly shall be elected and shall meet at least every four (4) years and shall elect a board of directors to conduct the business of the society between meetings of the assembly. Vacancies on the board of directors between elections may be filled in the manner prescribed by the society's laws; or   Direct Election.  The supreme governing body is a board composed of persons elected by the members, either directly or by their representatives in intermediate assemblies, and any other persons prescribed in the society's laws. A society may provide for election of the board by mail. Each term of a board member may not exceed four (4) years. Vacancies on the board between elections may be filled in the manner prescribed by the society's laws. Those persons elected to the board shall constitute a majority in number and be not less than the number of votes required to amend the society's laws. A person filling the unexpired term of an elected board member shall be considered to be an elected member. The board shall meet at least quarterly to conduct the business of the society;     The officers of the society are elected either by the supreme governing body or by the board of directors;   Only benefit members are eligible for election to the supreme governing body, the board of directors or any intermediate assembly; and   Each voting member has one (1) vote; no vote may be cast by proxy.   
 As used in this chapter, unless the context otherwise requires:   Benefit contract means the agreement for provision of benefits authorized by  56-25-401, as that agreement is described in  56-25-404;   Benefit member means an adult member who is designated by the laws or rules of the society to be a benefit member under a benefit contract;   Certificate means the document issued as written evidence of the benefit contract;   Commissioner means the commissioner of commerce and insurance;   Laws means the society's articles of incorporation, charter, constitution and bylaws, however designated;   Lodge means subordinate member units of the society, known as camps, courts, councils, branches or by any other designation;   Premiums means premiums, rates, dues or other required contributions by whatever name known, which are payable under the certificate;   Rules means all rules, regulations or resolutions adopted by the supreme governing body or board of directors that are intended to have general application to the members of the society; and   Society means fraternal benefit society, unless otherwise indicated.   
  A society shall operate for the benefit of members and their beneficiaries by:  Providing benefits as specified in  56-25-1401; and   Operating for one (1) or more social, intellectual, educational, charitable, benevolent, moral, fraternal, patriotic or religious purposes for the benefit of its members, which may also be extended to others. The purposes may be carried out directly by the society, or indirectly through subsidiary corporations or affiliated organizations.     Every society has the power to adopt laws and rules for the government of the society, the admission of its members, and the management of its affairs. It has the power to change, alter, add to or amend the laws and rules and has such other powers as are necessary and incidental to carrying into effect the objects and purposes of the society.   The commissioner may require any society to furnish facts and figures disclosing expenditures made by the society under subdivision (a)(2).   
  A society shall specify in its laws or rules:  Eligibility standards for each and every class of membership; provided, that if benefits are on the lives of children, the minimum age for adult membership shall be set at not less than fifteen (15) years of age and not greater than twenty-one (21) years of age;   The process for admission to membership for each membership class; and   The rights and privileges of each membership class; provided, that only benefit members shall have the right to vote on the management of the insurance affairs of the society.     A society may also admit social members, who shall have no voice or vote in the management of the insurance affairs of the society.   Membership rights in the society are personal to the member and are not assignable.   
  The meetings of its supreme governing body may be held in any state, district, province or territory wherein the society has at least one (1) subordinate lodge, or in such other location as determined by the supreme governing body, and all business transacted at the meetings shall be valid in all respects as if the meetings were held in this state. The minutes of the proceedings of the supreme governing body and of the board of directors shall be in the English language.    A society may provide in its laws for an official publication in which any notice, report or statement required by law to be given to members, including notice of election, may be published. The required notice, report or statement shall be printed conspicuously in the publication. If the records of a society show that two (2) or more members have the same mailing address, an official publication mailed to one (1) member is deemed to be mailed to all members at the same address unless a member requests a separate copy.   Not later than June 1 of each year, a synopsis of the society's annual statement providing an explanation of the facts concerning the condition of the society thereby disclosed shall be printed and mailed to each benefit member of the society or, in lieu thereof, the synopsis may be published in the society's official publication.     A society may provide in its laws or rules for grievance or complaint procedures for members.   
  The officers and members of the supreme governing body or any subordinate body of a society shall not be personally liable for any benefits provided by a society.    Any person may be indemnified and reimbursed by any society for expenses reasonably incurred by, and liabilities imposed upon, the person in connection with or arising out of any action, suit or proceeding, whether civil, criminal, administrative or investigative, or threat thereof, in which the person may be involved by reason of the fact that the person is or was a director, officer, employee or agent of the society or of any firm, corporation or organization that the person served in any capacity at the request of the society.   A person shall not be so indemnified or reimbursed:  In relation to any matter in the action, suit or proceeding as to which the person is finally adjudged to be or have been guilty of breach of a duty as a director, officer, employee or agent of the society; or   In relation to any matter in the action, suit or proceeding, or threat thereof, which has been made the subject of a compromise settlement;  unless, in either such case, the person acted in good faith for a purpose the person reasonably believed to be in or not opposed to the best interests of the society and, in a criminal action or proceeding, in addition, had no reasonable cause to believe that the conduct was unlawful.      The determination whether the conduct of the person met the standard required in order to justify indemnification and reimbursement in relation to any matter described in subdivision (b)(2)(A) or (b)(2)(B) may only be made by the supreme governing body or board of directors by a majority vote of a quorum consisting of persons who were not parties to the action, suit or proceeding or by a court of competent jurisdiction.   The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of no contest, as to the person shall not in itself create a conclusive presumption that the person did not meet the standard of conduct required in order to justify indemnification and reimbursement.   The foregoing right of indemnification and reimbursement shall not be exclusive of other rights to which the person may be entitled as a matter of law and shall inure to the benefit of the person's heirs, executors and administrators.     A society has the power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the society, or who is or was serving at the request of the society as a director, officer, employee or agent of any other firm, corporation or organization against any liability asserted against the person and incurred by the person in any such capacity or arising out of the person's status as such, whether or not the society would have the power to indemnify the person against the liability under this section.   
 The laws of the society may provide that no subordinate body, nor any of its subordinate officers or members, shall have the power or authority to waive any of the laws of the society. The provision shall be binding on the society and every member and beneficiary of a member.  
 A domestic society organized on or after January 1, 1991, shall be formed as follows:   Ten (10) or more citizens of the United States, a majority of whom are citizens of this state, who desire to form a fraternal benefit society, may make, sign and acknowledge before some officer competent to take acknowledgement of deeds, articles of incorporation, in which shall be stated:  The proposed corporate name of the society, which shall not so closely resemble the name of any society or insurance company or any governmental entity as to be misleading or confusing;   The purpose for which it is being formed and the mode in which its corporate powers are to be exercised. The purposes shall not include more liberal powers than are granted by this chapter;   The names and residences of the incorporators and the names, residences and official titles of all the officers, trustees, directors or other persons who are to have and exercise the general control of the management of the affairs and funds of the society the first year, or until the ensuing election at which all such officers shall be elected by the supreme governing body, which election shall be held not later than one (1) year from the date of issuance of the permanent certificate of authority.      The articles of incorporation, duly certified copies of the society's bylaws and rules, copies of all proposed forms of certificates, applications therefor, and circulars to be issued by the society and a bond conditioned upon the return to applicants of the advance payments if the organization is not completed within one (1) year shall be filed with the commissioner, who may require further information the commissioner deems necessary.   The bond with sureties approved by the commissioner shall be in the amount, not less than three hundred thousand dollars ($300,000), nor more than one million five hundred thousand dollars ($1,500,000), as required by the commissioner.   All documents filed are to be in the English language.   If the purposes of the society conform to the requirements of this chapter and all provisions of the law have been complied with, the commissioner shall so certify, retain and file the articles of incorporation and furnish the incorporators a preliminary certificate of authority authorizing the society to solicit members as hereinafter provided.     No preliminary certificate of authority granted under this section shall be valid after one (1) year from its date or after the further period, not exceeding one (1) year, as may be authorized by the commissioner upon cause shown, unless the five hundred (500) applicants required by subdivision (4) have been secured and the organization has been completed as herein provided. The articles of incorporation and all other proceedings thereunder shall become null and void in one (1) year from the date of the preliminary certificate of authority, or at the expiration of the extended period, unless the society has completed its organization and received a certificate of authority to do business as hereinafter provided.   Upon receipt of a preliminary certificate of authority from the commissioner, the society may solicit members for the purpose of completing its organization, shall collect from each applicant the amount of not less than one (1) regular monthly premium in accordance with its table of rates and shall issue to each applicant a receipt for the amount so collected. No society shall incur any liability other than for the return of the advance premium, nor issue any certificate, nor pay or allow, or offer or promise to pay or allow, any benefit to any person until:  Actual bona fide applications for benefits have been secured on not less than five hundred (500) applicants, and any necessary evidence of insurability has been furnished to and approved by the society;   At least ten (10) subordinate lodges have been established into which the five hundred (500) applicants have been admitted;   There has been submitted to the commissioner, under oath of the president or secretary, or corresponding officer of the society, a list of the applicants, giving their names, addresses, date each was admitted, name and number of the subordinate lodge of which each applicant is a member, amount of benefits to be granted and premiums therefor; and   It has been shown to the commissioner, by sworn statement of the treasurer, or corresponding officer of the society, that at least five hundred (500) applicants have each paid in cash at least one (1) regular monthly premium as herein provided, which premiums in the aggregate shall amount to at least one hundred fifty thousand dollars ($150,000). The advance premiums shall be held in trust during the period of organization, and if the society has not qualified for a certificate of authority within one (1) year, as herein provided, the premiums shall be returned to the applicants.     The commissioner may make the examination and require any further information as the commissioner deems advisable. Upon presentations of satisfactory evidence that the society has complied with all law, the commissioner shall issue to the society a certificate of authority to that effect and that the society is authorized to transact business pursuant to this chapter. The certificate of authority shall be prima facie evidence of the existence of the society at the date of the certificate. The commissioner shall cause a record of the certificate of authority to be made. A certified copy of the record may be given in evidence with the like effect as the original certificate of authority.   Any incorporated society authorized to transact business in this state on January 1, 1991, shall not be required to reincorporate.   
  A domestic society may amend its laws in accordance with the provisions thereof by action of its supreme governing body at any regular or special meeting thereof or, if its laws so provide, by referendum. The referendum may be held in accordance with its laws by the vote of the voting members of the society, by the vote of delegates or representative of voting members, or by the vote of local lodges. A society may provide for voting by mail. No amendment submitted for adoption by referendum shall be adopted unless, within six (6) months from the date of submission of the amendment, a majority of the members voting have signified their consent to the amendment by one (1) of the methods specified in this section.   All amendments to the laws of any domestic society shall be filed with the commissioner and shall become operative upon the filing unless a later time be provided in the amendments or in laws of the society.   Within ninety (90) days from the effective date of the amendment, all the amendments, or a synopsis thereof, shall be furnished to all members of the society either by mail or publication in full in the official publication of the society. The affidavit of any officer of the society or of anyone authorized by it to mail any amendments or synopsis, stating facts that show that same have been duly addressed and mailed, shall be prima facie evidence that the amendments or synopsis have been furnished the addressee.   Every foreign or alien society authorized to do business in this state shall file with the commissioner a duly certified copy of all amendments of, or additions to, its laws within ninety (90) days after the enactment of the amendments.   Printed copies of the laws as amended, certified by the secretary or corresponding officer of the society, shall be prima facie evidence of the legal adoption of the laws.   
 A society may create, maintain and operate, or may establish organizations to operate, not-for-profit institutions to further the purposes permitted by  56-25-105(a)(2). The institutions may furnish services free or at a reasonable charge. Any real or personal property owned, held or leased by the society for this purpose shall be reported in every annual statement.  
  No fraternal benefit society organized under the laws of this state to do the business of life, accident, or health insurance shall consolidate or merge with any other fraternal benefit society, or reinsure its insurance risks, or any part thereof, with any other fraternal benefit society, or assume or reinsure the whole or any portion of the risks of any other fraternal benefit society, except as provided in this chapter.   No fraternal benefit society or subordinate body thereof shall merge or consolidate with any company or association not licensed to transact business as a fraternal benefit society.   Each fraternal benefit society subject to this chapter shall comply with  56-2-207  56-2-209 governing reinsurance contracts. In addition, no reinsurance contract of a fraternal benefit society shall cede or assume risks resident of this state if the principal purpose of such reinsurance contract, as determined by the commissioner, is to avoid the tax due under  56-4-205.   
  A domestic society may consolidate or merge with any other society by complying with this section. It shall file with the commissioner:  A certified copy of the written contract containing in full the terms and conditions of the consolidation or merger;   A sworn statement by the president and secretary or corresponding officers of each society showing the financial condition thereof on a date fixed by the commissioner but not earlier than December 31, next preceding the date of the contract;   A certificate of the officers duly verified by their respective oaths, that the consolidation or merger has been approved by a two-thirds (2/3) vote of the supreme governing body of each society, the vote being conducted at a regular or special meeting of each such body, or, if the society's laws so permit, by mail; and   Evidence that at least sixty (60) days prior to the action of the supreme governing body of each society, the text of the contract has been furnished to all members of each society either by mail or by publication in full in the official publication of each society.      If the commissioner finds that the contract is in conformity with this section, that the financial statements are correct and that the consolidation or merger is just and equitable to the members of each society, the commissioner shall approve the contract and issue a certificate to such effect.   Upon such approval, the contract shall be in full force and effect unless any society which is a party to the contract is incorporated under the laws of any other state or territory. In this event, the consolidation or merger shall not become effective unless and until it has been approved as provided by the laws of the state or territory and a certificate of the approval filed with the commissioner of commerce and insurance of this state or, if the laws of the state or territory contain no such provision, then the consolidation or merger shall not become effective unless and until it has been approved by the commissioner of insurance of the state or territory, and a certificate of the approval filed with the commissioner of commerce and insurance of this state.   In case the contract is not approved, it shall be inoperative, and the fact of the submission and its contents shall not be disclosed by the commissioner.     Upon the consolidation or merger becoming effective as provided in this section, all the rights, franchises and interests of the consolidated or merged societies in and to every species of property, real, personal or mixed, and things in action thereunto belonging shall be vested in the society resulting from or remaining after the consolidation or merger without any other instrument, except that conveyances of the real property may be evidenced by proper deeds, and the title to any real estate or interest therein, vested under the laws of this state in any of the societies consolidated or merged, shall not revert or be in any way impaired by reason of the consolidation or merger, but shall vest absolutely in the society resulting from or remaining after the consolidation or merger.   The affidavit of any officer of the society or of anyone authorized by it to mail any notice or document, stating that the notice or document has been duly addressed and mailed, shall be prima facie evidence that the notice or document has been furnished the addressees.    All necessary and actual expenses and compensation incident to the proceedings provided in this section shall be paid as provided by the contract of consolidation or merger.   No brokerage or commission shall be included in the expenses and compensation or shall be paid to any person by either of the parties to any such contract in connection with the negotiation therefor or execution thereof, nor shall any compensation be paid to any officer or employee of either of the parties to the contract for directly or indirectly aiding in effecting the contract of consolidation or merger.   An itemized statement of all the expenses shall be filed with the commissioner, subject to approval, and, when approved, shall be binding on the parties to the contract.   Except as fully expressed in the contract of consolidation or merger, or itemized statement of expenses, as approved by the commissioner or commissioners, as the case may be, no compensation shall be paid to any person or persons, and no officer or employee of the state shall receive any compensation, directly or indirectly, for in any manner aiding, promoting or assisting any such consolidation or merger.     
 Any domestic fraternal benefit society may be converted and licensed as a stock or mutual life insurance company by compliance with all the requirements of this title for stock or mutual life insurance companies. A plan of conversion shall be prepared in writing by the board of directors, setting forth in full the terms and conditions of conversion. The affirmative vote of two thirds (2/3) of all members of the supreme governing body at a regular or special meeting shall be necessary for the approval of the commissioner, who may give approval if the commissioner finds that the proposed change is in conformity with the requirements of law and not prejudicial to the certificate holders of the society.  
  A society may provide the following contractual benefits in any form:  Death benefits;   Endowment benefits;   Annuity benefits;   Temporary or permanent disability benefits;   Hospital, medical or nursing benefits;   Monument or tombstone benefits to the memory of deceased members; and   Such other benefits as authorized for life insurers and that are not inconsistent with this chapter.     A society shall specify in its rules those persons who may be issued, or covered by, the contractual benefits in subsection (a), consistent with providing benefits to members and their dependents. A society may provide benefits on the lives of children under the minimum age for adult membership upon application of an adult person.   
  The owner of a benefit contract has the right at all times to change the beneficiaries in accordance with the laws or rules of the society, unless the owner waives this right by specifically requesting in writing that the beneficiary designation be irrevocable. A society may, through its laws or rules, limit the scope of beneficiary designations and shall provide that no revocable beneficiary shall have or obtain any vested interest in the proceeds of any certificate, until the certificate has become due and payable in conformity with the benefit contract.   A society may make provision for the payment of funeral benefits to the extent of the portion of any payment under a certificate as might reasonably appear to be due to any person equitably entitled thereto by reason of having incurred expenses occasioned by the burial of the member.   If, at the death of any person insured under a benefit contract, there is no lawful beneficiary to whom the proceeds are payable, the amount of the benefit, except to the extent that funeral benefits may be paid as provided in this section, shall be payable to the personal representatives of the deceased insured; provided, that if the owner of the certificate is other than the insured, the proceeds shall be payable to the owner.   
 No money or other benefit, charity, relief or aid to be paid, provided or rendered by any society, shall be liable to attachment, garnishment or other process, or to be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member or beneficiary, or any other person who may have a right thereunder, either before or after payment by the society.  
  Every society authorized to do business in this state shall issue to each owner of a benefit contract a certificate specifying the amount of benefits provided. The certificate, together with any riders or endorsements attached thereto, the laws of the society, the application for membership, the application for insurance and declaration of insurability, if any, signed by the applicant, and all amendments to each thereof, shall constitute the benefit contract, as of the date of issuance, between the society and the owner, and the certificate shall so state. A copy of the application for insurance and declaration of insurability, if any, shall be endorsed upon or attached to the certificate. All statements on the application shall be representations and not warranties. Any waiver of this provision shall be void.   Any changes, additions or amendments to the laws of the society duly made or enacted subsequent to the issuance of the certificate shall bind the owner and the beneficiaries, and shall govern and control the benefit contract in all respects, the same as though the changes, additions or amendments had been made prior to and were in force at the time of the application for insurance, except that no change, addition or amendment shall destroy or diminish benefits that the society contracted to give the owner as of the date of issuance.   Any person upon whose life a benefit contract is issued prior to attaining the age of majority shall be bound by the terms of the application and certificate and by all the laws and rules of the society to the same extent as though the age of majority had been attained at the time of application.    A society shall provide in its laws that if its reserves as to all or any class of certificates become impaired, its board of directors or corresponding body may require that there shall be paid by the owner to the society the amount of the owner's equitable proportion of the deficiency as ascertained by its board, and that if the payment is not made either:  It shall stand as an indebtedness against the certificate and draw interest not to exceed the rate specified for certificate loans under the certificates; or   In lieu of or in combination with subdivision (d)(1)(A), the owner may accept a proportionate reduction in benefits under the certificate.     The society may specify the manner of the election and which alternative is to be presumed if no election is made.     Copies of any of the documents mentioned in this section, certified by the secretary or corresponding officer of the society, shall be received in evidence of the terms and conditions of the society.    No certificate shall be delivered or issued for delivery in this state unless a copy of the form has been filed with and approved by the commissioner in the manner provided for like policies issued by life, accident and sickness insurers in this state.   Every life, accident and sickness, health, sickness, or disability insurance certificate and every annuity certificate shall meet the standard contract provision requirements in this title not inconsistent with this chapter for like policies issued by life, accident and sickness insurers in this state, except that a society may provide for a grace period for payment for premiums of one (1) full month in its certificates.   The certificate shall also contain a provision stating the amount of premiums that are payable under the certificate, and a provision reciting or setting forth the substance of any sections of the society's laws or rules in force at the time of issuance of the certificate which, if violated, will result in the termination or reduction of benefits payable under the certificate.   If the laws of the society provide for expulsion or suspension of a member, the certificate shall also contain a provision that any member so expelled or suspended, except for nonpayment of a premium or within the contestable period for material misrepresentation in the application for membership of insurance, shall have the privilege of maintaining the certificate in force by continuing payment of the required premium.     Benefit contracts issued on the lives of persons below the society's minimum age for adult membership may provide for transfer of control of ownership to the insured at an age specified in the certificate. A society may require approval of an application of membership in order to effect this transfer, and may provide in all other respects for regulation, government and control of the certificates and all rights, obligations and liabilities incident to and connected with the certificates. Ownership rights prior to the transfer shall be specified in the certificate.   A society may specify the terms and conditions on which benefit contracts may be assigned.   
  For certificates issued prior to one (1) year after January 1, 1991, the value of every paid-up nonforfeiture benefit and the amount of any cash surrender, loan or other option granted shall comply with law applicable immediately prior to January 1, 1991.   For certificates issued on or after January 1, 1992, for which reserves are computed on the commissioner's 1941 standard ordinary mortality table, the commissioner's 1941 standard industrial table or the commissioner's 1958 standard ordinary mortality table, or the commissioner's 1980 standard mortality table, or any more recent table made applicable to life insurers, every paid-up nonforfeiture benefit and the amount of any cash surrender value, loan or other option granted shall not be less than the corresponding amount ascertained in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits based upon the tables.   
 A society shall invest its funds only in the investments that are authorized by the laws of this state for the investment of assets of life insurers and subject to the limitations on the investment. Any foreign or alien society permitted or seeking to do business in this state, which invests its funds in accordance with the laws of the state, district, territory, country or province in which it is incorporated, shall be held to meet the requirements of this section for the investment of funds.  
  All assets shall be held, invested and disbursed for the use and the benefit of the society, and no member or beneficiary shall have or acquire individual rights therein or become entitled to any apportionment on the surrender of any part thereof, except as provided in the benefit contract.   A society may create, maintain, invest, disburse and apply any special fund or funds necessary to carry out any purpose permitted by the laws of the society.   A society may, pursuant to resolution of its supreme governing body, establish and operate one (1) or more separate accounts and issue contracts on a variable basis, subject to law regulating life insurers establishing the accounts and issuing the contracts. To the extent the society deems it necessary in order to comply with any applicable federal or state laws, or any rules issued thereunder, the society may adopt special procedures for the conduct of the business and affairs of a separate account; may, for persons having beneficial interest therein, provide special voting and other rights, including, without limitation, special rights and procedures relating to investment policy, investment advisory services, selection of certified public accountants, and selection of a committee to manage the business and affairs of the account; and may issue contracts on a variable basis to which  56-25-404(b) and (d) shall not apply.   
 Except as herein provided, societies are governed by this chapter and are exempt from all other provisions of the insurance laws of this state unless they are expressly designated therein, or unless it is specifically made applicable by this chapter.  
 Every society organized or licensed under this chapter is declared to be a charitable and benevolent institution, and all of its funds are exempt from all and every state, county, district, municipal and school tax other than taxes on real estate and personal property.  
  Standards of valuation for certificates issued prior to January 1, 1992, shall be those provided by the laws applicable immediately prior to January 1, 1991.    The minimum standards of valuation for certificates issued on or after January 1, 1992, shall be based on the following tables:  For certificates of life insurance, the commissioner's 1941 standard ordinary mortality table, the commissioner's 1941 standard industrial mortality table, the commissioner's 1958 standard ordinary mortality table, the commissioner's 1980 standard ordinary mortality table or any more recent table made applicable to life insurers; and   For annuity and pure endowment certificates, for total and permanent disability benefits, for accidental death benefits and for noncancellable accident and health benefits, the tables as are authorized for use by life insurers in this state.     All certificates in subdivision (b)(1) shall be under valuation methods and standards, including interest assumptions, in accordance with the laws of this state applicable to life insurers issuing policies containing like benefits.     The commissioner has the discretion to accept other standards for valuation, if the commissioner finds that the reserves produced thereby will not be less in the aggregate than reserves computed in accordance with the minimum valuation standard herein prescribed. The commissioner has the discretion to vary the standards of mortality applicable to all benefit contracts on substandard lives or other hazardous lives by any society authorized to do business in this state.   Any society, with the consent of the commissioner of the state of domicile of the society and under such conditions, if any, which the commissioner of commerce and insurance of Tennessee may impose, may establish and maintain reserves on its certificates in excess of the reserves required thereunder, but the contractual rights of any benefit member shall not be affected by the excess reserves.   
 Reports shall be filed in accordance with the following provisions:   Every society transacting business in this state shall annually, on or before March 1, unless time has been extended by the commissioner for cause shown, file with the commissioner a true statement of its financial condition, transactions and affairs for the preceding calendar year and pay the fee specified in  56-4-101 for filing the statement. The statement shall be in general form and context as approved by the National Association of Insurance Commissioners for fraternal benefit societies and as supplemented by additional information required by the commissioner;   As part of the annual statement herein required, each society shall, on or before March 1, file with the commissioner a valuation of its certificates in force on December 31 last preceding; provided, that the commissioner has the discretion, for cause shown, to extend the time for filing the valuation, for no more than two (2) calendar months. The valuation shall be done in accordance with the standards specified in  56-25-601. The valuation and underlying data shall be certified by a qualified actuary or, at the expense of the society, verified by the actuary of the department of insurance of the state of domicile of the society; and   A society neglecting to file the annual statement in the form and within the time provided by this section shall forfeit one hundred dollars ($100) for each day during which the neglect continues, and, upon notice by the commissioner to that effect, its authority to do business in this state shall cease while the default continues.   
 Societies that are now authorized to transact business in this state, and all societies hereafter licensed, may continue such business until June 30, 1992. The authority of these societies and all societies hereafter licensed may thereafter be renewed annually, but in all cases to terminate on the succeeding June 30. However, a license so issued shall continue in full force and effect until the new license is issued or specifically refused. For each license or renewal, the society shall pay the commissioner a fee of ten dollars ($10.00). A duly certified copy or duplicate of the license shall be prima facie evidence that the licensee is a fraternal benefit society within the meaning of this chapter.  
  The commissioner, or any person the commissioner may appoint, shall examine any domestic, foreign or alien society transacting or applying for admission to transact business in this state in the same manner as authorized for examination of domestic, foreign or alien insurers. Requirements of notice and an opportunity to respond before findings are made public as provided in the laws regulating insurers shall also be applicable to the examination of societies.   The expense of each examination and of each valuation, including compensation and actual expense of examiners, shall be paid by the society examined or whose certificates are valued, upon statements furnished by the commissioner.   
  No foreign or alien society shall transact business in this state without a license issued by the commissioner.   Any such society desiring admission to this state shall comply substantially with the requirements and limitations of this chapter applicable to domestic societies. Any such society may be licensed to transact business in this state after first having shown to the satisfaction of the commissioner that it has maintained an active bona fide lodge for a period of not less than three (3) years and:  Upon filing with the commissioner:  A duly certified copy of its articles of incorporation;   A copy of its bylaws, certified by its secretary or corresponding officer;   A power of attorney to the commissioner as prescribed in  56-25-701;   A statement of its business under oath of its president and secretary or corresponding officers in a form prescribed by the commissioner, duly verified by an examination made by the supervising insurance official of its home state or other state, territory, province or country, satisfactory to the commissioner;   Certification from the proper officials of its home state, territory, province or country that the society is legally incorporated and licensed to transact business there;   Copies of its certificate forms; and   Other information the commissioner may deem necessary; and     Upon a showing that its assets are invested in accordance with this chapter.     
  When the commissioner, upon investigation, finds that a domestic society:  Has exceeded its powers;   Has failed to comply with any provision of this chapter;   Is not fulfilling its contracts in good faith;   Has a membership of less than four hundred (400) after an existence of one (1) year or more; or   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.      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.   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:  The commissioner finds that the violation complained of has been corrected;   The costs of the action have been paid by the society if the court finds that the society was in default as charged;   The court has dissolved its injunction; and   The commissioner has reinstated the certificate of authority.     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.   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.   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.   
  When the commissioner, upon investigation, finds that a foreign or alien society transacting or applying to transact business in this state:  Has exceeded its powers;   Has failed to comply with any of the provisions of this chapter;   Is not fulfilling its contracts in good faith; or   Is conducting its business fraudulently or in a manner hazardous to its members or creditors or the public;  the commissioner shall notify the society of the 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 its license should not be suspended, revoked or refused.      If on the date the society does not present good and sufficient reason why its authority to do business in this state should not be suspended, revoked or refused, the commissioner may suspend or refuse the license of the society to do business in this state until satisfactory evidence is furnished to the commissioner that the suspension or refusal should be withdrawn, or the commissioner may revoke the authority of the society to do business in this state.   Nothing contained in this section shall be taken or construed as preventing any such society from continuing in good faith all contracts made in this state during the time the society was legally authorized to transact business in this state.   
 No application or petition for injunction against any domestic, foreign or alien society, or lodge thereof, shall be recognized in any court of this state unless made by the attorney general and reporter upon request of the commissioner.  
 Agents of societies shall be licensed in accordance with chapter 6, part 1 of this title regulating the licensing, revocation, suspension or termination of license of resident and nonresident agents.  
 Every society authorized to do business in this state is subject to chapter 8 of this title relating to unfair methods of competition and unfair or deceptive acts or practices. Nothing in those provisions shall be construed as applying to or affecting the right of any society to determine its eligibility requirements for membership, or be construed as applying to or affecting the offering of benefits exclusively to members or persons eligible for membership in the society by a subsidiary corporation or affiliated organization of the society.  
  Every society authorized to do business in this state shall appoint in writing the commissioner and each successor in the office of commissioner to be its true and lawful attorney upon whom all lawful process in any action or proceeding against it shall be served, and shall agree in the writing that any lawful process against it which is served on the attorney shall be of the same legal force and validity as if served upon the society, and that the authority shall continue in force so long as any liability remains outstanding in this state. Copies of the appointment, certified by the commissioner, shall be deemed sufficient evidence thereof and shall be admitted in evidence with the same force and effect as the original thereof might be admitted.   Service shall only be made upon the commissioner, or if absent, upon the person in charge of the commissioner's office. It shall be made in duplicate and shall constitute sufficient service upon the society. When legal process against a society is served upon the commissioner, the commissioner shall forthwith forward one (1) of the duplicate copies by registered mail, prepaid, directed to the secretary or corresponding officer. No such service shall require a society to file its answer, pleading or defense in less than thirty (30) days from the date of mailing the copy of the service to the society. Legal process shall not be served upon a society except in the manner herein provided. At the time of serving any process upon the commissioner, the plaintiff or complainant in the action shall pay to the commissioner a fee of ten dollars ($10.00).   
 All decisions and findings of the commissioner made under this chapter shall be subject to review by proper proceedings in any court of competent jurisdiction in this state.  
   It is an offense to intentionally make a false or fraudulent statement in or relating to any application for membership or for the purpose of obtaining money from or a benefit in a society.   A violation of subdivision (a)(1) is a Class A misdemeanor.     Any person who intentionally makes a false or fraudulent statement in any verified report or declaration under oath required or authorized by this chapter, of any material fact or thing contained in a sworn statement concerning the death or disability of an insured for the purpose of procuring payment of a benefit named in the certificate, commits the offense of perjury and shall be subject to the penalties therefor prescribed by law.    It is an offense to solicit membership for, or in any manner assist in procuring membership in, any society not licensed to do business in this state.   A violation of subdivision (c)(1) is a Class B misdemeanor, punished only by the fine authorized in  40-35-111 for this classification.      It is an offense to intentionally violate, or to neglect or refuse to comply with, the provisions of this chapter for which a penalty is not otherwise prescribed.   A violation of subdivision (d)(1) is a Class B misdemeanor, punished only by the fine authorized in  40-35-111 for such classification.     
  Nothing contained in this chapter shall be so construed as to affect or apply to:  Grand or subordinate lodges of Masons, Odd Fellows, or Knights of Pythias (exclusive of the insurance department of the Supreme Lodge, Knights of Pythias) and the Junior Order of the United American Mechanics (exclusive of the beneficiary degree or insurance branch of the National Council Junior Order United American Mechanics), nor to similar societies that do not issue insurance certificates;   Orders, societies or associations that admit to membership only persons engaged in one (1) or more crafts or hazardous occupations, in the same or similar lines of business, insuring only their own members and their families, and the ladies' societies or ladies' auxiliaries to the orders, societies or associations. No domestic order, society or association that is, on January 1, 1991, operating under a certificate of authority issued by the commissioner shall be exempt by reason of this subdivision (a)(2);   An association of local lodges or a society now doing business in this state that provides death benefits not exceeding five hundred dollars ($500) to any one (1) person, or disability benefits not exceeding three hundred dollars ($300) to any one (1) person, or both, nor to any contracts or reinsurance business on such plan in this state;   Domestic societies that limit their membership to employees of a particular city or town, designated firm, business house or corporation that provide for a death benefit of not more than four hundred dollars ($400) or disability benefits of not more than three hundred fifty dollars ($350) to any person in any one (1) year, or both; or   Domestic societies or associations of a purely religious, charitable or benevolent description, that provide for a death benefit of not more than four hundred dollars ($400) or for disability benefits of not more than three hundred fifty dollars ($350) to any one (1) person in any one (1) year, or both.     Any such society or association described in subdivision (a)(4) or (a)(5) that provides for death or disability benefits for which benefit certificates are issued, and any such society or association included in subdivision (a)(5) that has more than one thousand (1,000) members shall not be exempted from this chapter, but shall comply with all requirements of this chapter.   No society which, by the provisions of this section, is exempt from the requirements of this chapter, except any society described in subdivision (a)(2) shall give or allow, or promise to give or allow, to any person more than one dollar ($1.00) per capita as compensation for procuring new members.   Every society that provides for benefits in case of death or disability resulting solely from accident, and that does not obligate itself to pay natural death or sick benefits, shall have all of the privileges and be subject to all the applicable provisions and regulations of this chapter except that the provisions thereof relating to medical examinations, valuations of benefit certificates, and incontestability do not apply to such society.   The commissioner may require from any society or association, by examination or otherwise, the information that will enable the commissioner to determine whether the society or association is exempt from this chapter.   Societies exempt under this section are also exempt from all other provisions of the general insurance laws of this state.   
 As used in this part, unless the context otherwise requires, accident and sickness insurance includes any policy or contract covering insurance against loss resulting from sickness or from bodily injury or death by accident, or both. The various types of such policies are defined in the following subdivisions:    Blanket accident and sickness insurance means that form of accident and sickness insurance covering special groups of persons as enumerated in one (1) of the following divisions:   Under a policy issued to any common carrier, which shall be deemed the policyholder covering a group defined as all persons who may become passengers on the common carrier;   Under a policy issued to an employer, who shall be deemed the policyholder, covering any group of employees defined by reference to exceptional hazards incident to the employment;   Under a policy issued to a college, school or other institution of learning, or to the head or principal thereof, which or who shall be deemed the policyholder, covering students or teachers;   Under a policy issued in the name of any volunteer fire department or first aid or other similar volunteer group, which shall be deemed the policyholder, covering all of the members of the department or group; or   Under a policy issued to any other substantially similar group which, in the discretion of the commissioner, may be subject to the issuance of a blanket accident and sickness policy.     An individual application is not required from a person covered under a blanket accident and sickness policy, nor is it necessary for the insurer to furnish each person a certificate;     Cancellable or renewable at option of company refers to and may be used only in policies under which the company reserves the right to cancel or nonrenew the policy of any individual insured either on any date on which a premium becomes due, or on the policy anniversary, or at any other date subject to refund of any unearned premium;   Commissioner means the commissioner of commerce and insurance;   Franchise accident and sickness insurance means that form of accident and sickness insurance issued to either of the following:  Three (3) or more employees of any corporation, copartnership or individual employer or any governmental corporation, agency or department thereof; or   Ten (10) or more members of any trade or professional association or of a labor union or of any other association having had an active existence for at least two (2) years where the association or union has a constitution or bylaws and is formed in good faith for purposes other than that of obtaining insurance; where the employees or members, with or without their dependents, are issued the same form of an individual policy varying only as to amounts and kinds of coverage applied for by the employees or members, under an arrangement whereby the premiums on the policies may be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association or union for its members, or by some designated person acting on behalf of the employer, association or union; and     Individual market has the same meaning given in  2791(e)(1)(A) of the Public Health Service Act (42 U.S.C.  300gg-91);    Noncancellable or noncancellable and guaranteed renewable or synonymous terms such as guaranteed continuable may be used only in a policy, which the insured has the right to continue in force by the timely payment of premiums set forth in the policy:   Until at least age fifty (50); or   In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force.     Except as provided in subdivision (6)(A), guaranteed renewable may be used only in a policy that the insured has the right to continue in force by the timely payment of premiums:   Until at least age fifty (50); or   In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by classes.     The limitation in subdivision (6)(A) on use of noncancellable also applies to any synonymous term such as not cancellable, and the limitation in subdivision (6)(B) on use of guaranteed renewable applies to any synonymous term such as guaranteed continuable;     Small employer has the same meaning given in  56-7-2203. However, for purposes of qualifying to establish a liability pool under  56-26-204(a), all employees of all member employers participating in the provision of health insurance coverage must be included in the number of eligible employees; and   Written approval includes an electronic approval.   
   No policy of accident and sickness insurance for individual or small employer coverage shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, certificate or application nor any initial or new premium rates on any previously approved policy, endorsement, rider, certificate or application that becomes a part of any such policy be used in connection with the policy until a copy of the form, of the premium rates, and of the classifications of risk pertaining to the policy has been filed with and approved by the commissioner. Approval of such forms, rates, and classifications may be granted in whole or in part at the discretion of the commissioner.   No approval shall be issued by the commissioner pursuant to this section unless the commissioner determines that the benefits provided in the policy are reasonable in relation to the premium charged based upon reasonable rules promulgated by the commissioner.   Within thirty (30) days of receiving an insurer's filing, if the commissioner has not previously issued notice of either approval or disapproval related to the insurer's filing, either the commissioner or the insurer may initiate an informal conference between the parties to seek additional information or responsive material from the other in order to resolve any outstanding matters related to the filing. In no event shall such period of conference extend beyond sixty (60) days of the commissioner's receipt of the insurer's original filing. At a date no later than sixty (60) days from the receipt of the insurer's original filing the commissioner shall issue either a notice of approval or disapproval regarding the insurer's filing unless the insurer and the commissioner mutually agree in writing to an extension not to exceed one hundred twenty (120) days from the receipt of the insurer's original filing.   No policy, endorsement, rider, certificate or application shall be issued until the filing has been approved by the commissioner as provided in this section. The commissioner shall notify, in writing, the filer if the form or rates do not comply with this chapter and are therefore disapproved, specifying the reasons for the commissioner's determination. After such notice, it is unlawful for the filer to issue the form or rates in this state.   In a notice issued under subdivision (a)(4), the commissioner shall state that a hearing shall be granted upon written request by the insurer. The insurer has thirty (30) days to submit a written request for a hearing. If a hearing is requested, then such hearing shall be held within thirty (30) days of receipt by the commissioner of the written request. Any hearing conducted shall be conducted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.     In accordance with regulations issued by the commissioner, medical loss ratio information shall be provided for each medical loss ratio reporting year by all accident and sickness insurers. If, pursuant to federal or state law, the accident and sickness insurer is required to provide a rebate based upon medical loss ratio requirements, the insurer shall notify the commissioner within ten (10) days of becoming aware of such rebate. The commissioner at that time shall evaluate the solvency and financial impact of such rebate. The commissioner retains the right to intervene with the secretary of the United States department of health and human services on behalf of an insurer deemed to be financially unsound to request that the secretary of the United States department of health and human services defer all or a portion of the rebate payments owed by the insurer.   Subsequent to January 1, 2012, all filings submitted pursuant to this section shall be filed electronically; provided, however, that the commissioner may in certain circumstances, in the commissioner's own discretion, waive the electronic filing requirement. The commissioner may designate an entity to receive the electronic filings submitted pursuant to this section.   The requirements of this section shall supersede and replace all other requirements related to the filing, approval and disapproval of major medical health insurance premium rates. As used in this section, major medical health insurance premium rates shall include any individual or small employer coverage as offered by an issuer of accident and sickness insurance, a nonprofit hospital and medical service corporation, medical service corporation, a hospital service corporation, and a health maintenance organization. As used in this section, major medical health insurance shall not include any policy as described by  2791(c) of the Public Health Service Act (42 U.S.C.  300gg-91(c)). In the event that conflicts exist between this section and another provision in this title, this section shall govern.   The provisions of this chapter are severable. If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application.   
 The commissioner may, at any time after a hearing of which not less than twenty (20) days' written notice has been given to the insurer, withdraw approval of any such form if it contains a provision for benefits that is misleading, deceptive or that would encourage misrepresentation of the policy, or if, after consideration of all relevant factors, the commissioner finds that the benefits provided by the policy are unreasonable in relation to the premium charged. It is unlawful for the insurer to issue the form or use it in connection with any policy after the effective date of the withdrawal of approval. A notice of any hearing called under  56-26-102, this section and  56-26-104  56-26-105 shall specify the matters to be considered at the hearing, and any decision affirming disapproval or directing withdrawal of approval under  56-26-102, this section and  56-26-104  56-26-105 shall be in writing and shall specify the reasons for the decision.  
 The commissioner shall not disapprove or withdraw approval of any such policy on the ground that its provisions do not comply with  56-26-108  56-26-114 or on the ground that it is not printed in uniform type, if it is shown that the rights of the insured or the beneficiary under the policy as a whole are not less favorable than the rights provided by  56-26-108  56-26-114, and that the provisions or type size used in the policy are required in the state, district or territory of the United States in which the insurer is organized, anything in  56-26-102  56-26-105 to the contrary notwithstanding.  
 Any order or decision of the commissioner under  56-26-102  56-26-104 and this section shall be subject to review in the manner provided by title 27, chapter 9, pertaining to the statutory writ of certiorari.  
 No policy of sickness and accident insurance shall be delivered or issued for delivery to any person in this state, unless:   The entire money and other considerations therefor are expressed in the policy;   The time at which the insurance takes effect and terminates is expressed in the policy;   The policy purports to insure only one (1) person, except that a policy may insure, originally or by subsequent amendment upon the application of an adult member of a family who shall be deemed the policyholder, any two (2) or more eligible members of that family, including husband, wife, dependent children or any children under a specified age that shall not exceed nineteen (19) years, and any other person dependent upon the policyholder;   The style, arrangement, and overall appearance of the policy and any endorsements or attached papers give no undue prominence to any portion of the text. For purposes of this subdivision (4), text includes all printed matter except the name and address of the insurer, the name or title of the policy, and captions and subcaptions;   The exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in  56-26-108  56-26-114, are printed, at the insurer's option, either included with the benefit provision to which they apply or under an appropriate caption such as EXCEPTIONS or EXCEPTIONS AND REDUCTIONS; provided, that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of the exception or reduction shall be included with the benefit provision to which it applies;   Each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page of the form;   The policy contains no provision purporting to make any portion of the charter, rules, constitution or bylaws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the commissioner; and   If the policy is a limited policy, which is defined as a policy that contains unusual exclusions, limitations, restrictions, reductions in benefits or conditions of such a nature that the payments of benefits under the policy are thereby substantially limited in frequency or in amount, it shall be so identified by having the words THIS IS A LIMITED POLICY  READ IT CAREFULLY imprinted diagonally across the face of the policy and the filing back in contrasting color from the text of the policy and in outline type not smaller than eighteen-point, or words which, in the opinion of the commissioner, have substantially the same meaning and effect; when appropriate, these words may be varied by the insurer in a manner to indicate the type of policy; as for example, THIS POLICY IS LIMITED TO CANCER ONLY  READ IT CAREFULLY.   
 If any policy is issued by an insurer domiciled in this state for delivery to a person residing in another state, and if the official having responsibility for the administration of the insurance laws of such other state has advised the commissioner  that any such policy is not subject to approval or disapproval by the official, the commissioner may by ruling require that the policy meet the standards set forth in  56-26-106 and in  56-26-108  56-26-114.  
 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.   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.   Time Limit on Certain Defenses.    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.   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.     A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium:   Until at least age fifty (50); or   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.     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.     Grace Period.  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.   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.   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.     Reinstatement.  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.   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:   Until at least fifty (50) years of age; or   In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue.       Notice of Claim.  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.   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.      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.   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.   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.   Payment of Claims.  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.   The following provisions, or either of them, may be included with the provision in subdivision (9)(A) at the option of the insurer:   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;   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   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.       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.   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.   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.   
 Except as provided in  56-26-110, no such policy delivered or issued for delivery to any person in this state shall contain provisions respecting the matters set forth in subdivisions (1)-(11), unless the provisions are in the substance of the words in which the same appear in this section; provided, that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording, approved by the commissioner, which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate 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.   Change of Occupation.  If the insured be injured or contract sickness after having changed occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only the portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for the more hazardous occupation. If the insured changes occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of the change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of the proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if the filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in that state prior to the occurrence of the loss or prior to the date of proof of change in occupation.   Misstatement of Age.  If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age.   Other Insurance in This Insurer.  If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for  (insert type of coverage or coverages) in excess of $  (insert maximum limit of indemnity or indemnities) the excess insurance shall be void and all premiums paid for the excess shall be returned to the insured or to the insured's estate or, in lieu thereof:  Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one (1) such policy elected by the insured, the insured's beneficiary or the insured's estate, as the case may be, and the insurer will return all premiums paid for all other such policies.    Insurance with Other Insurer.  If there is other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for the proportion of the loss as the amount that would otherwise have been payable hereunder, plus the total of the like amounts under all such other valid coverages for the same loss that this insurer had notice bears to the total like amounts under all valid coverages for the loss, and for the return of the portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the like amount of the other coverage shall be taken as the amount that the services rendered would have cost in the absence of the coverage.  If the foregoing policy provision is included in a policy that also contains the next following policy provision, there shall be added to the caption of the foregoing provision the phrase EXPENSE INCURRED BENEFITS. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and by hospital or medical service organizations, and to any other coverage, the inclusion of which may be approved by the commissioner. In the absence of the definition, the term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for the insured pursuant to any compulsory benefit statute (including any workers' compensation or employer's liability statute), whether provided by a governmental agency or otherwise, shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision, no third-party liability coverage shall be included as other valid coverage.    Insurance with Other Insurers.  If there is other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for the benefits under this policy shall be for the proportion of the indemnities otherwise provided hereunder for the loss as the like indemnities of which the insurer had notice, including the indemnities under this policy, bear to the total amount of all like indemnities for the loss, and for the return of the portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined.   If the policy provision in subdivision (5)(A) is included in a policy that also contains the next preceding policy provision, there shall be added to the caption of the foregoing provision the phrase  OTHER BENEFITS. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the commissioner. In the absence of the definition, the term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for the insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, whether provided by a governmental agency or otherwise shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision, no third-party liability coverage shall be included as other valid coverage.     Relation of Earnings to Insurance.  If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, exceeds the monthly earnings of the insured at the time disability commenced or the insured's average monthly earnings for the period of two (2) years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for the proportionate amount of the benefits under this policy as the amount of the monthly earnings or the average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time the disability commences and for the return of the part of the premiums paid during the two (2) years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of two hundred dollars ($200), or the sum of the monthly benefits specified in the coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time.  The policy provision in this subdivision (6)(A) may be inserted only in a policy that the insured has the right to continue in force, subject to its terms by the timely payment of premiums:    Until at least age fifty (50); or   In the case of a policy issued after age forty-four (44), for at least five (5) years from its date of issue.    The insurer may, at its option, include in this provision a definition of valid loss of time coverage, approved as to form by the commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this, or any other state of the United States or any province of Canada, or to any other coverage, the inclusion of which may be approved by the commissioner, or any combination of the coverages. In the absence of the definition, the term shall not include any coverage provided for the insured pursuant to any compulsory benefit statute, including any workers' compensation or employer's liability statute, or benefits provided by union welfare plans or by employer or employee benefit organization.    Overinsurance.  After the loss-of-time benefit of this policy has been payable for ninety (90) days, the benefit will be adjusted, as provided below, if the total amount of unadjusted loss-of-time benefits provided in all valid loss-of-time coverage upon the insured should exceed (insert amount) percent of the insured's earned income; provided, that if the information contained in the application discloses that the total amount of loss-of-time benefits under this policy and under all other valid loss-of-time coverage expected to be effective upon the insured in accordance with the application for this policy exceeded (insert amount) percent of the insured's earned income at the time of the application, the higher percentage will be used in place of (insert amount) percent. The adjusted loss-of-time benefit under this policy for any month shall be only the proportion of the loss-of-time benefit otherwise payable under this policy as (i) the product of the insured's earned income and (insert amount) percent (or, if higher, the alternative percentage described at the end of the first sentence of this provision) bears to (ii) the total amount of loss-of-time benefits payable for the month under this policy and all other valid loss-of-time coverage on the insured (without giving effect to the overinsurance provision in this or any other coverage) less in both (i) and (ii) any amount of loss-of-time benefits payable under other valid loss-of-time coverage that does not contain an overinsurance provision. In making the computation, all benefits and earnings shall be converted to a consistent [insert weekly if the loss-of-time benefit of this policy is payable weekly, monthly if the benefit is payable monthly, etc.] basis. If the numerator of the foregoing ratio is zero (0) or is negative, no such benefit shall be payable under this policy. In no event shall this provision operate to reduce the total combined amount of loss-of-time benefits for the month payable under this policy, and all other valid loss-of-time coverage below the lesser of three hundred dollars ($300), or the total combined amount of loss-of-time benefits determined without giving effect to any overinsurance provision, or operate to increase the amount of benefits payable under this policy above the amount that would have been paid in the absence of this provision, or take into account or operate to reduce any benefit other than the loss-of-time benefit.  For purposes of this provision:    Earned income, except where otherwise specified, means the greater of the monthly earnings of the insured at the time disability commences and the insured's average monthly earnings for a period of two (2) years immediately preceding the commencement of disability, and shall not include any investment income or any other income not derived from the insured's vocational activities.   Overinsurance provision includes this provision and any other provision with respect to any loss-of-time coverage that may have the effect of reducing an insurer's liability if the total amount of loss-of-time benefits under all coverage exceeds a stated relationship to the insured's earnings.     The policy provision in subdivision (6)(B) may be inserted only in a policy that provides a loss-of-time benefit that may be payable for at least fifty-two (52) weeks, which is issued on the basis of selective underwriting of each individual application, and for which the application includes a question designed to elicit information necessary either to determine the ratio of the total loss-of-time benefits of the insured to the insured's earned income or to determine that the ratio does not exceed the percentage of earnings, not less than sixty percent (60%) selected by the insurer and inserted in lieu of the blank factor above. The insurer may require, as part of the proof of claim, the information necessary to administer this provision. If the application indicates that other loss-of-time coverage is to be discontinued, the amount of the other coverage shall be excluded in computing the alternative percentage in the first sentence of the overinsurance provision. The policy shall include a definition of valid loss-of-time coverage approved as to form by the commissioner, which definition may include coverage provided by governmental agencies and by organizations subject to regulation by insurance law and by insurance authorities of this or any other state of the United States, or of any other country or subdivision thereof, coverage provided for the insured pursuant to any disability benefits statute or any workers' compensation or employer's liability statute, benefits provided by labor-management trusteed plans or union welfare plans or by salary continuance or pension programs, and any other coverage, the inclusion of which may be approved by the commissioner.   If by application of any of the policy provisions in (6)(B) the insurer effects a material reduction of benefits otherwise payable under the policy, the insurer shall refund, for the period two (2) years preceding the disability for which a claim is made, any premium unearned on the policy by reason of the reduction of coverage, subject to the insurer's right to provide in the policy that no such reduction of benefits or refund will be made unless the unearned premium to be so refunded amounts to five dollars ($5.00) or such larger sum as the insurer may so specify.     Unpaid Premium.  Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom.   Cancellation.  The insurer may cancel this policy at any time by written notice delivered to the insured, or mailed to the insured's last address as shown by the records of the insurer, stating when, not less than five (5) days thereafter, the cancellation shall be effective; and after the policy has been continued beyond its original term, the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on the later date as may be specified in the notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.   Conformity with State Statutes.  Any provision of this policy that, on its effective date, is in conflict with the statutes of the state in which the insured resides on the effective date is hereby amended to conform to the minimum requirements of those statutes.   Illegal Occupation.  The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony, or to which a contributing cause was the insured's being engaged in an illegal occupation.   
 If any provision of  56-26-108  56-26-114 is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the commissioner, shall omit from the policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy.  
 The provisions that are the subject of  56-26-108 and 56-26-109, or any corresponding provisions that are used in lieu thereof in accordance with such sections, shall be printed in the consecutive order of the provisions in the sections or, at the option of the insurer, any such provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related; provided, that the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued.  
 Insured, as used in this chapter, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for, and owning a policy covering the insured, or from being entitled under such a policy to any indemnities, benefits and rights provided in the policy.  
  Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this state, may contain any provision that is not less favorable to the insured or the beneficiary than the provisions of this chapter and that is prescribed or required by the law of the state under which the insurer is organized.   Any policy of a domestic insurer may, when issued for delivery in any other state or country, contain any provision permitted or required by the laws of the other state or country.   
 The commissioner may make reasonable rules and regulations concerning the procedure for the filing or submission of policies subject to this chapter as are necessary, proper or advisable to the administration of this chapter. This section shall not abridge any other authority granted the commissioner by law.  
 No policy provision that is not subject to  56-26-108  56-26-114 shall make a policy or any portion thereof less favorable in any respect to the insured or the beneficiary than the provisions that are subject to this chapter.  
  A policy delivered or issued for delivery to any person in this state in violation of this chapter shall be held valid but shall be construed as provided in this chapter.   When any provision in a policy subject to this chapter is in conflict with any provision of this chapter, the rights, duties and obligations of the insurer, the insured and the beneficiary shall be governed by this chapter.   
 The insured shall not be bound by any statement made in an application for a policy unless a copy of such application is attached to or endorsed on the policy when issued as part of the policy. If any such policy delivered or issued for delivery to any person in this state is reinstated or renewed, and the insured or the beneficiary or assignee of the policy makes written request to the insurer for a copy of the application, if any, for the reinstatement or renewal, the insurer shall within fifteen (15) days after the receipt of the request at its home office or any branch office of the insurer, deliver or mail to the person making the request a copy of the application. If the copy is not so delivered or mailed, the insurer shall be precluded from introducing the application as evidence in any action or proceeding based upon or involving the policy or its reinstatement or renewal.  
 No alteration of any written application for any such policy shall be made by any person other than the applicant without the applicant's written consent, except that insertions may be made by the insurer, for administrative purposes only, in such manner as to indicate clearly that the insertions are not to be ascribed to the applicant.  
 The falsity of any statement in the application for any policy covered by this chapter may not bar the right to recovery thereunder unless the false statement materially affected either the acceptance of the risk or hazard assumed by the insurer and then not if the agent taking the application knew of the falsity.  
 The acknowledgment by any insurer of the receipt of notice given under any policy covered by this chapter, the furnishing of forms for filing proofs of loss, the acceptance of the proofs or the investigation of any claim thereunder, shall not operate as a waiver of any of the rights of the insurer in defense of any claim arising under the policy.  
 If any such policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if the date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after the date, the coverage provided by the policy will continue in force subject to any right of cancellation until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased prior to the acceptance of the premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy.  
  Except as provided in subsection (b), nothing in this chapter applies to, or shall affect:  Any policy of workers' compensation insurance or any policy of liability insurance with or without supplementary expense coverage in such policy;   Any policy or contract of reinsurance;   Any blanket or group insurance policy; or   Life insurance or annuity contracts, or contracts supplemental thereto, that contain only the provisions relating to accident and sickness insurance as:  Provide additional benefits in case of death or dismemberment or loss of sight by accident; or   Operate to safeguard the contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant shall become totally and permanently disabled, as defined by the contract.       Sections 56-26-101  56-26-103 and 56-26-105 apply to any blanket or group insurance policy.   
  Any person, partnership or corporation willfully violating any provision of this chapter or order of the commissioner made in accordance with this chapter shall forfeit to this state a sum not to exceed one thousand dollars ($1,000) for each violation, which may be recovered by a civil action.   The commissioner may also suspend or revoke the license of an insurer or agent for any willful violation.   
 No policy of sickness and accident insurance delivered or issued for delivery to any person in this state on or after January 1, 1975, including both individual policies and group policies, shall exclude covered benefits because the insured is a patient hospitalized in a tax supported institution of this state or any county or municipality; provided, that the institution charges patients for the same services in the absence of insurance.  
 No policy of accident, sickness or hospital insurance that is cancellable by the insurer shall be delivered or issued for delivery to any person in this state unless the policy shall show conspicuously on the face thereof the words POLICY CANCELLABLE BY COMPANY, or similar wording which, in the opinion of the commissioner, has substantially the same meaning and effect.  
 No policy of accident, sickness or hospital insurance in which the insurer reserves the right to refuse renewal thereof shall be delivered or issued for delivery to any person in this state unless the policy shall show conspicuously on the face thereof the words, RENEWABLE AT OPTION OF COMPANY, or similar wording which, in the opinion of the commissioner, has substantially the same meaning and effect.  
 Sections 56-26-125 and 56-26-126 do not apply to such policies issued on a group or franchise basis.  
 Any person, firm, partnership or corporation willfully violating any provision of  56-26-125 or  56-26-126 shall be liable for the civil penalty provided in  56-26-123.  
 Every individual accident and health policy or contract shall have printed thereon or attached thereto a notice stating in substance that the person to whom the policy or contract is issued shall be permitted to return it within ten (10) days of its delivery to the purchaser and to have the premium paid by the purchaser refunded if, after examination of the policy or contract, the purchaser is not satisfied with it for any reason. If a policyholder or purchaser pursuant to the notice returns the policy or contract to the company at its home office or to the agent through whom it was purchased, it shall be void from the beginning and the parties shall be in the same position as if no policy or contract had been issued.  
 The commissioner shall cause to be prepared a booklet, the subject of which shall be health insurance advice for senior citizens. The purpose of this booklet shall be to help senior citizens in deciding whether or not to purchase health insurance to supplement medicare coverage.  
  This chapter shall not be interpreted or construed to deny coverage of any sole proprietor or partner under any individual or group accident and sickness policy such person may have in effect, in cases where the sole proprietor or partner has elected not to be covered by the Workers' Compensation Law, compiled in title 50, chapter 6, for injuries sustained by the person that would have been covered by the Workers' Compensation Law, had the sole proprietor or partner elected to come within the provisions of the Workers' Compensation Law, as provided in  50-6-102.   Nothing in this section shall require coverage of occupational injuries or sicknesses, if such are not covered under the terms of the policy without reference to eligibility for workers' compensation benefits.   
 No health care plan required to be established in this state through an exchange pursuant to federal health care reform legislation enacted by the 111th Congress shall offer coverage for abortion services. For purposes of this section, abortion has the same meaning as defined in  39-15-201.  
 As used in this part:   Employees includes the officers, managers and employees of the employer, the individual proprietor or partner if the employer is an individual proprietor or partnership, the officers, managers and employees of subsidiary or affiliated corporations, and the individual proprietors, partners and employees of individuals and firms, if the business of the employer and the individual or firm is under common control through stock ownership, contract, or otherwise. Employees may include retired employees. A policy issued to insure employees of a public body may provide that employees include elected or appointed officials. The policy may provide that employees include the trustees or their employees, or both, if their duties are principally connected with the trusteeship of the policy; and   Group accident and health insurance means that form of accident and health insurance covering groups of persons as defined in the policy, with or without one (1) or more members of their families or one (1) or more of their dependents, or covering one (1) or more members of the families or one (1) or more dependents, under a policy issued to an employer or trustees of a fund established by an employer, or to an association or other organization that qualifies under  56-26-204(a) to establish a liability pool, a labor union or the trustees of a fund established by a labor union or an association, or the trustees of a fund established by two (2) or more employers in the same or related industry, or by one (1) or more labor unions or by one (1) or more employers and one (1) or more labor unions, or to a creditor or vendor in connection with a credit transaction (except for insurance regulated by or provided for in  56-7-901), who shall be deemed the policyholder, insuring employees of the employer for the benefit of persons other than the employer, or insuring members or employees of the association or labor union for the benefit of persons other than officers of the association or labor union, or insuring employees of the employers or members of the unions, for the benefit of persons other than the employers or the unions, or insuring the debtors of the creditor or vendor to reduce the unpaid indebtedness of the debtor or vendee to the extent of payment of the benefits under the policy (except for insurance regulated by or provided for in  56-7-901).   
  Except as otherwise required by  56-26-102, no policy of group accident and sickness insurance shall be delivered or issued for delivery in this state, unless the policy form and rates have been filed with and approved by the commissioner; provided, that in the case of experience-rated group insurance, premium rates and classifications of risk need not be filed, but shall be maintained by the insurance company and made available for review by the commissioner upon the commissioner's request; nor shall any such policy, endorsement, rider or application be issued until the earlier of the expiration of thirty (30) days after the form or rates have been filed or the commissioner giving the commissioner's written approval. The commissioner is authorized to promulgate rules necessary to implement the standards set out in this subsection (a).   The policy must contain, in substance, the following provisions:  A provision that the policy, the application of the employer, or executive officer or trustee of any association or labor union, and the individual applications, if any, of the employees, members or employees of members insured shall constitute the entire contract between the parties, and that all statements made in the applications shall, in the absence of fraud, be deemed representations and not warranties, and that no such statement shall be used in defense of a claim under the policy unless it is contained in a written application;   A provision that the insurer will issue to the policyholder for delivering to the persons insured under the policy, an individual certificate setting forth the benefits and the exceptions thereunder and referring to the master policy under which the coverage is provided; and   A provision that to the group or class thereof originally insured there shall be added from time to time all persons becoming newly eligible for and applying for insurance in the group or class.     
 When a husband and wife are both employed by the same employer, and both have enrolled themselves and their eligible family members under their employer's group accident and health insurance policy issued in this state after April 2, 1981, each spouse may claim on the person's own behalf, or on behalf of the person's enrolled dependents, the combined maximum contractual benefits to which an employee is entitled under the terms of the group policy, not to exceed in the aggregate one hundred percent (100%) of the expenses incurred.  
   Two (2) or more member employers of the same trade or professional organization with at least five hundred (500) covered lives may enter into an agreement to pool their liabilities under this chapter for the purpose of qualifying as self-insurers. The trade or professional association must:  Have a constitution or bylaws;   Have members that support the association by regular payment of dues on an annual, semiannual, quarterly, or monthly basis; and   Have at least one (1) substantial business purpose unrelated to offering and providing health insurance coverage or other employee benefits to its employer members and their employees. However, offering and providing such coverage or benefits may serve as the professional association's primary purpose.      Ten (10) or more employers of the same nonprofit business coalition for health, organized in this state, may enter into an agreement with the coalition to pool their liabilities under this chapter for the purpose of qualifying as self-insurers. The business coalition must:   Have a charter or bylaws;   Have members who support the coalition by regular payment of dues on an annual, semiannual, quarterly, or monthly basis; and   Have at least one (1) substantial business purpose unrelated to offering and providing health insurance coverage or other employee benefits to its employer members and their employees. However, offering and providing such coverage or benefits may serve as the coalition's primary purpose.     A nonprofit business coalition for health does not qualify as a self-insurer under this subdivision (a)(2) until the department of commerce and insurance has promulgated the rules authorized by subsection (b).     Two (2) or more member employers with at least five hundred (500) covered lives may enter into an agreement to pool their liabilities under this chapter for the purpose of qualifying as self-insurers if the employers are members of the same association that has a principal office within this state. The association must:  Have a constitution or bylaws;   Have members that support the association by regular payment of dues on an annual, semiannual, quarterly, or monthly basis; and   Have at least one (1) substantial business purpose unrelated to offering and providing health insurance coverage or other employee benefits to its employer members and their employees. However, offering and providing such coverage or benefits may serve as the association's primary purpose.     Two (2) or more member employers with at least five hundred (500) covered lives may enter into an agreement to pool their liabilities under this chapter for the purpose of qualifying as self-insurers if the employers are members of the same association that has a principal office within a municipality with a boundary that lies at least partially within this state. The association must:  Have a constitution or bylaws;   Have members that support the association by regular payment of dues on an annual, semiannual, quarterly, or monthly basis;   Have at least one (1) substantial business purpose unrelated to offering and providing health insurance coverage or other employee benefits to its employer members and their employees. However, offering and providing such coverage or benefits may serve as the association's primary purpose;   Adhere to any multi-state compact applicable to its establishment and operation; and   Establish eligibility standards for membership in the association, subject to the requirements of this chapter.       The commissioner of commerce and insurance has the authority to promulgate rules in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, as deemed necessary to provide for the solvency, administration, examination, and enforcement of the pooling agreements. However, such rules must not prohibit or deter any association lawfully formed under the laws of this state or any other state from offering health insurance coverage to its members within this state if the health insurance coverage complies with federal law. To the extent deemed necessary by the commissioner, each employer member of the approved group must be classified as a self-insurer as otherwise provided in this chapter.   Pools created under this section are subject to taxation under chapter 4 of this title, filing and approval under this chapter, and laws for protection of policyholders under chapter 7 of this title.   Notwithstanding any law to the contrary, a pool created under this section by an association of private, not-for-profit educational institutions, whose association having been in existence for twenty-five (25) years or more, is exempt from taxation under chapter 4, part 2 of this title.   
 As used in this part, unless the context otherwise requires:   Administrator means any person, company, corporation, partnership, association or legal entity collecting charges or premiums from, or adjusting or settling claims on, residents of this state in connection with health insurance coverage;   Charge data means information and figures concerning the dollar amount billed by hospitals to patients on account of care, services, goods, accommodations, facilities and equipment furnished by or in a hospital; provided, that charge data only includes categorical information and figures and does not include information and figures concerning individual patients;   Commissioner means the commissioner of commerce and insurance;   Hospital means any institution, place, building or agency as defined by  68-11-201 and subject to  68-11-201  68-11-219;   Insurer means any person authorized to transact the business of insurance under this title; and   Major purchasers means persons who have health insurance coverage and who consist of one hundred (100) employees or more under a group plan of insurance; or any experience rated group regardless of size.   
  Insurers and administrators shall provide charge data by hospital and by diagnostic category when requested by major purchasers.   Charge data shall be provided under rules and regulations promulgated under  56-26-305.   
 The requirements to furnish charge data pursuant to  56-26-302 are subject to the cost data being reasonably available as determined by the commissioner.  
 Any person furnishing charge data pursuant to the requirements of this part shall be immune from any civil liability or damages claimed by any person by reason of actions in compliance with this part.  
 The commissioner has the power and authority to enforce this part, including the power to promulgate reasonable rules and regulations, including, but not limited to:   Diagnostic categories that will be used;   Information that major purchasers may receive;   Fees that major purchasers may reasonably be charged for data requests;   Conditions under which data may be deemed to be reasonably available;   Information that must be reported and in what format or form; and   Any other matter necessary to implement this part.   
 This chapter shall be known and may be cited as the Medical Service Plan Law, 1945.  
 As used in this chapter, unless the context otherwise requires:   Beneficiary means a person designated in the subscription certificate referred to in subdivision (9), as entitled to the medical services referred to in subdivision (9);   Commissioner means the commissioner of commerce and insurance;   Covered dependent is the spouse, an adult dependent or child of a subscriber who is named in the subscription certificate issued to the subscriber, and with respect to whom appropriate premium is specified in the certificate;   Medical service plan means a plan or arrangement under which medical services are or may be rendered to a subscriber, a covered dependent or other beneficiary by a licensed physician and surgeon at the expense of a medical service plan corporation or other person, in consideration of periodical prepayments made by the subscriber or another in the subscriber's behalf prior to the occurrence of the condition calling for the rendition of medical or surgical services;   Medical service plan corporation means a corporation organized without capital stock and not for profit, and incorporated in accordance with  56-27-103, specifically for the purpose of establishing, maintaining and operating a nonprofit medical service plan;   Medical services means the general and usual services and care rendered and administered by doctors of medicine. Medical services does not include hospital services;   Participating physician means a doctor of medicine licensed to practice medicine and surgery in this state under title 63, chapter 6, who agrees in writing with a medical service plan corporation to perform the medical services specified in the subscription certificates issued by the corporation, and at the rates of compensation as shall be determined by the board of directors of the corporation, and who agrees to abide by the bylaws, rules and regulations of the corporation applicable to participating physicians;   Person includes a natural person, a copartnership, an association, a common-law trust or a corporation; and   Subscriber means a person to whom a subscription certificate is issued by a medical service plan corporation that sets forth the beneficiaries and the kinds and extent of the medical services for which the corporation is liable to make payment.   
 Nine (9) natural persons of full age and of either sex, all of whom are residents of this state and citizens of the United States, and at least a majority of whom are doctors of medicine licensed to practice medicine and surgery in this state, may form, under the laws of this state relating to benevolent corporations, so far as these laws are applicable and are not inconsistent with this chapter, a nonprofit medical service plan corporation for the purpose of establishing and operating a medical service plan or plans. The corporation shall be subject to regulation and supervision by the commissioner and is expressly made subject to the applicable insurance laws of this code.  
 The articles of incorporation of the corporation and amendments to the articles shall be submitted to the commissioner, and shall be subject to the commissioner's approval, which shall be endorsed on the articles or the amendments before they are filed with the secretary of state; provided, that if the articles of incorporation of the corporation have been filed with the secretary of state prior to February 27, 1945, the approval of the articles by the commissioner shall be evidenced by a separate instrument in writing filed with the secretary of state.  
 A medical service plan corporation shall consist of a board of directors and of members, grouped in reasonable classes as the bylaws of the corporation as approved by the commissioner shall provide. The business of the corporation shall be managed by a board of directors of nine (9) persons possessing the same general qualifications as the incorporators, and selected by the members in the manner set out in the bylaws, for three-year terms. Five (5) members of the board shall be licensed doctors of medicine, nominated by the medical societies having territorial jurisdiction in the county in which the corporation has authority to operate, and the other four (4) members shall be representatives of the subscribers in the areas involved, and shall be nominated by the members of the corporation, and all nine (9) members of the board shall be elected by the members of the corporation as provided in this section. Directors or board members shall serve without pay for their work in this capacity, but may receive payment for particular services actually rendered, such as legal counsel, medical or surgical service, accounting or other required services, upon specific approval of the board of directors, the approval being made a part of the minutes of the board of directors.  
 It is unlawful for any person except a medical service plan corporation, incorporated in accordance with this chapter, and operating in accordance with this chapter, and operating in accordance with authority from the commissioner or an insurance company properly qualified in this state to write accident, health or disability insurance, to establish, maintain, or operate a medical service plan, or to solicit subscribers to or enter into contracts with respect to a medical service plan. This prohibition, however, shall not be construed as preventing a person from furnishing medical services for the prevention of diseases among the person's employees or from furnishing the medical services as are required under the Workers' Compensation Law, compiled in title 50, chapter 6, and related legislation when the employee is not charged for the services.  
 A medical service plan corporation shall be authorized to provide either or both general and special medical and surgical care benefits, including service that may be necessarily incident to medical care. The extent and scope of a medical service plan shall be clearly shown in the subscription contract, and may be limited only as clearly shown in the contract, and as approved by the commissioner.  
  Every doctor of medicine licensed to practice in this state under title 63, chapter 6, and who is reputable and in good standing, has the right to become a participating physician in the medical service plan corporation operating in the county in which the doctor resides or practices, for general or special medical care, as the case may be, under the terms and conditions that are imposed on other participating physicians under similar circumstances, or as prescribed in this chapter and approved by the commissioner. A medical service plan corporation shall impose no restrictions on the doctors of medicine who treat its subscribers as to methods of diagnosis or treatment. The private physician-patient relationship shall be maintained, and a subscriber shall at all times have free choice of any doctor of medicine who is a participating physician in the corporation and who agrees to accept a particular beneficiary as a patient.   It is the purpose of this section to make it clear that the creation of the relationship of patient and physician depends on the mutual assent of both parties. Contracts issued by the corporation to the subscribers shall not constitute individually or jointly obligations of the participating physician or physicians servicing the plan.   
 A medical service plan corporation may enter into agreements with physicians qualified as set out in  56-27-108, under which the physicians become participating physicians of a plan operated by the corporation, and may make to the physicians payments that have accrued to them by reason of services performed under the plan and on behalf of the corporation by them. Payment for medical services shall be made only to a participating physician unless otherwise provided for in this chapter, except that the corporation, in the case of emergency services rendered to a subscriber, may reimburse any doctor of medicine who would be eligible to become a participating physician except for residence or state by which licensed, in accordance with the rates adopted by the board of directors with respect to participating physicians. A medical service plan corporation may enter into contracts for the payment of medical services to the subscribers or members of similar medical service plan corporations of other states subject to the supervision of other states, and shall have the right to reimburse any other medical service plan corporation or physicians of another state or other counties of this state in which the corporation does not transact business for services rendered to its subscribers or beneficiaries named in the certificates issued to the subscribers at the same rate paid participating physicians under the certificate of the subscriber. The contracts between the medical service plan corporation and physicians shall be subject to the supervision of and the approval of the commissioner.  
 A corporation subject to this chapter may issue contracts only when the commissioner has by formal license authorized it to do so.  
 Application for the license shall be made on forms approved by the commissioner, containing information the commissioner deems necessary. Every application for the license shall be accompanied by copies of the following documents:   A certified copy of its charter or certificate of incorporation;   A copy of its bylaws, certified by the lawful custodian of the original;   Proposed contract between the corporation and the participating physicians showing terms under which medical service is to be furnished to subscribers;   Subscription contracts to be issued to subscribers showing a table of the rates to be charged and the benefits to which they are entitled, showing benefits expressed in service rather than in dollars; however, with equitable arrangements to protect the interests of subscribers when it becomes impossible for the services to be provided. The contracts should make clear that the responsibility for service to subscribers rests with the corporation, and not with the participating physicians;   A statement of the county or counties in which it proposes to operate medical service plans;   A statement of its financial condition and business in such form and detail as the commissioner may require, including the amounts of contributions paid for working capital and the name or names of each contributor, and the terms of the contribution, signed and sworn to by its president and secretary, or other proper officers, and shall pay for the filing of the statement the sum of thirty dollars ($30.00). Contributions not paid, but agreed to be paid, may be reported as a separate item, but shall not be admitted as assets of the corporation;   A copy of its proposed prospectus and advertising material to be used in the solicitation of contracts; and   Proof satisfactory to the commissioner that in the county or counties in which the corporation proposes to operate, fifty-one percent (51%) or more of the resident doctors of medicine have agreed to render the medical services for which the corporation agrees to pay.   
 The commissioner shall issue a license upon compliance with this chapter, and other proper requirements of the commissioner, and upon being satisfied that:   All items required to be filed are in proper form, as required by this chapter, and meet the approval of the commissioner;   The applicant is established as a bona fide medical service plan corporation, and the service rendered by the corporation is not an unnecessary duplication of similar services in the community served, and is desirable for public necessity and convenience, and a fair opportunity has been given to all practicing physicians of standing in the area to be served to become participating physicians;   The solicitations of contracts by the corporation and its conditions or methods of operation are fair and reasonable;   The rates charged are fair, reasonable, adequate and not unfairly discriminatory, and the benefits to be provided are fair, reasonable and not unfairly discriminatory. The rates may differ between subscribers in recognized groups and subscribers not in groups, all subject to the review and approval or disapproval of the commissioner as provided in  56-26-102 and 56-26-202 and any rules promulgated under that section. Sections 56-26-102 and 56-26-202 and related rules shall apply to all medical service plans in the same manner as to accident and sickness policies subject to  56-26-102 and 56-26-202;   The amount of money actually available for working capital is sufficient to carry all acquisition costs and operating expenses for a period of at least six (6) months from the date of the issuance of the certificate, or two thousand five hundred dollars ($2,500), whichever amount is larger;   The amount provided as working capital shall only be provided by individuals or groups who have no financial interest in the activities of the medical service corporations, or by the participating physicians. Interest charged for the capital, if any, shall not exceed six percent (6%), and payment of interest, if any, and repayment of the working capital, shall be permitted only after provision has been adequately made for operating expenses, payments to participating physicians and the establishment of legal reserves and other reserves as may be required by the commissioner;   The service corporation shall maintain at all times proper reserves, subject to the approval of the commissioner, for unearned subscription fees and unearned premiums, and for unpaid medical service bills, including provision for unreported and undischarged medical cases and other known liabilities. In addition, a contingency or epidemic reserve shall be accumulated annually at the rate of not less than two and one half percent (2.5%) of net premium income. When the contingency or epidemic reserves equal seventy-five thousand dollars ($75,000) or fifty-five percent (55%) of the annual premium income, whichever is higher, further accumulations may be discontinued for any length of time that they are not required to meet the requirements of this subdivision (7);   In the county or counties or areas in which a corporation proposes to operate, fifty-one percent (51%) or more of the resident doctors of medicine have agreed to render the medical services for which the corporation agrees to pay; and   A provision has been made in the subscription contract authorizing medical service other than participating physicians, in which case money benefits shall be provided as specified in the subscription contract, and approved as fair by the commissioner. The certificate of authority issued by the commissioner to operate a medical service plan or plans will be limited by the commissioner to the contracts and practices approved by the commissioner, and may be further limited to the county or counties or areas that the commissioner deems in the public interest.   
 The funds of the medical service corporations subject to this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurance companies.  
  All acquisition and administrative expenses incurred in connection with the medical service corporation shall at all times be limited after the second year of operation to not exceed twenty-five percent (25%) of the total net premium income of the corporation. The expenses, during the first year, shall be limited to thirty-five percent (35%), and during the second year, the expenses shall be limited to thirty percent (30%). All acquisition and administrative expenses incurred shall be subject to the approval of the commissioner.   Administrative expenses, as used in this section, includes all expenditures except payments for subscribers' claims.   Claim service expense shall be separately classified and included in administrative expense, unless otherwise ordered by the commissioner. No such corporation shall disburse as administrative expenses during any one (1) year a sum greater than the percentage limited by this section of payments received from subscribers during that calendar year.   
 A medical service plan corporation is authorized to purchase a contract of insurance protecting the corporation or any officer or employee of the corporation, or any physician from liability for injuries resulting from negligence, misfeasance, malfeasance, nonfeasance or health care liability on the part of any officer or employee of the corporation, or on the part of any physician in the course of rendering medical services to beneficiaries.  
 The medical service corporation shall maintain adequate financial and statistical records in reasonable uniformity with accounting plans and statistical requirements of the annual statement blank required by the commissioner.  
 The service corporation shall annually, on or before March 1, file in the office of the department a statement of its operations for the calendar year, and showing financial condition as of December 31, then next preceding, in the form and content the commissioner shall prescribe, signed and sworn to by its president and secretary, or other proper officers, and shall pay for the filing of the statement the sum of fifty dollars ($50.00).  
 The commissioner has the same authority to examine the service corporation as is granted to the commissioner for the examination of life, accident and health insurance companies, and has the same authority for the correction, rehabilitation or liquidation of the service corporation as is now provided by law for life, health and accident companies.  
 Every medical service corporation, or its agents, subject to this chapter, is subject to the fees and taxes as prescribed for life, health and accident insurance companies and agents of the companies doing business in this state. It is not the purpose of this chapter to discriminate in favor of the medical service corporations.  
 All licenses authorizing medical service plan corporations to transact business in this state shall be renewable on April 1 of each year, subject to the approval of the commissioner. Every medical service corporation licensed to do business in this state under this chapter shall obtain from the commissioner a certificate of authority for every agent writing or soliciting medical service plan contracts for the medical service corporation in this state, and the certificate shall be renewable January 1 of each year, subject to applicable sections of the insurance laws, including the revenue law of this state for ordinary life, health and accident insurance agents.  
 After the issuance of a certificate of authority, the commissioner shall have authority to issue orders or to publish regulations that may be necessary for the proper enforcement of this chapter, and as the commissioner deems are in the public interest. The published regulations of the commissioner will have the effect of statute, and shall include in particular powers of regulating the form of subscription contracts and required and prohibited provisions in the contracts, and all other matters needing further definition or clarification and coming within the requirements of this chapter. The commissioner has the authority to regulate rates as required by statute now in force or hereinafter adopted by the general assembly, as provided for by the regulation of casualty rates or as approved by the commissioner by proper legal regulation.  
  The commissioner has the authority to suspend or cancel the license of any medical service corporation or any agent of the corporation for violation of this chapter or of the insurance laws that may apply that are not in conflict with this chapter, after proper legal notice and opportunity of hearing, and subject to judicial review. The commissioner has the authority, after the issuance of a certificate of authority, to withdraw approval that the commissioner may have previously granted of any document required to be filed with the department under any section of this chapter. Such authority includes the right to require a medical service plan corporation to solicit in a manner required by agents' licensing laws, and to fulfill contracts approved by the commissioner, to utilize soliciting methods provided by this chapter, or by other insurance laws, including the agents' licensing law applying to casualty companies, or to operate in a county or counties or area different from those on which the certificate of authority was based, and to comply with other orders and regulations of the commissioner or requirements of this chapter; provided, that the contracts and practices are in compliance with this chapter and are not violative of other laws of this state. The authorization shall be deemed to be an amendment to the original certificate of authority.   The commissioner has the power and authority to revoke and amend, after reasonable notice and hearing, any certificate, order, authority or consent made by the commissioner to a medical service plan corporation, and may also cancel or suspend the authority of the corporation to transact business in any particular county or counties or area if the commissioner finds that less than fifty-one percent (51%) of the eligible licensed doctors of medicine practicing in that county are participating physicians.   
  A medical service plan corporation that neglects to make and file its annual statement in the form and within the time provided by  56-27-117, or neglects to reply in writing to the inquiries of the commissioner and within a reasonable time as may be specified by the commissioner, or who otherwise violates this chapter, shall be subject to revocation of license after proper notice and right of hearing.   Any agent or solicitor who violates this chapter or any written order or official regulation of the commissioner or any other insurance law, particularly the agents' licensing law set forth in chapter 6 of this title, shall be subject to revocation of the person's license after due notice and right of hearing.   
 A review of any order made by the commissioner pursuant to this chapter may be had in the circuit court of Davidson County, upon a writ of certiorari. Application for the writ shall be made within thirty (30) days after the making of the order by the commissioner.  
 Every subscription contract made by a medical service plan corporation shall provide for the payment of medical services for a period of twelve (12) months from the date of issue of the subscription certificate. The contract may provide that it shall be subject to renewal from year to year unless there has been one (1) month's prior written notice of termination by the medical service plan corporation. A subscriber shall forfeit membership upon failure to renew the subscriber's contract, or upon the subscriber's voluntary resignation. During the first contract year, the contract may provide that the inception coverage may be deferred for not more than two (2) months from date of issue of the contract, and may exclude treatment for illness existing at the inception of the contract.  
 Every contract entered into by a medical service plan corporation and a subscriber shall be in writing, and a certificate stating the terms and conditions of the contract shall be furnished the subscriber. No such subscription certificate shall be issued unless it contains the following provisions, and any other applicable provisions that may be required by this chapter or other applicable laws of this state:   A statement of the amounts payable to the corporation by the subscribers and the times at which and manner in which the amounts shall be paid;   A statement of the nature of the medical services to be paid for and the period during which the certificate is effective; and if there are any types of medical services to be excepted with the approval of the commissioner, a detailed statement of the exceptions printed as specified in this section;   A statement of the terms or conditions, if any, upon which the certificate may be cancelled or otherwise terminated at the option of either party;   A statement that the subscription and certificate constitute the contract between the corporation and the subscriber, and include the endorsements thereon and attached papers, if any, and contain the entire contract;   A statement that no statement by the subscriber in the subscriber's application for a certificate shall void the contract or be used in any legal proceeding under the contract, unless the application or an exact copy of the application is included in or attached to the certificate, and that no agent or representative of the corporation, other than an officer or officers designated in the certificate, is authorized to change the contract or waive any of its provisions;   A statement that if the subscriber defaults in making any payment under the certificate, the subsequent acceptance of a payment by the corporation or by one (1) of its duly authorized agents shall reinstate the certificate, but with respect to sickness and injury may cover only such sickness as may be first manifested more than a specified number of days, not exceeding ten (10) days, after the date of the acceptance;   A statement of the period of grace that will be allowed a subscriber for making any payment due under the contract. The period shall not be less than ten (10) days during the first contract year, and thereafter shall be one (1) month, not less than thirty (30) days;   A statement authorizing medical service by physicians other than participating physicians in cases of emergency or when consented to by the medical service corporation, or when the subscriber requires medical services outside the county or counties or area served by the medical service plan corporation, in which case money benefits shall be provided as optional and as specified in the subscriber's contract and approved as fair by the commissioner. Otherwise, a statement that indemnity in the form of cash will not be paid to any subscriber except in reimbursements paid by the subscriber to a physician and for which the corporation was liable at the time of the payment; and   Any other statements that may be required by published regulations of the commissioner.   
 In the subscription certificate referred to in  56-27-126:   All printed portions shall be plainly printed in type of which the face is not smaller than ten (10) point;   There shall be a brief description of the subscription certificate on its first page and on its filing back in type of which the face is not smaller than fourteen (14) point. The description shall not be broader than the coverage granted in the contract;   The exceptions of the contract shall appear with the same prominence in the certificate as the benefits to which they apply, and reference to the exceptions by a paragraph section shall be specifically made in the insuring clause;   If the contract contains any provisions purporting to make any portion of the articles of incorporation or of the bylaws of the corporation a part of the contract, the portion shall be set forth in full in the subscription certificate; and  All in a manner and in compliance with published regulations of the commissioner.    
 A medical service plan corporation may, in its discretion, receive and accept from governmental or private agencies or from other persons as defined in this chapter, payments covering all or part of the costs of subscriptions to provide medical care for needy and other individuals. However, all contracts for medical care shall be between the medical service plan corporation and the person to receive the care.  
 Any dispute or controversy arising between a medical service plan corporation and any participating physician or any physician desiring to become a participating physician, or any subscriber, or any other person whose subscription certificate has been cancelled, or to whom the corporation has refused to issue a certificate, may, within thirty (30) days after the dispute or controversy arises, be appealed by the person allegedly aggrieved to the commissioner, or a person or persons designated by the commissioner. After proper notice and hearing, the commissioner shall render a decision, which shall be binding on any medical service plan corporation or agent of the corporation, subject to judicial review.  
 Every medical service plan corporation shall mail annually to each subscriber a list of the names and addresses of all of the physicians and surgeons in the county of the subscriber's residence, who have agreements with the corporation to act as participating physicians.  
 This chapter is not to be construed as prohibiting any insurance company properly qualified in this state to write accident, health or disability insurance from making available any plan of medical service that may be approved by the commissioner under existing statutes or within the authority granted in this chapter, in the same manner and in the same means as granted to benevolent associations.  
 Nothing in this chapter shall be construed so as to modify, vary or repeal any law now in force relating to the practice of medicine and surgery, or the regulation of ordinary life, accident, and health or casualty insurance, except only as the law is inconsistent with this chapter.  
  Any law to the contrary notwithstanding, no contract of insurance that provides coverage for sterilization operations or procedures may be entered into or renewed on or after July 1, 1971, if the contract imposes any disclaimer, restriction on, or limitation of coverage with respect to the insured's reason for sterilization. All contracts entered into or renewed on or after July 1, 1971, shall be construed to be in compliance with this section, and any provision in any contract that is in conflict with this section shall be of no force or effect.   If any contract of insurance entered into prior to July 1, 1971, provides coverage for a sterilization operation or procedure, that part of the insurance contract covering the sterilization operation or procedure shall not be cancelled by the insurer unless the cancellation coincides with cancellation of the entire policy.   
 Any corporation organized not for profit under the general welfare corporation laws of the state for the purpose of establishing, maintaining and operating a nonprofit hospital service corporation, whereby hospital service may be provided by a hospital or group of hospitals with which the corporation has a contract for the purpose, to such of the public as become subscribers to the corporation under a contract that entitles each subscriber to certain hospital care, shall be governed by this chapter.  
 The articles of incorporation of the corporation and amendments to the articles shall be submitted to the department of commerce and insurance. The approval of the articles and amendments by the commissioner of commerce and insurance shall be endorsed on the articles and amendments before the articles and amendments are filed with the secretary of state; provided, that if the articles of incorporation of the corporation have been filed with the secretary of state prior to February 24, 1945, the approval of the articles by the commissioner shall be evidenced by a separate instrument in writing, filed with the secretary of state.  
  The directors of the corporation shall at all times be composed of the following groups in equal numbers:  Administrators or trustees of hospitals that have contracted with the corporation to render hospital service to the subscribers;   Physicians, exclusive of group one (1); and   The general public, exclusive of groups one (1) and two (2).     Directors or board members should serve without pay for their work in this capacity; provided, that they may receive payment for particular services actually rendered, such as legal counsel, medical service, accounting or other required services, upon specific approval of the board of directors, the approval being made a part of the minutes of the board.   
 A corporation, subject to this chapter, may issue contracts only when the department has, by formal license, authorized the corporation to do so.  
 Application for the license shall be made on forms approved by the commissioner, containing the information the commissioner deems necessary. Each application for the license shall be accompanied by copies of the following documents:   Certificate of incorporation;   Bylaws;   Proposed contracts between the corporation and participating hospital or hospitals showing terms under which hospital service is to be furnished to subscribers;   Contracts to be issued to subscribers showing a table of the rates to be charged and the benefits to which they are entitled, showing benefits expressed in service rather than in dollars; however, with equitable arrangements to protect the interests of subscribers when it becomes impossible for the service to be provided. The contracts should make clear that the ultimate responsibility for service to subscribers rests with the member hospital or hospitals; and   A statement of its financial condition and business in such form and detail as the commissioner may require, including the amounts of contribution paid for working capital, and the name or names of each contributor and the terms of the contribution, signed and sworn to by the president and secretary or other proper officers, and shall pay for the filing of the statement the sum of thirty dollars ($30.00). Contributions not paid, but agreed to be paid, may be reported as a separate item, but shall not be admitted as assets of the corporation.   
 The commissioner shall issue a license upon compliance with this chapter and other proper requirements of the commissioner, and upon being satisfied that:   The applicant is established as a bona fide nonprofit hospital service corporation and the service rendered by the corporation is not an unnecessary duplication of similar service in the community served, and is desirable for public necessity and convenience, and hospital contracts have been obtained, if possible, in the finding of the commissioner, with hospitals representing a majority of the bed capacity in the area where members are enrolled, and a fair opportunity has been given to all institutions of standing in the area to be served, to become member hospitals;   A provision has been made in the subscriber's contract authorizing hospital service in hospitals other than participating hospitals, in which case money benefits shall be provided as specified in subscriber's contract and approved as fair by the commissioner;   Member hospitals of a hospital service plan agree to render service benefits of the plan of which it is a member at the agreed payment schedule to all subscribers; and   The rates charged and benefits to be provided are to be fair, reasonable and not unfairly discriminatory. Rates may differ between subscribers in recognized groups and subscribers not in groups, all subject as above to the review and approval or disapproval of the commissioner as provided in  56-26-102 and 56-26-202 and any rules promulgated under that section. Sections 56-26-102 and 56-26-202 and related rules shall apply to all hospital service plans in the same manner as to accident and sickness policies subject to  56-26-102 and 56-26-202.   
 The amount provided as working capital shall only be provided by individuals or groups who have no financial interest in the activities of the hospital service corporations, or by the member hospitals. Interest charged for the capital, if any, shall not exceed six percent (6%), and payment of interest, if any, and repayment of the working capital shall be permitted only after provision has been adequately made for the operating expenses, payments to member hospitals, and the establishment of legal reserves and the other reserves as may be required by the commissioner. The amount of money actually available for working capital shall be sufficient to carry all acquisition costs and operating expense for a period of at least three (3) months from the date of the issuance of the certificate.  
 All acquisition and administrative expenses in connection with the hospital service corporation shall at all times be limited after the first year of operation so as not to exceed twenty-five percent (25%) of the total net premium income of the corporation. All acquisition and administrative expenses shall be subject to the approval of the commissioner.  
 The service corporation shall maintain at all times proper reserves subject to the approval of the commissioner for unearned subscription fees and unearned premiums and for unpaid hospital bills, including provision for unreported and undischarged hospital cases, and other known liabilities. In addition, a contingency or epidemic reserve shall be accumulated annually at the rate of not less than two and one half percent (2.5%) of net premium income. When the contingency or epidemic reserve equals seventy-five thousand dollars ($75,000), or fifty-five percent (55%) of the annual premium income, whichever is higher, further accumulations may be discontinued for any length of time that they are not needed to meet the requirement of this section.  
 The funds of the service corporation, subject to this chapter, shall be invested only in securities permitted by the law of this state for the investment of assets of life insurance companies.  
 The service corporation shall annually, on or before March 1, file in the office of the department a statement of its operations for the calendar year and showing financial condition as of December 31 then next preceding, in such form and content as the commissioner shall prescribe, signed and sworn to by its president and secretary, or other proper officers, and shall pay for the filing of the statement the sum of fifty dollars ($50.00).  
 The service corporation shall maintain adequate financial and statistical records in reasonable uniformity with accounting plans and statistical requirements of the annual statement blank required by the commissioner.  
 The commissioner has the same authority to examine the service corporations as is granted the commissioner for the examination of life, accident and health insurance companies, and has the same authority for the correction, rehabilitation or liquidation of the service corporations as is now provided by law for life, accident and health companies.  
 The corporation may enter into contracts for the rendering of hospital service to the subscribers only with hospitals approved by the commissioner. All contracts issued by the corporation to the subscribers shall constitute individually and jointly direct obligations of the hospital or hospitals with which the corporation has contracted for hospital service. The rates charged to the subscribers for hospital service and the rates of payment by the corporation to the contracting hospital or hospitals at all times shall be subject to the approval or disapproval of the commissioner; provided, that in the case of experience-rated group insurance, premium rates and classification of risks need not be filed but shall be maintained by the hospital service corporations and made available for review by the commissioner upon the commissioner's request.  
 The commissioner is authorized to publish regulations that will have the effect of statute, regulating the form of subscribers' contracts and required and prohibited provisions in the contracts.  
 All licenses authorizing hospital service corporations to transact business in this state shall be renewable on April 1 of each year. A service corporation licensed to do business in this state under this chapter shall obtain from the commissioner a certificate of authority for every agent writing or soliciting hospital service contracts for the medical service corporation in this state, and the certificate shall be renewable January 1 of each year.  
 Every corporation or its agents, subject to this chapter, are subject to the fees and taxes prescribed for life, health and accident insurance companies and agents of the companies doing business in this state. It is not the purpose of this chapter to discriminate in favor of the service corporations.  
 This chapter is not to be construed as prohibiting any insurance company properly qualified in this state to write accident, health or disability insurance to make available any plan of hospitalization that may be approved by the commissioner under existing statutes or within the authority granted in this chapter in the same manner and in the same means as granted to benevolent associations.  
 The purpose of this chapter is as described in this section, and it is the intention of this chapter to provide for the organization and operation of nonprofit hospital service corporations. However, it is not to be construed as prohibiting any insurance company properly qualified in this state to write accident, health or disability insurance to make available any plan of hospitalization that may be approved by the commissioner under other chapters of this code or within the authority granted in this chapter in the same manner and in the same means as granted to benevolent associations. Further, nothing in this chapter shall be construed as either granting to hospitals the authority to practice medicine or the authority to collect medical fees for physicians who serve on the hospital staff.  
 Any corporation not for profit organized under the former General Welfare Corporation Act, or under former title 48, Chapters 1 14 [repealed] for the purpose of establishing, maintaining and operating a nonprofit hospital service corporation and of providing medical benefits, whereby hospital service may be provided by a hospital or group of hospitals with which the corporation has a contract for that purpose and whereby the corporation may provide cash indemnity for medical expense, to such of the public as become subscribers to the corporation under a contract that entitles each subscriber to certain hospital care and to certain cash indemnity benefits for medical expense, shall be governed by this chapter.  
 Any corporation now organized and existing under title 48, chapter 11 [repealed] as it existed prior to July 1, 1969, or any corporation now existing and operating under chapter 28 of this title, may become a corporation with the powers of a corporation newly organized under this chapter and become subject to this chapter by amending its charter so as to provide for both medical benefits and hospital services as provided by this chapter and conforming to this chapter, but shall at all times be required before the amendment becomes effective to have the amendment approved by the commissioner, as provided in  56-29-104.  
 The articles of incorporation of the corporation and amendments to the articles shall be submitted to the department. The approval of the articles and amendments by the commissioner of commerce and insurance, referred to as the commissioner in this chapter, shall be endorsed on the articles and amendments before the articles and amendments are filed with the secretary of state; provided, that if the articles of incorporation of the corporation have been filed with the secretary of state prior to April 15, 1949, the approval of the articles by the commissioner shall be evidenced by a separate instrument in writing, filed with the secretary of state.  
  Any corporation organized and governed by this chapter prior to July 1, 1981, should have the board of directors of the corporation composed of the following groups in equal numbers:  Administrators or trustees of hospitals that have contracted with the corporation to render hospital service to the subscribers;   Physicians, exclusive of group one (1); and   The general public, exclusive of groups one (1) and two (2).     As the terms of board members of corporations organized prior to July 1, 1981, and governed by this chapter terminate, the positions shall be refilled in the manner enumerated in subsection (c), and any corporation organized on or after July 1, 1981, and governed by this chapter shall likewise comply with the composition of board members provided in subsection (c).   The board of directors of the corporations should at all times be composed of the following groups:  Administrators of hospitals that have contracted with the corporation to render hospital service to the subscribers;   Physicians, exclusive of group one (1); and   The general public, exclusive of groups one (1) and two (2); provided, that in all cases over fifty percent (50%) of the board members shall be composed of members of group three (3), and the remaining board members shall be divided equally between members of group one (1) and of group two (2).      No contract for equipment or supplies may be entered into between a corporation subject to this chapter and one (1) or more board members unless the contract has been competitively bid.   The compensation of a board member shall not exceed ten thousand dollars ($10,000) per year; provided, that, in addition to the compensation, a board member may receive payment for particular services actually rendered, such as legal counsel, medical service, accounting or other required services, upon specific approval of the board of directors, the approval being made a part of the minutes of the board of directors. Any such payment to members of the board shall be reported annually to the secretary of state on forms provided by the secretary of state. The reports shall be retained by the secretary of state for three (3) years.   Each director shall identify and report any conflict of interest the director has due to serving as a member of the board. The written report must be filed annually with the secretary of state by January 10.   Each director must fully disclose and report all income received from any corporation, partnership or other business interest that transacts business with or receives funds from a hospital and medical service corporation organized and governed under this chapter.   The board of directors of any corporation organized and governed by this chapter shall collectively represent the customers served by the corporation.     
 A corporation, subject to this chapter, may issue contracts only when the department has, by formal license, authorized it to do so.  
 Application for the license shall be made on a form approved by the commissioner, containing such information as the commissioner deems necessary. Each application for the license shall be accompanied by copies of the following documents:   Certificate of incorporation;   Bylaws;   Proposed contracts between the corporation and participating hospital or hospitals showing terms under which hospital service is to be furnished to subscribers;   Contracts to be issued to subscribers showing a table of the rates to be charged and the benefits to which they are entitled, showing medical expense indemnity benefits expressed in terms of dollars and showing hospital service benefits expressed in service rather than in dollars; however, with equitable arrangements to protect the interests of subscribers when it becomes impossible for the service to be provided. The contracts should make clear that the ultimate responsibility for hospital service to subscribers rests with the member hospital or hospitals; and   A statement of its financial condition and business in such form and detail as the commissioner may require, including the amounts of contribution paid for working capital, and the name or names of each contributor and the terms of the contributions, signed and sworn to by its president and secretary or other proper officers, and shall pay for the filing of the statement the sum of thirty dollars ($30.00). Contributions not paid, but agreed to be paid, may be reported as a separate item, but shall not be admitted as assets of the corporation.   
 The commissioner shall issue a license upon compliance with this chapter and other proper requirements of the commissioner, and upon being satisfied that:   The applicant is established as a bona fide nonprofit hospital service corporation with or without the right to provide medical expense indemnity; the hospital service benefits provided by the corporation are not an unnecessary duplication of similar service in the community served; it is desirable for public necessity and convenience; hospital contracts have been obtained, if possible, in the findings of the commissioner, with hospitals representing a majority of the bed capacity in the area where members are to be enrolled; and a fair opportunity has been given to all institutions of standing in the area to be served, to become member hospitals;   A provision has been made in the subscriber's contract authorizing hospital service in hospitals other than participating hospitals, in which case money benefits shall be provided as specified in the subscriber's contract and approved as fair by the commissioner;   Member hospitals of a hospital service plan agree to render service benefits of the plan of which it is a member at the agreed payment schedule to all subscribers; and   The rates charged are fair, reasonable, adequate and not unfairly discriminatory. Benefits to be provided are to be fair, reasonable and not unfairly discriminatory. Rates may differ between subscribers in recognized groups and subscribers not in groups, all subject as above to the approval of the commissioner.   
 The amount provided as working capital shall only be provided by individuals or groups who have no financial interest in the activities of the hospital service corporations, or by any member hospitals. Interest charged for the capital, if any, shall not exceed six percent (6%), and payment of interest, if any, and repayment of the working capital shall be permitted only after provision has been adequately made for operating expenses, payments to member hospitals and the establishment of legal reserves and other reserves that may be required by the commissioner. The amount of money actually available for working capital shall be sufficient to carry all acquisition costs and operating expenses for a period of at least three (3) months from the date of the issuance of the certificate.  
 All acquisition and administrative expenses in connection with the hospital service corporations shall at all times be limited after the first year of operation to not exceed twenty-five percent (25%) of the total net premium income of the corporation. All acquisition and administrative expenses shall be subject to the approval of the commissioner.  
 The service corporation shall maintain at all times proper reserves, subject to the approval of the commissioner, for unearned subscription fees and unearned premiums and for unpaid hospital bills, including provision for unreported and undischarged hospital cases and for incurred medical expense indemnity claims and other known liabilities. In addition, a contingency or epidemic reserve shall be accumulated annually at a rate not less than two and one half percent (2.5%) of net premium income. If the service corporation provides for hospital service benefits only when the contingency or epidemic reserve equals seventy-five thousand dollars ($75,000), or fifty-five percent (55%) of the annual premium income, whichever is higher, or if the service corporation provides for hospital service and medical expense indemnity benefits when the contingency or epidemic reserve equals one hundred fifty thousand dollars ($150,000), or fifty-five percent (55%) of the annual premium income, whichever is higher, further accumulations may be discontinued for any length of time that they are not required to meet the contingency or epidemic reserve requirement. If the service corporation is unable to meet the requirements of this section, then the commissioner is empowered to require that the corporation either increase rates or reduce benefits to the extent necessary in order that the corporation may be able to meet the requirements.  
 The funds of the service corporations, subject to this chapter, shall be invested only in securities permitted by the law of this state for the investment of assets of life insurance companies.  
 Every service corporation shall annually, on or before March 1, file in the office of the department a statement of its operation for the calendar year and showing financial condition as of December 31 then next preceding, in such form and content as the commissioner prescribes, signed and sworn to by its president and secretary, or other proper officers, and shall pay for the filing of the statement the sum of fifty dollars ($50.00).  
 The service corporation shall maintain adequate financial and statistical records in reasonable uniformity with accounting plans and statistical requirements of the annual statement blank required by the commissioner.  
 The commissioner has the same authority to examine such service corporations as granted to the commissioner for the examination of life, accident and health insurance companies, and has the same authority for the correction, rehabilitation or liquidation of such service corporations as now provided by law for life, accident and health companies.  
 The corporation shall submit to the commissioner specimen copies of each different type of subscriber's contract and a schedule of rates applicable to the subscriber's contract that it proposes to issue in this state. The commissioner shall approve or disapprove a contract as provided for in  56-26-102 and 56-26-202 and any regulations promulgated under the authority of that section. Sections 56-26-102 and 56-26-202 and related regulations shall apply to all hospital and medical service plans in the same manner as to the accident and sickness policies subject to  56-26-102 and 56-26-202.  
  All licenses authorizing hospital service corporations to transact business in this state shall be renewable on July 1 of each year.   A hospital service corporation licensed to do business in this state under this chapter shall obtain from the commissioner a certificate of authority for every agent writing or soliciting contracts for the service corporation in this state, and the certificates shall be renewable January 1 of each year.   
 Every corporation or its agents, subject to this chapter, shall be subject to the fees and taxes as prescribed for life, health and accident insurance companies and agents of the companies doing business in this state. It is not the purpose of this chapter to discriminate in favor of the service corporations.  
  Every life insurance company doing business in this state, chartered by the laws of this state, shall be required for the better protection of the policyholders, to keep at all times the sum of one hundred thousand dollars ($100,000) invested in bonds, securities, or mortgages on real estate for double the amount loaned, to be certified as safe and worth this amount by the commissioner.   Insurance companies other than life, chartered by the laws of this state, shall not be allowed to transact business in this state unless possessed of at least fifty thousand dollars ($50,000) paid up, actual cash capital, or, in lieu of cash capital, a stock guaranty capital or surplus, above all liabilities, including reinsurance reserve, of not less than fifty thousand dollars ($50,000).   This section shall not apply to companies organized under the laws of this state prior to May 11, 1895, and actually engaged in the transaction of insurance business.   
  No director or other officer of any domestic insurance company organized under the laws of this state, and no member of a committee having any authority in the investment or disposition of its funds, shall accept, or be the beneficiary of, either directly or remotely, any fee, brokerage, commission, gift, or other consideration for or on account of any loan, deposit, purchase, sale, payment, or exchange made by or in behalf of the company, or be pecuniarily interested in the purchase, sale, or loan, either as borrower, principal, coprincipal, agent, or beneficiary, except that if a policyholder, the person shall be entitled to all the benefits accruing under the terms of the contract; provided, that this section shall not forbid the collection by attorneys of reasonable fees for the examination of titles and investigations of loans and investments. This section shall not bar a person who is an agent of an insurance company, in the normal course of business, from serving on the board or on a committee of an insurance company because the person receives commissions on insurance sales.   This section shall not bar or limit the ability of a director, officer, or committee member of an insurance company from:  Holding or owning stock or other ownership interest, if the stock or ownership interest has been disclosed to the insurance company, in a company or entity:  The shares of which are publicly traded on a national stock exchange or on an over-the-counter basis;   That is regulated by the federal reserve board, the federal deposit insurance corporation, the office of the comptroller of the currency, or the office of thrift supervision; or   That does business with the insurance company in the ordinary course of business and on terms no less favorable to the insurance company than are available to ordinary customers of the entity;     Receiving dividends or other distributions in the ordinary course of business from the stock or ownership interest; or   Serving as a director, officer, committee member, employee or agency of any entity listed in this subsection (b) and receiving fees or other compensation in the ordinary course of business for the service.     
 No funds of a company invested in violation of  56-3-103 shall be allowed by the commissioner as an admitted asset of the company.  
  A domestic stock or mutual life insurance company or fraternal benefit society shall not:  Pay any salary, compensation or emolument to any director or trustee regardless of amount, or to any officer, employee or other person, firm or corporation amounting in any one (1) year to more than the amount set forth in the appropriate schedule of the annual statement filed with the commissioner pursuant to  56-1-501, unless the payment has first been authorized by a vote of the board of directors of the company or society;   Pay any other compensation or emolument to any officer, director or trustee of the company or society who is paid a salary for services of more than one hundred dollars ($100) per month; or   Enter into an agreement for a term longer than twelve (12) months from the date of the agreement with any officer, director, trustee or salaried employee of the company or society providing for the payment of any salary, compensation or emolument for any services rendered or to be rendered.     This section shall not prohibit the life insurance company or society from entering into an agreement with:  Any officer or employee of the company or society for the payment of deferred compensation beyond the period of twelve (12) months from the date of the agreement;   Any officer or employee of the company or society for a stock option plan, stock purchase plan, stock bonus plan, or other incentive compensation plan, if, before the plan is entered into or becomes effective, it is first approved by the commissioner;   Any agent, general agent or district manager of the company or society providing for the payment of commissions on the regular commission basis; or   Any agent of the company or society providing for the payment of renewal commissions.     No domestic or foreign life insurance company or society doing business in this state shall calculate or pay, directly or indirectly, the compensation of any officer, director or trustee of the company or society as a percentage of the premiums collected or the insurance written by the company or society unless it first obtains the approval of the commissioner.   
  No domestic stock or mutual life insurance company or fraternal benefit society shall grant any pension to any officer, director or trustee of the company or society, or to any member of the person's family after the person's death, or to any other person whomsoever except that the company or society may provide for an employees' retirement plan for its employees, which plan may or may not require contributions from the employees.   Before the company or society enters into the employees' retirement plan, it shall first submit that plan to the commissioner for approval pursuant to the requirements of this section, and the plan shall not become effective until it has been so approved. After the effective date of the plan, the commissioner may, upon a finding that the plan no longer meets the requirements of this section, order the company or society to discontinue contributions to the plan for a specified time with renewal of the contributions to be subject to the commissioner's subsequent approval.   The commissioner shall approve, or continue the approval of, an employees' retirement plan that meets the following requirements:  No benefit payment can be made to any employee under the plan until the entire reserve required for the benefit payment to the employee has been accumulated and set aside; and   If the plan is established for any classification of the employees of the company or society, such as home office employees, detached office employees, field representatives, agents, etc., it provides for participation and benefits on a nondiscriminatory basis for all employees in each classification who may elect to participate in the plan.     As used in this section, employees includes all persons employed by the company or society in any capacity, but does not include any director or trustee of the company or society who serves in that capacity only.   
  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.   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.   
  It is not lawful for the directors, trustees, or managers of any insurance company incorporated by the laws of this state to make any dividend except from the surplus profits.   Any dividend made contrary to this chapter shall subject the company making the dividend to a forfeiture of its charter, and each stockholder receiving it to a liability to the creditors of the company to the extent of double the amount of the dividend declared.   
 Moneys received as premiums upon risks undetermined and outstanding, at the time of declaring any dividend, shall not be considered as profits, earned and divided as such; and if any loss should happen impairing the capital stock, no dividend shall be declared until the capital stock is made good; and if a dividend is declared, contrary to this prohibition, the directors consenting to the dividend shall be liable to make good to the creditors of the company, if their claims cannot otherwise be satisfied, the amount of dividends thus illegally divided.  
 Every insurance company doing business in this state shall, on January 1 of each year, and for thirty (30) days thereafter, cause to be published, in one (1) newspaper printed in the city of Nashville, a full and accurate statement, verified by the oath of the presiding officer, of the dividends and profits declared and payable upon stocks, bonds, or other evidences of indebtedness that remain unclaimed by the person entitled to the dividends and profits.   Code 1858,  1830; Shan.,  3346; Code 1932,  6171; T.C.A. (orig. ed.),  56-236, 56-331.  
  Insurance companies providing insurance coverage against civil liability for the death or personal injury of any person as the result of negligence or health care liability in the rendering of professional services by a licensed physician, either doctor of osteopathic medicine or doctor of medicine, or by a licensed dentist shall report to the state board of medical examiners or state board of osteopathic examination or the state board of dentistry any settlement of a claim or judgment, sealed, confidential or otherwise, of five thousand dollars ($5,000) or more that arises out of a claim of negligence or health care liability on the part of an insured physician or dentist as distinguished from administrative matters. The report shall be made within thirty (30) days of the settlement or judgment and shall contain only the following information:  The name and address of the licensed physician or dentist;   The name and address of the plaintiff;   The name of the patient, if different from the plaintiff;   The name and location of the court in which a claim was filed, if any;   The amount of any judgment or settlement; and   The identity of the insurance company and the person filling out the report.     The reports shall be confidential, shall not be subject to public inspection, shall not be subject to subpoena or used as evidence in any legal proceeding, civil or criminal; provided, however, that the reported judgments and settlements contained in the reports, except those that are ordered sealed or to remain confidential by a court of competent jurisdiction, may be used to fulfill the requirements of the Health Care Consumer Right to Know Act of 1998, compiled in title 63, chapter 32, but may not be used to initiate or prosecute any administrative proceeding before the board for licensing health care facilities.   No insurance company, official, or other person authorized by an insurance company to issue the reports shall be liable for filing reports in accordance with this section, so long as the report is not disclosed to anyone other than authorized personnel of the state board of medical examiners, state board of osteopathic examination or the state board of dentistry, or the reported judgments and settlements contained in the reports, except those that are ordered sealed or to remain confidential by a court of competent jurisdiction are used to fulfill the requirements of the Health Care Consumer Right to Know Act of 1998.   
  All bonds permitted by this chapter or other evidences of debt having a fixed term and rate of interest held by an insurer may, if amply secured and not in default as to principal or interest, be valued as follows:  If purchased at par, at the par value;   If purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at maturity and so as to yield in the meantime the effective rate of interest at which the purchase was made, or in lieu of that method, according to the accepted method of valuation approved by the department; and   The purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase, plus actual brokerage, transfer, postage or express charges paid in the acquisition of the securities.     The department shall have full discretion in determining the method of calculating values according to the rules set forth in this section, but the method or valuation shall not be inconsistent with any applicable valuation or method used by insurers in general, or the method then currently formulated or approved by the National Association of Insurance Commissioners or its successor organization.   
  Securities, other than those referred to in  56-3-113, held by an insurer shall be valued, in the discretion of the department, at their market value, at their appraised value, or at prices determined by it as representing their fair market value. Nothing in this section applies to loans secured by mortgages upon improved real property or upon leasehold estates in improved real property, which shall continue to be valued on the basis of amortization to maturity.   Preferred or guaranteed stocks or shares, while paying full dividends, may be carried at a fixed value in lieu of market value, at the discretion of the department and in accordance with the method of valuation it approves.   Stock of a subsidiary corporation of an insurer shall not be valued at an amount in excess of the net value of the stock as based upon those assets only of the subsidiary that would be eligible under this chapter for investment of the funds of the insurer directly.   No valuations under this section shall be inconsistent with any applicable valuation or method then currently formulated or approved by the National Association of Insurance Commissioners or its successor organization.   Before the commissioner takes any action pursuant to this section, the commissioner shall give written notice to the insurer involved, stating specifically the nature of the alleged violation, and fixing a time and place, at least ten (10) days thereafter, when a hearing on the matter shall be held. The burden of proof shall be on the commissioner to show the lack of statutory criteria by the preponderance of the evidence. After the hearing, or upon failure of the accused to appear at the hearing, the commissioner, if the commissioner finds a violation, may enter an appropriate order under this section as the commissioner deems advisable.   When the commissioner takes action in any or all of the ways set out in this section, the party aggrieved may appeal from the action to the chancery court of Davidson County.   
 Notwithstanding  56-1-405, where bonds or other evidences of debt having a fixed term and rate of interest, or shares of capital stock of a federal home loan bank, owned by a domestic insurance company are held by or on behalf of another person in connection with a reinsurance liability of, or an indebtedness incurred to a federal home loan bank by the domestic insurance company, the amount allowed as a credit against the liability or indebtedness shall be determined in the manner provided for in  56-3-113 or  56-3-303(a)(4), as applicable, and the commissioner may allow the excess, if any, of the amount of the bonds or other evidences of debt or shares of capital stock over the amount of the liability or indebtedness to constitute an admissible asset of the domestic insurance company, but only if and to the extent that the bonds or other evidences of debt or shares of capital stock would constitute admissible assets except for being so held in connection with a reinsurance liability or indebtedness to a federal home loan bank; provided, that the total amount of the excess that a domestic insurance company may take into account as an admissible asset shall not exceed thirty percent (30%) of the company's capital and surplus as determined on December 31 of the year preceding the date of the determination.  
  No insurance company engaged in the business of property and casualty insurance shall retain a maximum net amount on any single risk in excess of ten percent (10%) of the company's capital, or surplus funds, if the insurer is a mutual, reciprocal or Lloyd's plan insurer.   This section does not apply to any company organized pursuant to chapter 13 of this title except for risk retention groups as defined in 15 U.S.C.   3901 et seq. and 42 U.S.C.  9671.   
  The investments of foreign and alien insurers shall be as permitted by the laws of their domicile but shall be of a quality substantially as high as those required under  56-2-120 or  56-3-113  56-3-116 and this section for similar funds of like domestic insurers.   For the purpose of this section, the domicile of an alien insurer, other than insurers formed under the laws of Canada, shall be that state designated by the insurer in writing filed with the commissioner at the time of admission to this state and may be any one (1) of the following states in which:  The insurer was first authorized to transact insurance;   The insurer's principal place of business is located in the United States; or   The larger deposits of trusteed assets of the insurer for the protection of its policyholders and creditors in the United States is held.     If the insurer makes no such designation, its domicile shall be deemed to be that state in which is located its principal place of business in the United States.   In the case of the insurer formed under the laws of Canada or a province of Canada, its domicile shall be deemed to be that province in which its head office is situated.   Before the commissioner takes any action pursuant to this section, the commissioner shall give written notice to the insurer involved, stating specifically the nature of the alleged violation, and fixing a time and place, at least ten (10) days thereafter, when a hearing on the matter shall be held. The burden of proof shall be on the commissioner to show the lack of statutory criteria by the preponderance of the evidence. After the hearing, or upon failure of the accused to appear at the hearing, the commissioner, if the commissioner finds a violation, may enter an appropriate order under this section as the commissioner deems advisable.   When the commissioner takes action in any or all of the ways set out in this section, the party aggrieved may appeal from the action to the chancery court of Davidson County.   
  The commissioner is authorized to promulgate rules and regulations to prescribe minimum standards for the establishment of liabilities and reserves resulting from insurance contracts issued by an insurer, including, but not limited to, unearned premium reserves and liabilities for claims and losses unpaid and incurred but not reported claims. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   The rules promulgated under this section shall contain provisions stating that before the commissioner takes any action pursuant to the rules and regulations, the commissioner shall give written notice to the insurer involved, stating specifically the nature of any alleged violation, and fixing a time and place, at least ten (10) days thereafter, when a hearing on the matter shall be held. The burden of proof shall be on the commissioner to show the lack of minimum standards under the rules promulgated under this section by the preponderance of the evidence. After the hearing, or upon failure of the accused to appear at the hearing, the commissioner, if the commissioner finds a violation, may enter an appropriate order under this section as the commissioner deems advisable.   When the commissioner takes action in any or all of the ways set out in this section, the party aggrieved may appeal from the action to the chancery court of Davidson County.   
  Any life, accident, hospitalization and health insurance company doing business in this state that solicits applications or offers for contracts or contracts of insurance primarily by mail, radio, television, publication of advertisements in a newspaper, magazine, or by any other printed matter shall provide at least one (1) office for the handling of claims in one (1) of the following cities: Memphis, Nashville, Knoxville or Chattanooga.   Any insurance policy issued for delivery to a resident of this state shall contain information whereby a policyholder may locate the nearest claims office referred to in subsection (a).   
 Sections 56-3-201 and 56-3-203 do not apply to solicitations, offers, or contracts that are taken or made directly by a duly licensed resident agent.  
 Life, accident, hospitalization and health insurance companies that violate  56-3-201 shall be fined no less than five hundred dollars ($500) nor more than one thousand dollars ($1,000) for each day a violation occurs in each city named in  56-3-201.  
  No domestic life insurance company, whether incorporated by special act or under a general law of this state, shall underwrite or participate in the underwriting of an offering of securities or property by any other person; nor shall the company enter into any agreement to withhold from sale any of its property, but the disposition of its property shall be at all times within the control of its board of directors.    No investment or loan, except policy loans, shall be made by the life insurance company, unless the investment or loan first has been authorized by the board of directors or by a committee appointed by the board and charged with the duty of supervising the investment or loan; provided, that the acquisition and disposal of short-term bonds, debentures, notes, commercial paper, certificates of deposits or similar evidences of indebtedness, having a remaining maturity of ninety (90) days or less, if in accordance with  56-3-303 and if done under the general supervision and periodic review of the board or a committee appointed by the board, shall not require specific approval of the board or committee.   Membership on the board of directors shall not be a requirement for eligibility to membership on the committee.     
 As used in this part:   Acceptable collateral means:  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   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;     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:  Excluding the assets of separate accounts, the investments of which are not subject to this part;     The amount of the liability recorded on the insurer's statutory balance sheet for:        The return of acceptable collateral received in a reverse repurchase transaction or a securities lending transaction; and   Cash received in a dollar roll transaction;    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;   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;   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;   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;   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;   (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);   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;   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;   Counterparty exposure amount means:   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:   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   Zero (0) if the liquidation of the derivative instrument would not result in a final cash payment to the insurer;   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;   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)  Derivative instrument means any agreement, option or instrument, or any series or combinations of an agreement, option or instrument:   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   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)  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;   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;   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);   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:   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   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);   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);   Fixed charges includes interest on all obligations and amortization of debt discount and expenses;   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;   (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:   The issuing person is a shell business entity; and   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;   For purposes of subdivision (16)(A):   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;   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   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;   Foreign jurisdiction means:   A jurisdiction other than a domestic jurisdiction; or   A commonwealth, territory or possession of the United States;   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;   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;   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;   Hedging transaction means a derivative transaction that is entered into and maintained to manage:   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   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;   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;   Investment practices means transactions of the types described in  56-3-303(a)(10), (15), (18) and (21);   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;   NAIC means the National Association of Insurance Commissioners;   NAIC-SVO means the securities valuation office of the National Association of Insurance Commissioners;   (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;   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;   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;   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;   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;   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;   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;   Potential exposure means:   As to a futures position, the amount of initial margin required for that position; or   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;   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;   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;   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;   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;   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;   Securities exchange means:   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.);   Private Offerings Resales and Trading through Automated Linkages (PORTAL); or   A designated offshore securities market as defined in Securities Exchange Commission Regulation S, 17 CFR part 230;   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;   State includes the several states, the District of Columbia, the Commonwealth of Puerto Rico and the possessions of the United States;   SVO Rating means the numerical ranking designation of one (1) through six (6) assigned to securities as determined by the NAIC-SVO;   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;   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;   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   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.  
  Domestic life insurance companies may, directly or indirectly through an investment affiliate, invest their assets and engage in investment practices as follows:  In obligations, not in default as to principal or interest, that are valid and legally authorized obligations issued, assumed or guaranteed by the United States, or by any state of the United States, or by any county, city, town, village, municipality or district in any state, or by any political subdivision of the county, city, town, village, municipality or district, or by any civil division or public instrumentality of one (1) or more of the governmental units, if, by statutory or other legal requirements applicable to the governmental unit, such obligations are payable, as to both principal and interest, from taxes levied, or by the law required to be levied, upon all taxable property or all taxable income within the jurisdiction of the governmental unit or from adequate special revenues pledged or otherwise appropriated or by the law required to be provided for the purpose of the payment, but not including any obligations payable solely out of special assessments on properties benefited by local improvements;   In obligations, or in commercial paper or bankers' acceptances, or similar evidences of indebtedness customarily issued at a discount from principal value, issued, assumed, or guaranteed by any business entity created or existing under the laws of the United States, or any state of the United States, that are not in default as to principal or interest; provided, that either:  The net earnings of the issuing, assuming or guaranteeing business entity available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company have averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period, if during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; or   Either the obligation is or the issuing, assuming or guaranteeing business entity's or business entities' long-term obligations are rated one (1) of the four (4) highest grades by any of the nationally recognized statistical rating organizations recognized by the NAIC-SVO or one (1), two (2) or three (3) by the NAIC-SVO;     In preferred stock or shares of any business entity created or existing under the laws of the United States or any state of the United States; provided, that:  The aggregate net earnings of the issuing business entity available for its fixed charges and dividends for a period of three (3) fiscal years next preceding the date of acquisition is at least equal to one and one fourth (1.25) times the sum of its aggregate fixed charges, full contingent interest and preferred dividend requirements for the same period or rated one (1) of the four (4) highest grades by any of the nationally recognized statistical rating organizations recognized by the NAIC-SVO or one (1), two (2) or three (3) by the NAIC-SVO; and   The investments made under the authority of this subdivision (a)(3) shall not at any time cause the insurance company's holdings:   Of the preferred stock or shares of any one (1) business entity to exceed two percent (2%) of the admitted assets of the insurance company; or   Of the preferred stock or shares of all business entities to exceed fifteen percent (15%) of the admitted assets of the insurance company;        In equity interests of any solvent business entity created or existing under the laws of the United States or of any state of the United States; provided, that:   If the equity interest is a common stock, the business entity has earned, during the period of five (5) fiscal years next preceding the date of acquisition by the insurance company, an aggregate sum available for dividends upon its common stock or shares equal at least to an aggregate sum that would have been sufficient to pay dividends of six percent (6%) per annum upon the par or stated value of all its common stock or shares outstanding during the period;   If the equity interests are in a real estate company,  56-3-305 and 56-3-306 shall apply with respect to the equity interests and to the real property owned by the real estate company, and the amount invested in the equity interests of the real estate company shall be included with the aggregate of all of the insurance company's holdings and investments for the purposes of  56-3-305(b);   Investments made under the authority of this subdivision (a)(4)(A) shall not at any time cause the insurance company's holdings of equity interests in:  Any one (1) business entity to exceed one percent (1%) of the admitted assets of the insurance company; or   All business entities to exceed the larger of:  Ten percent (10%) of the admitted assets of the insurance company; or   Fifty percent (50%) of the amount by which the capital and surplus of the insurance company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state; and       For purposes of determining the holdings of the equity interests pursuant to this subdivision (a)(4)(A), the value of the equity interests shall be the value of the equity interests shown on the insurer's statutory financial statement most recently required to be filed with the commissioner;     The commissioner may approve a plan for an insurer to make investments in equity interests of business entities in an aggregate amount not to exceed an additional ten percent (10%) of its admitted assets if the commissioner determines that the plan contains adequate quality and diversification standards;   Investments made and transactions entered into pursuant to subdivision (a)(20)(A) shall be included in determining an insurer's compliance with subdivision (a)(4)(A) and, if the commissioner has approved a plan for the insurer under subdivision (a)(4)(B), subdivision (a)(4)(B) in the aggregate;     Upon security of promissory notes amply secured by pledge of any bonds or other securities in which the companies are authorized to invest their funds;   Upon the security of their own policies; provided, that the loan upon any policy shall not exceed the amount of loan value provided in  56-7-2309;   In the obligations, and/or stock where stated, of the following agencies of the government of the United States, whether or not the obligations are guaranteed by the government:  Commodity credit corporation;   Federal intermediate credit banks;   Federal land banks;   Banks for cooperatives;   Federal home loan banks, and stock of such banks;   Federal national mortgage association, and stock of the federal national mortgage association, when acquired in connection with sale of mortgage loans to the association; and   Any other similar agency of the government of the United States and of similar financial quality;     In lawfully authorized bonds or other evidences of indebtedness issued or guaranteed by the International Bank for Reconstruction and Development, or the Inter-American Development Bank, the African Development Bank and the Asian Development Bank; provided, that the aggregate amount of the insurance company's investment under this subdivision (a)(8) shall not exceed five percent (5%) of the admitted assets of the insurance company;   In shares in federally insured building and loan and savings and loan institutions; provided, that the aggregate of investments under this subdivision (a)(9) shall not exceed one percent (1%) of the admitted assets of the insurance company;   In other types of investments and transactions, in addition to those authorized by this section or other sections of the code, subject to the approval of the commissioner. An insurer shall not be required to have exhausted its authority to make investments or engage in transactions under subdivision (a)(15) prior to seeking any approval from the commissioner under this subdivision (a)(10). Any investment made or transaction entered into by an insurer pursuant to approval from the commissioner under this subdivision (a)(10) shall not be required to be taken into account in determining compliance with subdivision (a)(15);    Subject to subdivision (a)(11)(C), in loans, or participations in loans, secured by first mortgages, or second mortgages so long as the insurer holds the first mortgages that are senior to the second mortgages, upon improved, unencumbered real property, or upon leasehold estates in improved real property in the United States, not exceeding, however, seventy-five percent (75%) of the value of the property or leasehold estate, repayable in not more than thirty (30) years;   All loans secured by leasehold estates must provide for amortization of principal at least once in each year in amounts sufficient to completely amortize the loan at least twenty-one (21) years prior to expiration of the lease term, inclusive of the term or terms which may be provided by an enforceable option or options of renewal;   Real property and leasehold estates shall not be deemed to be encumbered within the meaning of this section by reason of the existence of unpaid assessments and taxes not delinquent, mineral, oil or timber rights, easements or rights-of-way for public highways, private roads, railroads, telegraph, telephone, electric light and power lines, drains, sewers or other similar easements or rights-of-way, liens for service and maintenance of water rights when not delinquent, party wall agreements, building restrictions, or other restrictive covenants or conditions, or leases under which rents or profits are reserved to the owner, if in any event the security for the loan is a first lien, or is a second lien so long as the insurer also holds the first lien that is senior to the second lien, upon the real property or leasehold estate and if there is no condition or right of reentry or forfeiture under which, in the case of real property other than leaseholds, the lien can be cut off, subordinated or otherwise disturbed, or under which, in the case of leaseholds, the insurance company is unable to continue the lease in force for the duration of the loan;   A loan guaranteed or insured in full by the Administrator of Veterans' Affairs pursuant to the Servicemen's Readjustment Act of 1944 (38 U.S.C.  3701-3725), may be subject to a prior encumbrance insured by the federal housing administrator or commissioner, and the foregoing limitations in respect to value and repayment shall not apply to a loan that is:   Insured by, or for which a commitment to insure has been made by, the federal housing administrator or commissioner pursuant to the National Housing Act (12 U.S.C.  371 et seq.);   Guaranteed by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944, except that, if only a portion of a loan is so guaranteed, the limitation of value shall apply to the portion not so guaranteed; or   Insured by the administrator pursuant to the Servicemen's Readjustment Act of 1944;       In purchase money mortgages or like securities received by the insurance company upon the sale or exchange of real property acquired pursuant to  56-3-305;    In obligations of persons organized under the laws of the United States or any state of the United States, secured by assignment of lease or leases, or the rentals payable under the leases, of real or personal property, or both, to:   The United States or any state of the United States, or any county, city, town, village, municipality or district in the state or any political subdivision of the county, city, town, village, municipality or district or any civil division or public instrumentality of one (1) or more of the governmental entities; or   One (1) or more persons created or existing under the laws of the United States, or of any state; provided, that:  The fixed rentals assigned shall be sufficient to repay the indebtedness within the unexpired term of the lease, exclusive of the term that may be provided by an enforceable option of renewal;   The lessee or guarantor of the lease or leases has not defaulted in payment of principal of or interest on any of its bonds, notes, debentures, or other evidences of indebtedness during the five (5) fiscal years immediately preceding the date of the investment;   The net earnings of each lessee or guarantor of the lease under this subdivision (a)(13)(A)(ii) available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company have averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period and during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year or is rated one (1) of the four (4) highest grades by any of the nationally recognized statistical rating organizations recognized by the NAIC-SVO or one (1), two (2) or three (3) by the NAIC-SVO; and   A first lien on the interest of the lessor in the unencumbered property so leased is obtained as additional security for the indebtedness;       Notwithstanding subdivision (a)(13)(A), any NAIC-SVO credit tenant loan that meets the requirements of subdivision (a)(2) shall be qualified under subdivision (a)(2);     In the purchase and ownership of vessels, vehicles, or rolling stock used or useful for the transportation of persons, goods, products or commodities, or of machinery or equipment used by manufacturing, processing or financial establishments, or of communications equipment used by radio or television stations, or of store fixtures used by retail establishments, which transportation equipment, or machinery or equipment, or communications equipment or store fixtures are or will become subject to contracts for the sale or use thereof under which contractual payments are to be made that may reasonably be expected to return the principal of, and provide earnings on, the investment within the anticipated useful life of the property, the anticipated useful life to be not less than five (5) years. The aggregate of the company's investments under this subdivision (a)(14) shall not exceed three percent (3%) of the company's admitted assets;   In loans, investments or transactions in addition to those authorized under other subdivisions of this subsection (a) or under other sections of this code, notwithstanding any limitations or prohibitions contained in  56-3-305(a)(5) that might otherwise be applicable; provided, that for the purposes of subdivision (a)(11) and this subdivision (a)(15), that the portion of a loan, or participation in the loan, secured by a mortgage upon real property that does not exceed seventy-five percent (75%) of the value of the property shall be deemed to be a permitted investment under subdivision (a)(11) and the remainder of the loan, or participation in the loan, may be deemed to be made under this subdivision (a)(15); and provided further, that for the purposes of  56-3-305(a)(5)(B), that the portion of an investment in a single piece or adjoining pieces of real property acquired or held under the authority of  56-3-305 (a)(5) that does not exceed two percent (2%) of the company's admitted assets shall be deemed to be a permitted investment under subdivision (a)(5), and the remainder of the investment shall be deemed to be made under this subdivision (a)(15); and provided, further, that if any investments made or transactions entered into under any other subdivision of this section or  56-3-304 exceed the limits specified in any other subdivision of this section or  56-3-304, then the excess portion of the investment or transaction shall be an investment or transaction under this subdivision (a)(15). Any loan, investment or transaction originally made under this subdivision (a)(15) that would subsequently, if it were then being made, qualify as an authorized investment or transaction under another subdivision of this subsection (a) or under another section of this code shall thenceforth be deemed to be an authorized investment or transaction under the other subdivision or section. The aggregate of the company's loans, investments and transactions under this subdivision (a)(15) shall not exceed the lesser of:  Ten percent (10%) of the company's admitted assets; or   The amount by which the capital and surplus of the company exceed the minimum capital and surplus required to form a new company to do the kind or kinds of insurance business the company is authorized to transact in this state; provided, that the limitations established by subdivisions (a)(15)(A) and this subdivision (a)(15)(B) in no event shall be less than five percent (5%) of the admitted assets of the company;     In investment pools that:  Invest only in:   Obligations that an insurer may acquire under this section or  56-3-304 that are rated one (1) of the four (4) highest grades by any of the nationally recognized statistical rating organizations recognized by the NAIC-SVO or one (1) or two (2) by the NAIC-SVO and have:  A remaining term to maturity of three hundred ninety-seven (397) days or less or a put that entitles the holder to receive the principal amount of the obligation, which put may be exercised through maturity at specified intervals not exceeding three hundred ninety-seven (397) days; or   A remaining term to maturity of three (3) years or less and a floating interest rate that resets no less frequently than quarterly on the basis of a current short-term index (federal funds, prime rate, treasury bills, London InterBank Offered Rate (LIBOR) or commercial paper) and is subject to no maximum limit, if the obligations do not have an interest rate that varies inversely to market interest rate changes;     Securities lending, repurchase and reverse repurchase transactions that meet the requirements of subdivision (a)(18); and   Money market mutual funds as authorized in subdivision (a)(17); provided, that this short-term investment pool shall not acquire investments in any one business entity that exceed ten percent (10%) of the total assets of the investment pool;     Invest only in investments that an insurer may acquire under this section or  56-3-304, if the insurer's proportionate interest in the amount invested in these investments does not exceed the applicable limits of this section and  56-3-304, and the aggregate amount of all investments in the other investment pools may not exceed twenty-five percent (25%) of the insurer's admitted assets;   An insurer shall not acquire an investment in an investment pool under this subdivision (a)(16) if, after giving effect to the investment, the aggregate amount of investments in all investment pools then held by the insurer would exceed thirty-five percent (35%) of its admitted assets;   For an investment in an investment pool to be qualified under this subdivision (a)(16), the investment pool shall not:   Acquire securities issued, assumed, guaranteed or insured by the insurer or an affiliate of the insurer; or   Borrow or incur any indebtedness for borrowed money, except for securities lending and reverse repurchase transactions;     For an investment pool to be qualified under this subdivision (a)(16):   The manager of the investment pool shall:  Be organized under the laws of the United States or a state of the United States or the District of Columbia and designated as the pool manager in a pooling agreement; and   Be the insurer, an affiliated insurer, a business entity affiliated with the insurer, a custodian bank, a business entity registered under the Investment Advisors Act of 1940 (15 U.S.C.  80a-1 et seq.), or any similar, applicable state statute, or, in the case of a reciprocal insurer or interinsurance exchange, its attorney-in-fact, or in the case of a United States branch of an alien insurer, its United States manager or affiliates or subsidiaries of its United States manager;     The pool manager or an entity designated by the pool manager of the type set forth in subdivision (a)(16)(E)(i)(b ) shall maintain detailed accounting records setting forth:  The cash receipts and disbursements reflecting each participant's proportionate investment in the investment pool;   A complete description of all underlying assets of the investment pool, including amount, interest rate, maturity date, if any, and other appropriate designations; and   Other records that, on a daily basis, allow third parties to verify each participant's investments in the investment pool;     The assets of the investment pool shall be held in one (1) or more accounts, in the name or on behalf of the investment pool, either under a custody agreement or trust agreement with a custodian bank or at the principal office of the pool manager. The applicable agreement shall:  State and recognize the claims and rights of each participant;   Acknowledge that the underlying assets of the investment pool are held solely for the benefit of each participant in proportion to the aggregate amount of its investments in the investment pool; and   Contain an agreement that the underlying assets of the investment pool shall not be commingled with the general assets of the custodian bank or any other person;       The pooling agreement for each investment pool shall be in writing and shall provide that:   The insurer, its subsidiaries, affiliates or any pension or profit sharing plan of the insurer, its subsidiaries and affiliates or, in the case of a United States branch of an alien insurer, affiliates or subsidiaries of its United States manager, and any unaffiliated insurer shall, at all times, hold one hundred percent (100%) of the interests in the investment pool;   The underlying assets of the investment pool shall not be commingled with the general assets of the pool manager or any other person;   In proportion to the aggregate amount of each pool participant's interest in the investment pool:  Each participant owns an undivided interest in the underlying assets of the investment pool; and   The underlying assets of the investment pool are held solely for the benefit of each participant;     A participant, or in the event of the participant's insolvency, bankruptcy, or receivership, its trustee, receiver, conservator or other successor-in-interest, may withdraw all or any portion of its investment from the investment pool under the terms of the pooling agreement;   Withdrawals may be made on demand without penalty or other assessment on any business day, but settlement of funds shall occur within a reasonable and customary period thereafter; provided, that in the case of publicly traded securities, settlement shall not exceed five (5) business days, and in the case of all other securities and investments, settlement shall not exceed ten (10) business days. Distributions under this subdivision (a)(16) shall be calculated in each case net of all then applicable fees and expenses of the investment pool. The pooling agreement shall provide that the pool manager shall distribute to a participant, at the discretion of the pool manager:  In cash, the then fair market value of the participant's pro rata share of each underlying asset of the investment pool;   In kind, a pro rata share of each underlying asset; or   In a combination of cash and in-kind distributions, a pro rata share in each underlying asset; and     The pool manager shall make the records of the investment pool available for inspection by the commissioner; and     An investment in an investment pool shall not be deemed to be an investment under subsection (b). The formation of an investment pool shall be subject to the reporting requirements of chapter 11 of this title, but investments in and withdrawals and distributions from an investment pool shall not be subject to the reporting requirements;      In money market mutual funds as defined by 17 CFR 270.2a-7 under the Investment Company Act of 1940 (15 U.S.C.  80a-1 et seq.), that may be either of the following:   Government money market mutual fund that is a money market mutual fund that:  Invests only in obligations issued, guaranteed or insured by the federal government of the United States or collateralized repurchase agreements composed of these obligations; and   Qualifies for investment without a reserve under 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; or     Class one (1) money market mutual fund that is a money market mutual fund that qualifies for investment using the bond class one (1) reserve factor under 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;     For purposes of complying with this subdivision (a)(17), money market funds qualifying for listing within these categories must conform to 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 the Purposes and Procedures Manual of the Securities Valuation Office of the NAIC;     In securities lending transactions, either directly, or through a custodian bank, or through an agent approved by the commissioner, repurchase transactions, reverse repurchase transactions and dollar roll transactions, subject to the following conditions:  The insurer shall enter into a written agreement for all transactions that shall require each transaction, except dollar roll transactions, to terminate no more than one (1) year from its inception;   Cash received in a transaction under this subdivision (a)(18) shall be invested in accordance with subsection (a) or  56-3-304 and in a manner that recognizes the liquidity needs of the transaction or used by the insurer for its general corporate purposes. For so long as the transaction remains outstanding, the insurer, its agent or custodian shall maintain, as to acceptable collateral received in a transaction under this subsection (a), either physically or through the book entry systems of the Federal Reserve, Depository Trust Company, Participants Trust Company or other securities depositories approved by the commissioner:   Possession of the acceptable collateral;   A perfected security interest in the acceptable collateral; or   In the case of a jurisdiction outside of the United States, title to, or rights of a secured creditor to, the acceptable collateral; and     The limitations of subdivision (a)(19) shall not apply to the business entity counterparty exposure created by transactions under this subdivision (a)(18). An insurer shall not enter into a transaction under this subdivision (a)(18) if, as a result of and after giving effect to the transaction:   The aggregate amount of securities then loaned, sold to or purchased from any one (1) business entity counterparty under this subdivision (a)(18) would exceed five percent (5%) of its admitted assets. In calculating the amount sold to or purchased from a business entity counterparty under repurchase or reverse repurchase transactions, effect may be given to netting provisions under a master written agreement; or   The aggregate amount of all securities then loaned, sold to or purchased from all business entities under this subdivision (a)(18) would exceed forty percent (40%) of its admitted assets;     The amount of collateral required for securities lending, repurchase and reverse repurchase transactions is the amount required pursuant to 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;      Except as otherwise authorized by subdivisions (a)(4)(B), (10), (15), (16)(A), (17), (18), (22) and (24), an insurer may under this section and  56-3-304 acquire obligations of, preferred stock or an equity interest in or incur counterparty exposure amounts to any one business entity, or as to asset-backed securities, secured by or evidencing an interest in a single asset or pool of assets, but not to exceed three percent (3%) of the insurer's admitted assets; and provided, that investments and transactions that are subject to subdivisions (a)(3)(B)(i), (a)(4)(A)(iii)(a ) and (a)(20)(B) shall be taken into account in determining compliance with this subdivision (a)(19)(A);   Notwithstanding subdivision (a)(19)(A), asset-backed securities, not in default as to principal or interest, that are issued, assumed, or guaranteed by the United States, or that are required to be considered to be obligations issued by the United States by the federal Secondary Mortgage Market Enhancement Act of 1984 (12 U.S.C.  1701 et seq.), shall not be subject to the limitations of subdivision (a)(19)(A);     Except as otherwise authorized by subdivisions (a)(10), (15), (18), (22) and (24), an insurer shall not, under this section or  56-3-304, acquire an obligation of, or preferred stock or an equity interest in or incur a counterparty exposure amount to any person, or as to asset-backed securities, secured by or evidencing an interest in a single asset or pool of assets, if after giving effect to the investment or transaction:  The aggregate amount of the obligations, preferred stock, equity interests and counterparty exposure amounts then held by the insurer that are rated NAIC-SVO 4 or an equivalent rating by any of the nationally recognized statistical rating organizations recognized by the NAIC-SVO would exceed five percent (5%) of its admitted assets; and   Investments made and transactions entered into under the authority of this subdivision (a)(20) shall not at any time cause:   The insurance company's holdings of obligations of preferred stock or equity interests in any one (1) business entity to exceed one percent (1%) of the insurance company's admitted assets;   The insurance company's holdings of asset-backed securities secured by or evidencing an interest in a single asset or pool of assets to exceed one percent (1%) of the insurance company's admitted assets; and   The insurance company's aggregate counterparty exposure amounts with respect to any one (1) business entity to exceed one percent (1%) of the insurance company's admitted assets;       In hedging transactions, income generation transactions and replication transactions as follows:  Prior to entering into any derivative transaction, the board of directors of the insurer shall approve a derivative instruments use plan that:   Describes investment objectives and risk constraints, such as counterparty exposure amounts;   Defines permissible transactions including identification of the risks that may be hedged, the assets or liabilities that may be replicated and permissible types of income generation transactions; and   Requires compliance with internal control procedures;     The insurer shall establish written internal control procedures that provide for:   A quarterly report to the board of directors that reviews:  All derivative transactions entered into, outstanding or closed out;   The results and effectiveness of the derivative instruments program; and   The credit risk exposure to each counterparty for over-the-counter derivative transactions based upon the counterparty exposure amount;     A system for determining whether hedging, income generation and/or replication strategies utilized have been effective;   A system of regular reports, not less frequently than monthly, to management including:  A description of all derivative transactions entered into, outstanding or closed out during the period since the last report;   The purpose of each outstanding derivative transaction;   A performance review of the derivative instruments program; and   The counterparty exposure amounts for over-the-counter derivative transactions;     Written authorizations that identify the responsibilities and limitations of authority of persons authorized to effect and maintain derivative transactions;   Documentation appropriate for each transaction including:  The purpose of the transaction;   The assets or liabilities to which the transaction relates;   The specific derivative instrument used in the transaction;   For over-the-counter derivative instrument transactions, the name of the counterparty and the counterparty exposure amount; and   For exchange-traded derivative instruments, the name of the exchange and the name of the firm that handled the transaction;       Whenever the derivative transactions entered into under this subdivision (a)(21) are not in compliance with this subdivision (a)(21) or, if continued, may now or subsequently create a hazardous financial condition of the insurer that affects its policyholders, creditors or the general public, the commissioner may, after notice and an opportunity for a hearing, order the insurer to take such action as may be reasonably necessary to rectify the noncompliance or the hazardous financial condition, or prevent an impending hazardous financial condition from occurring;   An insurer shall include all counterparty exposure amounts in determining compliance with the limitations of subdivisions (a)(19) and (a)(20);     (a)  Prior to entering into hedging transactions, an insurer must obtain the commissioner's approval of the insurer's plan regarding the use of hedging transactions; provided, that an insurer that has obtained the commissioner's approval to enter into hedging transactions prior to July 1, 1998, shall not be required to obtain the commissioner's approval of the plan;         Subject to subdivision (a)(21)(E)(i)(a ), an insurer may enter into hedging transactions under this subdivision (a)(21)(E), if as a result of and after giving effect to each transaction:  The aggregate statutory financial statement value of all outstanding options, other than collars, caps, floors, swaptions and warrants not attached to another financial instrument purchased by the insurer, pursuant to this subdivision (a)(21)(E), does not exceed seven and one half percent (7.5%) of its admitted assets;   The aggregate statutory financial statement value of all outstanding options, other than collars, swaptions, warrants, caps and floors written by the insurer pursuant to this subdivision (a)(21)(E) does not exceed three percent (3%) of its admitted assets; and   The aggregate potential exposure of all outstanding collars, swaps, forwards and futures entered into or acquired by the insurer pursuant to this subdivision (a)(21)(E) does not exceed six and one half percent (6.5%) of its admitted assets;  Subject to the commissioner's prior approval of the insurer's plan regarding use of income generation transactions, an insurer may enter into an income generation transaction if:   As a result of and after giving effect to the transaction, the aggregate statutory financial statement value of admitted assets that are then subject to call or that generate the cash flows for payments required to be made by the insurer under caps and floors sold by the insurer and then outstanding under this subdivision (a)(21)(F), plus the statutory financial statement value of admitted assets underlying derivative instruments then subject to calls sold by the insurer and outstanding under this subdivision (a)(21)(F), plus the purchase price of assets subject to puts then outstanding under this subdivision (a)(21)(F) does not exceed ten percent (10%) of its admitted assets; and   The transaction is one (1) of the following types and meets the other requirements specified below that are applicable to these types of transactions:  Sales of call options on assets; provided, that the insurer holds or has a currently exercisable right to acquire the underlying assets during the entire period that the option is outstanding;   Sales of put options on assets; provided, that the insurer holds sufficient cash, cash equivalents or interests in a short-term investment pool to purchase the underlying assets upon exercise during the entire period that the option is outstanding, and has the ability to hold the underlying assets in its portfolio. If the total market value of all put options sold by the insurer exceeds two percent (2%) of the insurer's admitted assets, the insurer shall set aside pursuant to a custodial or escrow agreement cash or cash equivalents having a market value equal to the amount of its put option obligations in excess of two percent (2%) of the insurer's admitted assets during the entire period the option is outstanding;   Sales of call options on derivative instruments, including swaptions; provided, that the insurer holds or has a currently exercisable right to acquire assets generating the cash flow to make any payments for which the insurer is liable pursuant to the underlying derivative instruments during the entire period that the call options are outstanding and has the ability to enter into the underlying derivative transactions for its portfolio; and   Sales of caps and floors; provided, that the insurer holds or has a currently exercisable right to acquire assets generating the cash flow to make any payments for which the insurer is liable pursuant to the caps and floors during the entire period that the caps and floors are outstanding;       Subject to the commissioner's prior approval of the insurer's plan regarding use of replication transactions, an insurer may enter into replication transactions; provided, that:   The insurer would otherwise be authorized under this part to invest its funds in the asset being replicated; and   The asset being replicated is subject to all the provisions and limitations on the making of the replicated asset specified in this part with respect to investments by the insurer as if the transaction constituted a direct investment by the insurer in the replicated asset;     An insurer may purchase or sell one (1) or more derivative instruments to offset, in whole or in part, any derivative instrument previously purchased or sold, as the case may be, without regard to the quantitative limitations of this subsection (a); provided, that the offsetting transaction utilizes the same type of derivative instrument as the derivative instrument being offset; and   Each derivative instrument shall be:   Traded on a securities exchange;   Entered into with, or guaranteed by, a person;   Issued or written by or entered into with the issuer of the underlying interest on which the derivative instrument is based; or   In the case of futures, traded through a broker that is registered as a futures commission merchant under the Commodity Exchange Act (7 U.S.C.  1 et seq.), or that has received exemptive relief from registration under rule 30.10 promulgated under the Commodity Exchange Act;       Subject to subdivision (a)(22)(C), if a domestic life insurance company, pursuant to a merger or consolidation, acquires an investment or transaction that was an authorized investment or transaction of the company that was merged or consolidated with the domestic life insurance company but does not qualify as an authorized investment or transaction under this part at the time the merger or consolidation occurs, regardless of whether or not the investment or transaction would be authorized under subdivision (a)(15), then the investment or transaction shall be an authorized investment or transaction under this subdivision (a)(22)(B), and shall not be required to be applied toward the limitations contained in subdivision (a)(15), for a period of five (5) years after the date on which the merger or consolidation occurs, after which period it shall no longer be an authorized investment or transaction under this subdivision (a)(22)(B), unless within the five-year period:  The investment or transaction qualifies as an authorized investment or transaction under another subdivision of this subsection (a) or another section of this code, including, without limitation, subdivision (a)(15) if the domestic life insurance company so elects;   The commissioner authorizes the investment or transaction in the plan of merger or consolidation approved by the commissioner;   The commissioner, upon request of the insurer, authorizes an extension of the five-year time period; or   The commissioner approves the investment or transaction pursuant to this subdivision (a)(22)(B);     The aggregate amount of a domestic life insurance company's investments and transactions under this subdivision (a)(22)(B), excluding investments and transactions authorized under any of subdivisions (a)(22)(B)(i)(a ), (b ) and (d ), shall not exceed twenty-five percent (25%) of the domestic life insurance company's capital and surplus after giving effect to the merger or consolidation;     If a domestic life insurance company, pursuant to a merger or consolidation, acquires a mortgage loan, or participation in the mortgage loan, that would have been authorized under subdivision (a)(11), and under subdivision (a)(15) as to the portion of the mortgage loan, if any, that exceeded seventy-five percent (75%) of the value of the property, at the time the company that was merged or consolidated with the domestic life insurance company invested in the mortgage loan, or participation in the mortgage loan, then the mortgage loan, or participation in the mortgage loan, shall be authorized under subdivision (a)(11), and under subdivision (a)(15) as to the portion of the mortgage loan, if any, that exceeded seventy-five percent (75%) of the value of the property;   The commissioner shall have full discretion in selecting a method for calculating values of investments and transactions that an insurer acquires through a merger or consolidation; provided, that the method is consistent with any applicable provisions of this code and any applicable valuation method that the NAIC is currently using at that time with respect to investments and transactions; if there is a conflict between a provision of this code and an NAIC valuation method, the provision of this code shall control;  The qualification or disqualification of an investment under one (1) subdivision of this section or section of this code does not prevent its qualification in whole or in part under another section of this code, and an investment authorized by more than one (1) section of this code may be held under whichever authorizing section of this code the insurer elects. An investment or transaction qualified under any section of this code at the time it was acquired or entered into by the insurer shall continue to be qualified under that section of this code. An investment, in whole or in part, may be transferred from time to time, at the election of the insurer, to the authority of any section of this code under which it then qualifies, whether or not it originally qualified under that section of this code;   The acquisition of subsidiaries by a domestic life insurer shall be subject to the following:   The percentage authorizations and limitations set forth in any or all of this section and  56-3-304 and 56-3-305, but subject to  56-3-306, shall apply only at the time of the original acquisition of an investment or at the time a transaction is entered into, and shall not be applicable to the insurer or the investment or transaction thereafter except as provided in subdivision (a)(23). In addition, any investment or transaction, once qualified under any subsection of this section, shall remain qualified notwithstanding any refinancing, restructuring or modification of the investment or transaction; provided, that the insurer shall not engage in any refinancing, restructuring or modification of any investment or transaction for the purpose of circumventing the requirements or limitations of this part. The commissioner shall have full discretion to value investments and transactions that an insurer holds at the time of an examination of the insurer using a method of calculating the values that the commissioner selects in the commissioner's discretion; provided, that the method is consistent with any applicable provisions of this code and any applicable valuation method that the NAIC is currently using at the time with respect to investments and transactions. If there is a conflict between a provision of this code and an NAIC valuation method, the provision of this code shall control. Notwithstanding this subdivision (a)(25), if the commissioner determines that the continued operation of an insurer may be hazardous to its policyholders, its creditors or the general public, then the commissioner may issue an order consistent with applicable statutes requiring the insurer to limit or withdraw from certain investments or transactions or discontinue certain practices as to investments or transactions to the extent the commissioner deems necessary.   Notwithstanding other subdivisions of this section and  56-3-304, an insurer may acquire an investment in or enter into a transaction with a business entity in which the insurer already holds one (1) or more investments or with which the insurer has entered into one (1) or more transactions if the investment is acquired or the transaction is entered into in order to protect an investment or transaction previously made in or with that business entity, but the aggregate amount of investments and transactions so acquired and entered into may not exceed five percent (5%) of the insurer's capital and surplus; and    Except as provided in subdivisions (b)(2)(B) and (C), the aggregate amount that may be invested in subsidiaries in the form of common stock, preferred stock or debt obligations shall not exceed the amount by which the capital and surplus of the insurer exceed the minimum capital and surplus required to form a new company to do the kind or kinds of insurance business the insurer is authorized to transact in this state. If the subsidiary to be acquired is one (1) or more insurance companies formed under the laws of a foreign country, the total amount of holding in the foreign companies shall not exceed three percent (3%) of the admitted assets of the domestic life insurance company and shall be included for purposes of the overall limitation on amounts of investments in subsidiaries;   A domestic life insurer may invest in excess of the amount permitted in subdivision (b)(2)(A) in the common stock, preferred stock or debt obligations of one (1) or more investment subsidiaries, subject to the limitations in subdivision (a)(15) and, with the approval of the commissioner, a domestic life insurer may invest any amount in excess of the amount permitted in subdivision (b)(2)(A) in common stock, preferred stock or debt obligations of one (1) or more subsidiaries; provided, that after the investment, the insurer's surplus as regards policyholders shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs; and   If the subsidiary acquired by a domestic life insurer is engaged exclusively in holding title to or holding title to and managing or developing real property, the amount of the insurer's investment in the real property shall not be included in calculating the aggregate limit on investments in subsidiaries; provided, that the amount invested in the subsidiary is included with the aggregate of all the insurer's holdings for purposes of  56-3-305(b), and the real property owned by the subsidiary shall be subject to  56-3-305(a)(5).  Investments in common stock, preferred stock or debt obligations of subsidiaries made pursuant to this subsection (b) shall not be limited by or be subject to any of the otherwise applicable authorizations, restrictions or limitations applicable to the investments of domestic life insurers, except as provided in subdivision (b)(2)(C).      Whether any investment pursuant to this subsection (b) meets the applicable requirements of this subsection (b) shall be determined on a pro forma basis immediately after the investment is made, taking into account:  The capital and surplus of the insurer and the minimum capital and surplus required at that time for a new company to do the same kind or kinds of insurance business the insurer is authorized to transact in this state;   The then outstanding principal balance on all previous investments in debt obligations of subsidiaries; and   The original cost or the current book value, whichever is lower, of all previous investments in the common or preferred stock of subsidiaries.     If the insurer ceases to own more than fifty percent (50%) of the stock of a subsidiary, it shall dispose of any investment in the subsidiary made pursuant to this section within three (3) years from the time of cessation of the requisite percentage of ownership, or within a further time that the commissioner prescribes, unless at any time after the investment has been made, the investment has become a permitted investment under any other law governing investments of domestic life insurance companies.     Any investment held by an insurer on or transaction entered into by an insurer prior to March 30, 1998, that was legally authorized at the time it was made, acquired or entered into or that the insurer was authorized to hold or engage in immediately prior to March 30, 1998, but that does not conform to the requirements of this section or  56-3-304, may continue to be held by or engaged in and considered as an authorized investment or authorized transaction of the insurer; provided, that the investment or transaction is disposed of at its maturity date, if any, or within the time prescribed by the law under which it was acquired, if any; and provided further, in no event shall this subsection (c) alter the legal or accounting status of the investment or transaction.   For purposes of this section, subsidiary means a corporation in which the insurer owns and holds more than fifty percent (50%) of the voting stock of the corporation.    With respect to hedging transactions, an insurer shall be able to demonstrate to the commissioner, upon request, the intended hedging characteristics and effectiveness of the hedging transaction or combination of hedging transactions through cash flow testing, duration analysis or other appropriate analysis;   (A)  Nothing in this part prohibits the acquisition by an insurer of additional obligations, securities, or other assets if received as a dividend or as a distribution of assets, nor does this part apply to securities, obligations, or other assets accepted incident to the workout, adjustment, restructuring or similar realization of any kind of investment or transaction when deemed by the insurer's board of directors or by a committee appointed by the board of directors to be in the best interests of the insurer, if the investment or transaction had previously been authorized, nor does this part apply to assets acquired pursuant to a lawful agreement of bulk reinsurance if the assets constituted legal and authorized investments for the ceding company. No obligation, security or other asset acquired as authorized by this subdivision (a)(22) need be qualified under any other subdivision of this section or section of this code; provided, that all assets acquired pursuant to this subdivision (a)(22) shall be subject to the applicable accounting and valuation requirements that are contained in this code;   (1)  A domestic life insurance company at the time of original issue or at any other time may acquire one (1) or more subsidiaries, subject to the limitations in subdivision (b)(2). The subsidiaries may conduct any kind of lawful business and their authority to do so shall not be limited by reason of the fact that they are subsidiaries of a domestic insurer.  
  Domestic life insurance companies may, directly or indirectly through an investment affiliate, invest in investments and enter into transactions in Canada that are substantially of the same kinds, classes and investment grades as those eligible for investment under  56-3-303(a); but the aggregate amount of the investments and transactions that are held at any time by the company shall not exceed ten percent (10%) of its admitted assets, except where a greater amount is permitted pursuant to subsection (b), in which case, this subsection (a) shall not be applicable.   Any domestic life insurance company that is authorized to do business in a foreign country or that has outstanding insurance, annuity or reinsurance contracts on lives or risks resident or located in a foreign country may invest in investments and enter into transactions in the foreign country that are substantially of the same kinds, classes and investment grades as those authorized under  56-3-303(a); but the aggregate amount of the investments and transactions in a foreign country and of cash in the currency of the country that is at any time held by the company shall not, except as provided in subsection (a), exceed one and one half (1.5) times the amount of its reserves and other obligations under the contracts or the amount which the company is required by law to invest in the country, whichever is greater.   In addition to the foreign investments authorized under subsections (a) and (b), any domestic life insurance company may, directly or indirectly through an investment affiliate, invest in investments and enter into transactions in foreign jurisdictions that are substantially of the same kinds, classes and investment grades as those authorized under  56-3-303(a); but the aggregate amount of the investments made and transactions entered into pursuant to this subsection (c) shall not exceed the lesser of five percent (5%) of its admitted assets or the amount by which the capital and surplus of the company exceeds the minimum capital and surplus required for the kind or kinds of insurance the company is authorized to transact in this state.   The commissioner may approve a plan for an insurer to make foreign investments and enter into foreign transactions not to exceed an additional fifteen percent (15%) of its admitted assets, if the commissioner determines that the plan contains adequate quality and diversification standards.   Investments and transactions authorized under subsections (a)-(d) shall be subject to the limitations on investments in and transactions with any one (1) issuing business entity, or as to asset-backed securities, secured by or evidencing an interest in a single asset or pool of assets, set forth in  56-3-303(a)(3), (4), (16), (18) and (19) and to the limitations on the aggregate amount of any insurance company's investments and transactions under  56-3-303(a)(3), (4), (10), (14)-(16), (18), (20) and (23).   No more than ten percent (10%) of the insurer's admitted assets may be in foreign investments and transactions made under subsections (c) and (d) in the aggregate that are denominated in foreign currency that are not hedged pursuant to  56-3-303(a)(21).   
  A domestic life insurance company may acquire, hold and convey real property only for the following purposes and in the following manner:  The land and the building on the land in which it has its principal office and other real property that is requisite for its convenient accommodations in the transaction of its insurance business, the amount not to exceed ten percent (10%) of its admitted assets, subject, however, to the limitations of subsection (b);   Real property that has been mortgaged to it in good faith by way of security for loans previously contracted or for moneys due;   Real property that has been conveyed to it in satisfaction of debts previously contracted in the course of its dealings;   Real property that has been purchased at sales on judgments, decrees, or mortgages obtained or made for those debts;   Real property that has been acquired for investment purposes; provided, that:  No real property may be acquired or held under the authority of this subdivision (a)(5) unless at the time of acquisition it is already improved and income producing or unless it is improved with due diligence after acquisition so as to produce an income;   No company shall at any one (1) time have more than two percent (2%) of its admitted assets invested in a single piece or adjoining pieces of real property acquired or held under the authority of this subdivision (a)(5); and   No investments under the authority of this subdivision (a)(5) shall be made in hotels, club houses, garages, schools, factories erected and designed for special purposes or agricultural properties, without specific approval in advance by the commissioner.       In no event shall the aggregate of all of a company's holdings and investments, under the authority of subdivisions (a)(1)-(5), exceed ten percent (10%) of the company's admitted assets; provided, that nothing in this subsection (b) shall prevent the acquisition by the company of any property under subdivisions (a)(2)-(4), but properties so acquired shall be held under  56-3-306.   
 Real property specified in  56-3-305(a)(2)-(4), which is not necessary for its accommodation in the convenient transaction of its business, shall be sold and disposed of within five (5) years after the company has acquired title to the property, or within five (5) years after the property has ceased to be necessary for the accommodation of its business, and it shall not hold the property for a longer period unless it complies with either of the following:   It shall procure a certificate from the commissioner authorizing an extension of time for the sale of the property, which certificate the commissioner is authorized to issue if, in the commissioner's judgment, it appears that the interest of the company will suffer materially by a forced sale of the property; or   It shall elect to hold the real property as an investment for income purposes under  56-3-305(a)(5), in which event thereafter the real property shall be considered to have been acquired at a cost equal to its book value at the time of the election and to be held under, and subject to,  56-3-305(a)(5) and (b). The election in this subdivision (2) may be made only if at the time of election the real property would otherwise qualify as a permissible investment under  56-3-305(a)(5).   
 No domestic life insurance company shall invest or loan its funds in any manner except as provided in  56-3-301  56-3-306, except that investments of domestic life insurance companies may include electronic computer or data processing machines or systems heretofore or hereafter purchased for use in connection with the business of the insurer; provided, that the machine or system shall have an original cost of at least fifty thousand dollars ($50,000), and that the amortized value of the machine or system at the end of any calendar year shall not be greater than the original purchase price less ten percent (10%) for each completed year after purchase.  
 As used in this part, unless the context otherwise requires:   Domestic insurance company means an insurance company, other than life and fraternal insurance companies, nonprofit hospital and medical service corporations, nonprofit dental service corporations, nonprofit vision service corporations and title insurance companies, incorporated under the laws of this state;   Fixed charges includes interest on all bonds and other evidence of indebtedness, and amortization of debt discount and expenses;   Institution includes a corporation, a joint-stock association and a business trust;   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 institution. In applying the test of net earnings available for fixed charges to an issuing, assuming or guaranteeing institution 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 institution by purchase, merger, consolidation or otherwise substantially as an entirety, net earnings available for fixed charges of the predecessor or constituent institution for such portion of the test period as preceded acquisition may be included in the net earnings of the issuing, assuming or guaranteeing institution or the lessee, in accordance with consolidated earnings statement covering the period. The requirements imposed by  56-3-402(2) and (13) upon the issuing, assuming or guaranteeing institution or the lessee are deemed to have been met if at the time the investment is made an institution 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 the terms of the indebtedness; 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 institution applicable to the test period in question;   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;   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; and   State includes the several states, the District of Columbia, the Commonwealth of Puerto Rico and the possessions of the United States.   
 Domestic insurance companies may invest their assets only as follows:   In bonds or other evidences of indebtedness, not in default as to principal or interest, that are valid and legally authorized obligations issued, assumed or guaranteed by the United States or by any state of the United States, by any county, city, town, village, municipality or district in the state, or by any political subdivision of the state, by any civil division or public instrumentality of one (1) or more of the governmental units, if, by statutory or other legal requirements applicable to the entity, the obligations are payable, as to both principal and interest, from taxes levied, or by the law required to be levied, upon all taxable property or all taxable income within the jurisdiction of the governmental unit or from adequate special revenues pledged or otherwise appropriated or by the law required to be provided for the purpose of the payment, but not including any obligations payable solely out of special assessments on properties benefited by local improvements;   In interest-bearing bonds, debentures, notes or other evidences of indebtedness, or in commercial paper or bankers' acceptances, or similar evidences of indebtedness customarily issued at a discount from principal value, issued, assumed, or guaranteed by any solvent institution created or existing under the laws of the United States or any state of the United States, that are not in default as to principal or interest; provided, that either:  The net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period, if during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; or   The issuing, assuming or guaranteeing institution's or institutions' long-term obligations are included in the four (4) highest grades by any of the recognized rating agencies;      In preferred stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that:   If the stock or shares are cumulative, dividends on the stock or shares are not in arrears, or, if noncumulative, full dividends have been paid in each of the three (3) fiscal years next preceding the date of acquisition by the insurance company;   The aggregate net earnings of the issuing institution available for its fixed charges and dividends for a period of three (3) fiscal years next preceding the date of acquisition is at least equal to one and one fourth (1.25) times the sum of its aggregate fixed charges, full contingent interest and preferred dividend requirements for the same period; and   The investments made under the authority of this subdivision (3) shall not at any time cause the insurance company's holdings:        Of the preferred stock or shares of any one (1) institution to exceed three percent (3%) of the admitted assets of the insurance company; or   Of the preferred stock or shares of all institutions to exceed twenty-five percent (25%) of the admitted assets of the insurance company;    For purposes of determining the holdings of the preferred stock or shares pursuant to subdivision (3)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value of that date, whichever is lower;   (A)  In common stock or shares of any solvent institution created or existing under the laws of the United States or of any state of the United States; provided, that:   The institution has earned, during the period of five (5) fiscal years next preceding the date of acquisition by the insurance company, an aggregate sum available for dividends upon its common stock or shares equal at least to an aggregate sum that would have been sufficient to pay dividends of six percent (6%) per annum upon the par or stated value of all its common stock or shares outstanding during the period;   If the stock or shares are in a real estate company,  56-3-405 and 56-3-406 shall apply with respect to the stock or shares and to the real property owned by the real estate company, and the amount invested in the stock or shares of the real estate company shall be included with the aggregate of all of the insurance company's holdings and investments for the purposes of  56-3-405(6);   Investments made under the authority of this subdivision (4) shall not at any time cause the insurance company's holdings:   Of common stock or shares of any one (1) institution to exceed five percent (5%) of the admitted assets of the insurance company; or   Of common stock of all institutions to exceed either the larger of thirty percent (30%) of the assets of the insurance company or one hundred percent (100%) of the amount by which the capital and surplus of the insurance company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state;   For purposes of determining the holdings of the common stock or shares pursuant to subdivision (4)(A), the value of the stock or shares shall be computed at cost or at market on the December 31 preceding, whichever is lower, and, if there is no market on that date, then at cost or book value on that date, whichever is lower;   Upon security of promissory notes amply secured by pledge of any bonds or other securities in which the companies are authorized to invest their funds;   Upon security of promissory notes amply secured by pledge of unearned premiums of their own policies;   In the obligations, and/or stock where stated, of the following agencies of the government of the United States, whether or not the obligations are guaranteed by the United States government:   Commodity credit corporation;   Federal intermediate credit banks;   Federal land banks;   Banks for cooperatives;   Federal home loan banks, and stock of such banks;   The Federal National Mortgage Association, and stock of the Federal National Mortgage Association when acquired in connection with sale of mortgage loans to the association; and   Any other similar agency of the government of the United States and of similar financial quality;   In lawfully authorized bonds or other evidences of indebtedness issued or guaranteed by the International Bank for Reconstruction and Development, or the Inter-American Development Bank, the African Development Bank, or the Asian Development Bank;   In shares in federally insured building and loan and savings and loan institutions;   In other good and solvent securities, in addition to those authorized by this section or other sections of the code, subject to the approval of the commissioner;   In loans secured by mortgages upon improved, unencumbered real property, or upon leasehold estates in improved real property in the United States, not exceeding, however, seventy-five percent (75%) of the value of the property or leasehold estate, repayable in not more than thirty (30) years. All loans secured by leasehold estates must provide for amortization of principal at least once in each year in amounts sufficient to completely amortize the loan at least twenty-one (21) years prior to expiration of the lease term, inclusive of the term or terms that may be provided by an enforceable option or options of renewal. Real property and leasehold estates shall not be deemed to be encumbered within the meaning of this section by reason of the existence of unpaid assessments and taxes not delinquent, mineral, oil or timber rights, easements or rights-of-way for public highways, private roads, railroads, telegraph, telephone, electric light and power lines, drains, sewers or other similar easements or rights-of-way, liens for service and maintenance of water rights when not delinquent, party wall agreements, building restrictions, or other restrictive covenants or conditions, or leases under which rents or profits are reserved to the owner, if in any event the security for the loan is a first lien upon the real property or leasehold estate and if there is no condition or right of re-entry or forfeiture under which, in the case of real property other than leaseholds, the lien can be cut off, subordinated or otherwise disturbed, or under which, in the case of leaseholds, the insurance company is unable to continue the lease in force for the duration of the loan. A loan guaranteed or insured in full by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944 (38 U.S.C.  3701-3725), may be subject to a prior encumbrance insured by the federal housing administrator or commissioner, and the foregoing limitations in respect to value and repayment shall not apply to a loan that is:   Insured by, or for which a commitment to insure has been made by, the federal housing administrator or commissioner pursuant to the National Housing Act (12 U.S.C.  371 et seq.);   Guaranteed by the administrator of veterans' affairs pursuant to the Servicemen's Readjustment Act of 1944 (38 U.S.C.  3701-3725), except that, if only a portion of a loan is so guaranteed, the limitation of value shall apply to the portion not so guaranteed; or   Insured by the administrator pursuant to the Servicemen's Readjustment Act of 1944 (38 U.S.C.  3701-3725);   In purchase money mortgages or like securities received by the insurance company upon the sale or exchange of real property acquired pursuant to  56-3-405;   In bonds, debentures, notes or other evidences of indebtedness of persons or corporations organized under the laws of the United States, or any state of the United States, secured by assignment of lease or leases, or the rentals payable under the leases, of real or personal property or both to the United States, or any state of the United States, or any county, city, town, village, municipality or district in the state or any political subdivision of the county, city, town, village, municipality or district or any civil division or public instrumentality of one (1) or more of the governmental units, or one (1) or more institutions created or existing under the laws of the United States, or of any state; provided, that:   The fixed rentals assigned shall be sufficient to repay the indebtedness within the unexpired term of the lease, exclusive of the term that may be provided by an enforceable option of renewal;   The lessee has not defaulted in payment of principal of and interest on any of its bonds, notes, debentures, or other evidences of indebtedness during the five (5) fiscal years immediately preceding the date of the investment;   The net earnings of each lessee under this subdivision (13) available for its fixed charges for a period of five (5) fiscal years next preceding the date of acquisition by the insurance company has averaged per year not less than one and one half (1.5) times its average annual fixed charges applicable to the period and during either of the last two (2) years of the period the net earnings have been not less than one and one half (1.5) times its fixed charges for the year; and   A first lien on the interest of the lessor in the unencumbered property so leased shall be obtained as additional security for the indebtedness;   In the purchase and ownership of vessels, vehicles, or rolling stock used or useful for the transportation of persons, goods, products or commodities, or of machinery or equipment used by manufacturing, processing or financial establishments, or of communications equipment used by radio or television stations, or of store fixtures used by retail establishments, which transportation equipment, or machinery or equipment or communications equipment or store fixtures are or will become subject to contracts for the sale or use thereof under which contractual payments are to be made which may reasonably be expected to return the principal of, and provide earnings on, the investment within the anticipated useful life of the property, the anticipated useful life to not be less than five (5) years;   In loans or investments in addition to those permitted in other subdivisions of this section or under other sections of the code, notwithstanding any limitations or prohibitions contained in  56-3-405(a)(5) that might otherwise be applicable; provided, that for the purposes of subdivision (11) and this subdivision (15), the portion of a loan secured by a mortgage upon real property that does not exceed seventy-five percent (75%) of the value of the property shall be deemed to be a permitted investment under subdivision (11) and the remainder of the loan may be deemed to be made under this subdivision (15); and provided, further, for the purposes of  56-3-405, that the portion of an investment in a single piece or adjoining pieces of real property acquired or held under the authority of  56-3-405(5) that does not exceed two percent (2%) of the insurance company's admitted assets shall be deemed to be a permitted investment under  56-3-404, and the remainder of the investment shall be deemed to be made under this subdivision (15). Any loan or investment originally made under this subdivision (15) that would subsequently, if it were then being made, qualify as a permitted investment under another subdivision of this section or under another section of the code shall thenceforth be deemed to be a permitted investment under the other subdivision or section. The aggregate of the insurance company's loans and investments under this subdivision (15) shall not exceed five percent (5%) of the company's admitted assets; and   In electronic computer or data processing machines or systems purchased for use in connection with the business of the insurer; provided, that the machine or system shall have an original cost of at least fifty thousand dollars ($50,000), and that the amortized value of the machine or system at the end of any calendar year shall not be greater than the original purchase price less ten percent (10%) for each completed year after purchase.  
  Domestic insurance companies may invest in, or otherwise acquire or loan upon, securities and investments in Canada that are substantially of the same kinds, classes and investment grades as those eligible for investment under  56-3-402; but the aggregate amount of the investments that are held at any time by the company shall not exceed ten percent (10%) of its admitted assets, except where a greater amount is permitted pursuant to subsection (b), in which case this subsection (a) shall not be applicable.   Any domestic insurance company that is authorized to do business in a foreign country or that has outstanding insurance, or reinsurance contracts or risks, resident or located in a foreign country may invest in, or otherwise acquire or loan upon, securities and investments in the foreign country that are substantially of the same kinds, classes and investment grades as those eligible for investment under  56-3-402; but the aggregate amount of the investments in a foreign country and of cash in the currency of the country that is at any time held by the company shall not, except as provided in  56-3-404(a)(1), exceed one and one half (1.5) times the amount of its reserves and other obligations under the contracts or the amount that the company is required by law to invest in the country, whichever is greater.   In addition to the foreign investments permitted under  56-3-404(a)(1) and (2), any domestic insurance company may invest in, or otherwise acquire or loan upon, securities and investments in foreign countries that are substantially of the same kinds, classes and investment grades as those eligible for investment under  56-3-402; but the aggregate amount of the investments made pursuant to this subsection (c) shall not exceed one percent (1%) of its admitted assets.   
  Notwithstanding any of the provisions or limitations of this section or of any other section of this code, a domestic insurance company may, at the time of original issue or at any other time, with the approval of the commissioner, acquire and hold:  More than fifty percent (50%) of the shares of outstanding voting stock of any other solvent insurance company, domestic or foreign;   More than fifty percent (50%) of the shares of outstanding voting stock of any domestic or foreign business corporation other than an insurance company, which corporation was formed or acquired for, and necessary and incidental to, the convenient operation of its insurance business, the administration of any of its lawful investments or the lawful business of any affiliated company; provided, that the stock or shares in any real estate company and the real property owned by the company shall be subject to  56-3-405 and 56-3-406, and the amount invested in the stock or shares shall be included with the aggregate of all the insurance company's holdings and investments for the purposes of  56-3-405(6); or   Stock of an insurance company formed under the laws of a foreign country, but the aggregate amount of the holdings shall not exceed five percent (5%) of the admitted assets of the insurance company.     The total holdings of a domestic insurance company of shares of voting stock authorized to be acquired and held under this section, together with the investments made under the authority of  56-3-402(3) and (4), shall not at any time exceed the amount by which the capital and surplus of the company exceed the minimum capital and surplus required for the kind of insurance it is authorized to transact in this state; provided, that for purposes of determining the holdings of the stock pursuant to this section, the value of the stock shall be computed at cost or at market value on the December 31 preceding, whichever is lower and that, if there is no market on that date, then at cost or book value on that date, whichever is lower.   
 Domestic insurance companies may acquire, hold and convey real property only for the following purposes and in the following manner:   The land and the building on the land in which it has its principal office and  other real property that is requisite for its convenient accommodations in the transaction of its insurance business, the amount not to exceed ten percent (10%) of its admitted assets, subject, however, to the limitations of  56-3-406;   Real property that has been mortgaged to it in good faith by way of security for loans previously contracted or for moneys due;   Real property that has been conveyed to it in satisfaction of debts previously contracted in the course of its dealings;   Real property that has been purchased at sales on judgments, decrees, or mortgages obtained or made for those debts;   Real property that has been acquired for investment purposes; provided, that:  No real property may be acquired or held under the authority of this section unless at the time of acquisition it is already improved and income-producing or unless it is improved with due diligence after acquisition so as to produce an income;   The company shall not at any one (1) time have more than two percent (2%) of its admitted assets invested in a single piece or adjoining pieces of real property acquired or held under the authority of this section; and   No investments under the authority of this section shall be made in hotels, club houses, garages, schools, factories erected and designed for special purposes or agricultural properties, without specific approval in advance by the commissioner; and     In no event shall the aggregate of all of a company's holdings and investments, under the authority of  56-3-401  56-3-404, this section and  56-3-406 and 56-3-407, exceed ten percent (10%) of the company's admitted assets; provided, that nothing in this section shall prevent the acquisition by the company of any property under subdivisions (2)-(4), but properties so acquired shall be held under  56-3-406, and the company shall list the book value of the properties as assets not admitted, to the extent the aggregate of the book value of real estate exceeds ten percent (10%) of the company's admitted assets.   
 All property specified in  56-3-405(2)-(4), which is not necessary for its accommodation in the convenient transaction of its business, shall be sold and disposed of within two (2) years after the company has acquired title to the property, or within two (2) years after the property has ceased to be necessary for the accommodation of its business; and it shall not hold the property for a longer period unless it procures a certificate from the commissioner authorizing an extension of time for the sale of the property. The commissioner is authorized to issue such a certificate extending the time for the sale of such property if in the commissioner's judgment it appears that the interest of the company will suffer materially by a forced sale of the property.  
 No domestic insurance company shall invest or loan its funds in any manner except as provided in  56-3-401  56-3-406.  
  No domestic insurance company, whether incorporated by special act or under a general law of this state, shall underwrite or participate in the underwriting of an offering of securities or property by any other person; nor shall the company enter into any agreement to withhold from sale any of its property, but the disposition of its property shall be at all times within the control of its board of directors.    No investment or loan, except premium finance loans, shall be made by any such insurance company, unless the investment or loan has first been authorized by the board of directors or by a committee appointed by the board and charged with the duty of supervising the investment or loan.   Membership on the board of directors shall not be a requirement for eligibility to membership on the committee.     
 Any particular investment that the insurance company held on September 1, 1979, or was obligated to accept by a legally enforceable commitment effectuated prior to September 1, 1979, and that the insurance company was legally entitled to hold immediately prior to September 1, 1979, shall be deemed to be an eligible investment.  
   Any domestic life insurance company may, subject to the approval of the commissioner, establish one (1) or more separate accounts and may allocate to the separate account or accounts any amounts paid to the company, including, but not limited to, proceeds applied under optional modes of settlement or under dividend options, which are to be applied to the terms of an individual or group contract issued in connection therewith to fund pension or profit-sharing plans or to provide life insurance or annuity benefits, and benefits incidental to the life insurance or annuities, payable in fixed or in variable amounts, or in both.   If and to the extent so provided under the applicable contracts, the assets of the separate account shall not be chargeable with liabilities arising out of any other business the company may conduct.     The company may provide for the owners of the contracts voting rights with respect to management of the separate accounts and investment of the assets of the accounts, and shall have the power to do all things necessary under any applicable state or federal law in order that the contracts may be lawfully sold or offered for sale.   This section shall not in any way affect existing laws pertaining to the voting rights of the company's policyholders.   
 The amounts allocated to each account and accumulations on the account may be invested and reinvested in any class of investments which may be authorized in the agreement without regard to any requirements or limitations prescribed by the laws of this state governing the investments of life insurance companies; provided, that to the extent that the company's reserve liability with regard to benefits guaranteed as to amount and duration and funds guaranteed as to principal amount or stated rate of interest is maintained in any separate account, a portion of the assets of the separate account at least equal to the reserve liability shall be invested in accordance with the laws of this state governing the investments of life insurance companies. The investments in the separate account or accounts shall not be taken into account in applying the investment limitations applicable to other investments of the company.  
 The income, if any, and gains and losses, realized or unrealized, on each account shall be credited to or charged against the amounts allocated to the account in accordance with the agreement, without regard to other income, gains or losses of the company.  
 Assets allocated to a separate account shall be valued at their market value on the date of valuation, or if there is no readily available market, then in accordance with the terms of the agreement; provided, that the portion of the assets of the separate account at least equal to the company's reserve liability with regard to the guaranteed benefits and funds referred to in  56-3-502, if any, shall be valued in accordance with the rules otherwise applicable to the company's assets.  
 Amounts allocated to a separate account in the exercise of the power granted by this part shall be owned by the company.  
 If the agreement provides for payment of benefits in variable amounts, it shall contain a statement of the essential features of the procedure to be followed by the company in determining the dollar amount of the variable benefits. The agreement, and any certificate in evidence of variable benefits issued under the agreement, shall state that the dollar amount may decrease or increase and shall contain on its first page a statement that the benefits under the agreement are on a variable basis.  
 No domestic life insurance company, and no other life insurance company admitted to transact business in this state, shall be authorized to deliver within this state any agreement providing benefits in variable amounts until the company has satisfied the commissioner that its condition or methods of operation in connection with the issuance of the agreements will not render its operation hazardous to the public or its policyholders in this state. In determining the qualification of a company requesting authority to deliver the agreements within this state, the commissioner shall consider, among other things:   The history and financial condition of the company;   The character, responsibility and general fitness of the officers and directors of the company; and   In the case of a company other than a domestic company, whether the statutes and regulations of the jurisdiction of its incorporation provide a degree of protection to policyholders and the public that is substantially equal to that provided by this part and the rules and regulations issued under this part.   
 The commissioner has the sole authority to regulate the issuance and sale of such agreements and to issue reasonable rules and regulations necessary to carry out the purposes and provisions of this part, including licensing the qualifications of the agents or salespersons.  
 Except for  56-7-401, 56-7-2307(2), (7), (10) and (12), and 56-7-2309, and except as otherwise provided in this part, all pertinent provisions of the insurance laws of this state apply to separate accounts and agreements issued in connection with the accounts. Any individual variable life insurance agreement delivered or issued for delivery in this state shall contain grace, reinstatement and nonforfeiture provisions appropriate to the agreement. The reserve liability for variable benefits shall be established in accordance with actuarial procedures that recognize the variable nature of the benefits provided and any mortality guarantees.  
 As used in this part, equity security means any stock or similar security, or any security convertible, with or without consideration, into a stock or similar security, or carrying a warrant or right to subscribe or to purchase a stock or similar security; or a warrant or right; or any other security that the commissioner deems to be of similar nature and considers necessary or appropriate, by rules and regulations the commissioner prescribes in the public interest or for the protection of investors, to treat as an equity security.  
 Every person who is directly or indirectly the beneficial owner of more than ten percent (10%) of any class of any equity security of a domestic stock insurance company, or who is a director or an officer of the company, shall file in the office of the commissioner within ten (10) days after the person becomes the beneficial owner, director, or officer, a statement, in the form the commissioner prescribes, of the amount of all equity securities of the company of which the person is the beneficial owner, and within ten (10) days after the close of each calendar month thereafter, if there has been a change in ownership during that month, shall file in the office of the commissioner a statement, in the form the commissioner prescribes, indicating the ownership at the close of the calendar month and the changes in ownership that have occurred during that calendar month.  
  For the purpose of preventing the unfair use of information that may have been obtained by the beneficial owner, director, or officer by reason of the relationship to the company, any profit realized by the person from any purchase and sale, or any sale and purchase, of any equity security of the company within any period of less than six (6) months, unless the security was acquired in good faith in connection with a debt previously contracted, shall inure to and be recoverable by the company, irrespective of any intention on the part of the beneficial owner, director, or officer in entering into the transaction of holding the security purchased or of not repurchasing the security sold for a period exceeding six (6) months.   Suit to recover the profit may be instituted at law or in equity in any court of competent jurisdiction by the company or by the owner of any security of the company in the name and in behalf of the company, if the company fails or refuses to bring suit within sixty (60) days after request or fails diligently to prosecute it thereafter; but no suit shall be brought more than two (2) years after the date the profit was realized.   This section shall not be construed to cover any transaction where the beneficial owner was not the beneficial owner both at the time of the purchase and sale, or the sale and purchase, of the security involved, or any transaction or transactions that the commissioner by rules and regulations exempts as not comprehended within the purpose of this section.   
 It is unlawful for the beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company, if the person selling the security or the person's principal:   Does not own the security sold; or   If owning the security, does not deliver it against the sale within twenty (20) days thereafter, or does not within five (5) days after the sale deposit it in the mails or other usual channels of transportation; but no person shall be deemed to have violated this section if the person proves that, notwithstanding the exercise of good faith, the person was unable to make the delivery or deposit within that time, or that to do so would cause undue inconvenience or expense.   
  Section 56-3-703 does not apply to any purchase and sale, or sale and purchase, and  56-3-704 does not apply to any sale of an equity security of a domestic stock insurance company not then or theretofore held by the dealer in an investment account, by a dealer in the ordinary course of business and incident to the establishment or maintenance by the dealer of a primary or secondary market, otherwise than on an exchange as defined in the Securities Exchange Act of 1934 (15 U.S.C.  78a et seq.), for the security.   The commissioner may, by rules and regulations the commissioner deems necessary or appropriate in the public interest, define and prescribe terms and conditions with respect to securities held in an investment account and transactions made in the ordinary course of business and incident to the establishment or maintenance of a primary or secondary market.   
 Sections 56-3-702  56-3-704 do not apply to foreign or domestic arbitrage transactions unless made in contravention of the rules and regulations the commissioner adopts in order to carry out the purposes of this part.  
 Sections 56-3-702  56-3-704 do not apply to equity securities of a domestic stock insurance company if:   The securities are registered, or are required to be registered, pursuant to section 12 of the Securities Exchange Act of 1934 (15 U.S.C.  78l ); or   The domestic stock insurance company does not have any class of its equity securities held of record by one hundred (100) or more persons on the last business day of the year next preceding the year in which equity securities of the company would be subject to  56-3-702  56-3-704, except for this subdivision (2).   
  The commissioner, with the approval of the attorney general and reporter and in conformity with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, has the power to make rules and regulations necessary for the execution of the functions vested in the commissioner by  56-3-701  56-3-707, and may for that purpose classify domestic stock insurance companies, securities, and other persons or matters within the commissioner's jurisdiction.   Nothing in  56-3-702  56-3-704 imposing any liability applies to any act done or omitted in good faith in conformity with any rule or regulation of the commissioner, notwithstanding that the rule or regulation may, after the act or omission, be amended or rescinded or determined by judicial or other authority to be invalid for any reason.   The commissioner, with the approval of the attorney general and reporter and in conformity with the Uniform Administrative Procedures also has the power to make rules and regulations necessary to regulate the solicitation of proxies, consents or authorizations in respect to those equity securities subject to  56-3-701  56-3-707 issued by domestic stock insurance companies.   
 Any insurance company may deposit and maintain on deposit with the state treasurer, securities as defined in  56-3-303(a)(1)-(4), (7) and (8), to be held for the exclusive protection of its policyholders and creditors in this state; provided, that the deposit shall not exceed one hundred percent (100%) of that portion of the insurance company's reserves as is fairly allocable to insurance on risks located in this state.  
 The commissioner is authorized to accept the deposits, and the state treasurer shall hold the deposits in the same manner as other deposits are held under  56-2-104, 56-2-112 and other applicable sections of this title.  
 Upon a showing that the interest of Tennessee policyholders will in no way be impaired, an insurance company may demand, and, upon receipt of the demand, the commissioner may deliver over to the insurance company all or any portion of the securities deposited by the insurance company.  
 Consistent with this title, the commissioner may adopt reasonable rules and regulations for the purpose of implementing this part.  
 The purpose of this part is to authorize insurance companies to utilize modern systems for holding and transferring securities without physical delivery of securities certificates, subject to rules and regulations promulgated by the commissioner pursuant to this part.  
 As used in this part:    Clearing corporation means:   A corporation as defined in  8-102(a) of the Uniform Commercial Code, codified in  47-8-102(a), as adopted by the National Conference of Commissioners on Uniform State Laws and the American Law Institute, as amended from time to time; and   Treasury/reserve automated debt entry securities system and treasury direct book-entry securities systems established pursuant to 5 U.S.C. Part 301, 12 U.S.C. Part 391 and 31 U.S.C.  3100 et seq.;     With respect to securities issued by institutions organized or existing under the laws of any foreign country or securities used to meet the deposit requirements pursuant to the laws of a foreign country as a condition of doing business therein, clearing corporation also means a corporation which is organized or existing under the laws of any foreign country and is legally qualified under such laws to effect transactions in securities by computerized book-entry;     Commissioner means the commissioner of commerce and insurance;   Custodian means a national bank, state bank, federal home loan bank, trust company or broker/dealer that participates in a clearing corporation; and   Securities means instruments as defined in  8-102(a) of the Uniform Commercial Code, codified in  47-8-102(a), as adopted by the National Conference of Commissioners on Uniform State Laws and the American Law Institute, as amended from time to time.   
   A domestic insurance company may deposit, or arrange for the deposit of, securities held in or purchased for its general account and its separate accounts in a clearing corporation.   When securities are deposited with a clearing corporation:  Certificates representing securities of the same class of the same issuer may be merged and held in bulk in the name of the nominee of such clearing corporation with any other securities deposited with such clearing corporation by any person, regardless of the ownership of such securities; and   Certificates representing securities of small denominations may be merged into one (1) or more certificates of larger denominations.     The records of any custodian through which an insurance company holds securities in a clearing corporation shall at all times show that such securities are held for such insurance company and for which accounts.   Ownership of, and other interest in, such securities may be transferred by bookkeeping entry on the books of such clearing corporation without physical delivery of certificates representing such securities.     The commissioner is authorized to promulgate rules and regulations governing the deposit by insurance companies of securities with clearing corporations, including establishing standards for national banks, state banks, federal home loan banks, trust companies and broker/dealers to qualify as custodians for insurance company securities.   
   Securities qualified for deposit under  56-2-104 may be deposited with a clearing corporation.   Securities deposited with a clearing corporation and used to meet the deposit requirements set forth in  56-2-104 shall be under the control of the commissioner and shall not be withdrawn by the insurance company without the approval of the commissioner.     Any insurance company holding securities as provided in subsection (a) shall provide to the commissioner evidence issued by its custodian through which the insurance company has deposited securities in a clearing corporation, in order to establish that:  The securities are actually recorded in an account in the name of the custodian; and   The records of the custodian reflect that such securities are held subject to the order of the commissioner.     
   Securities eligible for deposit under the insurance laws of this state relating to deposit of securities by an insurance company as a condition of commencing or continuing to do any insurance business in this state may be deposited with a clearing corporation.   Securities deposited with a clearing corporation and used to meet the deposit requirements under the insurance laws of this state shall be under the control of the commissioner and shall not be withdrawn by the insurance company without the approval of the commissioner.     Any insurance company holding such securities as provided in subsection (a), shall provide to the commissioner evidence issued by its custodian in order to establish that:  The securities are actually recorded in an account in the name of the custodian; and   The records of the custodian reflect that such securities are subject to the order of the commissioner.     
 This chapter shall be known and may be cited as the Dental Service Plan Law, 1961.  
 As used in this chapter, unless the context otherwise requires:   Beneficiary means a person designated in the subscription certificate referred to in subdivision (10), as entitled to the dental services referred to in subdivision (10);   Commissioner means the commissioner of commerce and insurance;   Covered dependent is the spouse, an adult dependent or child of a subscriber who is named in the subscription certificate issued to the subscriber, and with respect to whom appropriate premium is specified in the certificate;   Dental service means professional services rendered by persons duly licensed under the laws of this state to practice dentistry and all services defined as constituting the practice of dentistry as set out in title 63, chapter 5;   Nonprofit dental service corporation means any corporation organized pursuant to this chapter for the purpose of establishing, maintaining and operating a nonprofit dental service plan, and that employs the service benefit concept in the majority of the programs it administers;   Nonprofit dental service plan means a plan whereby specified dental service is provided by a nonprofit dental service corporation to subscribers to the plan;   Participating dentist means a dentist licensed to practice dentistry in this state under title 63, chapter 5, who contracts in writing with a dental service plan corporation to perform the dental services specified in the subscription certificates issued by the corporation, and at the rates of compensation determined by the board of directors of the corporation, and who agrees to abide by the bylaws, rules and regulations of the corporation applicable to participating dentists;   Person includes a natural person, a corporation, an association, a common law trust or corporation;   Service benefit concept means a type of dental benefit contract between a beneficiary and a third party payer, whereby the beneficiary is guaranteed no out-of-pocket expenses for covered services beyond any agreed on cost sharing stipulated in the contract; and   Subscriber means a person to whom a subscription certificate is issued by a dental care service plan corporation that sets forth the beneficiaries and the kind and extent of dental service for which the corporation is liable to make payment.   
 Five (5) or more dentists duly licensed to practice under the laws of this state, who give advance written notice by registered or certified mail to the Tennessee Dental Association of their intent to organize a nonprofit dental service corporation, may associate themselves by written articles of association for the incorporation of a nonprofit dental service corporation. The board of each nonprofit dental service corporation must at all times include dentists who maintain an active license to practice under the laws of this state. The laws of this state relative to insurance companies or to the business of insurance, and acts in amendment of the laws or in addition to the laws, do not apply to any nonprofit dental service corporation unless expressly so provided in the laws or acts.  
 The articles of incorporation of the nonprofit dental service corporation or amendments to the articles shall be submitted to the commissioner, and shall be subject to the commissioner's approval, which shall be endorsed on the articles or amendments before they are filed with the secretary of state.  
 A dental service plan corporation shall consist of a board of directors of such number, grouped in reasonable classes, as the bylaws of the corporation, as approved by the commissioner, shall provide.  
  Each nonprofit dental service corporation may contract with its subscribers for dental services as may be from time to time provided under any nonprofit dental service plan adopted by the corporation.   The rates charged by the nonprofit dental service corporation to its subscribers shall be consistent with the proper conduct of its business and the interest of the public and shall at all times be subject to the approval of the commissioner.   Nothing contained in this chapter or in any nonprofit dental service plan shall affect the ordinary professional relationship between the person rendering dental services under the plan and the subscriber to whom the services are rendered; and no action based upon or arising out of the relationship or relating to dental services rendered pursuant to a nonprofit dental service plan shall be maintained against the nonprofit dental service corporation operating the plan.   
 It is unlawful for any person except a dental service plan corporation, incorporated in accordance with this chapter, and operating in accordance with authority from the commissioner, or a nonprofit corporation organized under chapter 27, 28 or 29 of this title, or an insurance company properly qualified in this state to write accident, health or disability insurance, to establish, maintain, or operate a dental service plan, or to solicit subscribers to or enter into contracts with respect to a dental service plan. This prohibition, however, shall not be construed as preventing a person from furnishing dental services for the prevention of diseases among the person's employees or from furnishing dental services required under the Workers' Compensation Law, compiled in title 50, chapter 6, and related legislation when the employee is not charged for the services. The prohibition in this section shall not apply to persons engaging in transactions in this state involving a master group subscription contract lawfully issued and delivered in another state, and the persons shall not be subject to this chapter or otherwise regulated by or prohibited from engaging in the transactions solely as a result of the transactions.  
  Every dentist licensed to practice in this state under title 63, chapter 5, has the right to become a participating dentist in the dental service plan corporation operating in the county in which the dentist resides or practices. A dental service plan corporation shall impose no restrictions on the dentists who treat its subscribers as to methods of diagnosis or treatment. The private dentist-patient relationship shall be maintained, and a subscriber shall at all times have free choice of any dentist who is a participating dentist in the corporation and who agrees to accept a particular beneficiary as a patient.   Notwithstanding subsection (a), a dental service plan corporation may limit participation in a plan that is providing or managing dental benefits for the impoverished uninsured on behalf of, or as required by, any governmental entity.   
 A dental service plan corporation may enter into agreements with dentists qualified as set out in this chapter, under the terms of which the dentists may become participating dentists in a plan operated by the corporation, and may make payments to the dentists as shall have accrued to them by reason of services performed by them under the plan on behalf of the corporation.  
 No corporation subject to this chapter may issue contracts until the commissioner has formally authorized the contracts to be issued.  
 Applications for the licenses shall be made on forms approved by the commissioner, containing information the commissioner deems necessary. Every application for a license shall be accompanied by copies of the following documents:    A certified copy of its charter or certificate of incorporation; or   A copy of its bylaws certified by the secretary and the president of the corporation;     Proposed contract between the corporation and the participating dentists showing the terms under which dental care services are to be furnished to subscribers;   Subscription contracts to be issued to subscribers showing a table of the rates to be charged and the benefits to which they are entitled;   A statement of the county or counties in which the corporation proposes to operate dental service plans;   A statement of its financial condition and business in the form and detail the commissioner may require, including amounts of contributions paid for working capital and the name or names of each contributor, and the terms of the contributions, signed and sworn to by the president and secretary, and shall pay for filing of the statement the sum of twenty-five dollars ($25.00);   A copy of its proposed prospectus and advertising material to be used in solicitation of contracts; and   Proof satisfactory to the commissioner that, in the county or counties in which the corporation proposes to operate, at least fifty-one percent (51%) of the resident dentists in the county or counties have agreed to become participating dentists of the corporation immediately upon the issuance of a license to it by the commissioner or, in the alternative, that at least twenty-five percent (25%) of the dentists duly licensed to practice in this state under title 63, chapter 5, have agreed to become participating dentists of the corporation immediately upon the issuance of a license to it by the commissioner.   
 The commissioner shall issue a license upon compliance with this chapter, and other proper requirements of the commissioner, and upon being satisfied that:   All items required to be filed are in proper form, as required by this chapter, and meet the approval of the commissioner;   The applicant is established as a bona fide dental service plan corporation, and the service rendered by the corporation is not an unnecessary duplication of similar services in the community served, and is desirable for public necessity and convenience, and a fair opportunity has been given to all practicing dentists of standing in the area to be served to become participating dentists;   The solicitations of contracts by the corporation and its conditions or methods of operation are fair and reasonable;   The rates charged are fair, reasonable, adequate and not unfairly discriminatory, and the benefits to be provided are fair, reasonable, and not unfairly discriminatory. The rates may differ between subscribers in recognized groups and subscribers not in groups, all subject to the approval of the commissioner;   The amount of money actually available for working capital is sufficient to carry all acquisition costs and operating expenses for a period of at least six (6) months from the date of the issuance of the certificate, or two thousand five hundred dollars ($2,500), whichever amount is larger;   The amount provided as working capital shall only be provided by individuals or groups who have no financial interest in the activities of the dental service corporations, or by the participating dentists. Interest charged for the capital, if any, shall not exceed six percent (6%), and payment of interest, if any, and repayment of the working capital, shall be permitted only after adequate provisions have been made for operating expenses, payments to participating dentists and the establishment of legal reserves and other reserves as may be required by the commissioner;   The dental service corporation shall maintain at all times proper reserves, subject to the approval of the commissioner, for unearned subscription fees and unearned premiums, and for unpaid dental service bills, including provision for unreported and undischarged dental cases and other known liabilities. In addition, a contingency reserve shall be accumulated annually at the rate of not less than two and one half percent (2.5%) of net premium income. When the contingency reserves equal seventy-five thousand dollars ($75,000), or fifty-five percent (55%) of the annual premium income, whichever is higher, further accumulations may be discontinued for any length of time not required to meet the requirements of this subdivision (7);   In the county or counties or areas in which a corporation proposes to operate, fifty-one percent (51%) or more of the resident dentists have agreed to render the dental services for which the corporation agrees to pay, or that at least twenty-five percent (25%) of the dentists duly licensed to practice in this state under title 63, chapter 5, have agreed to render dental services for corporations organized or to be organized pursuant to this chapter; and   A provision has been made in the subscription contract authorizing dental service other than participating dentists, in which case money benefits shall be provided as specified in the subscription contract, and approved as fair by the commissioner. The certificate of authority issued by the commissioner to operate a dental service plan or plans will be limited by the commissioner to the contracts and practices approved by the commissioner, and may be further limited to the county or counties or areas as the commissioner deems in the public interest.   
 The funds of the dental service corporations subject to this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurance companies.  
 All acquisition and administrative expenses incurred in connection with the dental service corporation shall at all times be limited to a percentage of its total net premiums as set and approved by the commissioner.  
 A dental service plan corporation is authorized to purchase a contract of insurance protecting the corporation or any officer or employee of the corporation, or any dentist from liability for injuries resulting from negligence, misfeasance, malfeasance, nonfeasance or health care liability on the part of any officer or employee of the corporation, or on the part of any dentist in the course of rendering dental services to beneficiaries.  
 Every dental service plan corporation shall maintain adequate financial and statistical records in reasonable uniformity with accounting plans and statistical requirements of the annual statement blank required by the commissioner.  
 The dental service plan corporation shall annually, on or before March 1, file in the office of the department a statement of its operations for the calendar year, showing financial condition as of December 31 then next preceding, in such form and content as the commissioner prescribes, signed and sworn to by its president and secretary, or other proper officers, and shall pay for the filing of the statement the sum of fifty dollars ($50.00).  
 The commissioner has the same authority to examine the dental service plan corporations as is granted to the commissioner for the examination of life and accident and health insurance companies, and has the same authority for the correction, rehabilitation or liquidation of the dental service plan corporations as is now provided by law for life and health and accident companies.  
 Every dental service plan corporation or its agents, subject to this chapter, shall be subject to the fees and taxes as prescribed for life and health and accident insurance companies and agents of the companies doing business in this state. It is not the purpose of this chapter to discriminate in favor of dental service plan corporations.  
 All licenses authorizing dental service plan corporations to transact business in this state shall be renewable on April 1 of each year, subject to the approval of the commissioner. Any dental service plan corporation licensed to do business in this state under this chapter shall obtain from the commissioner a certificate of authority for every agent writing or soliciting dental service plan contracts for the corporation in this state, and the certificate shall be renewable January 1 of each year, subject to applicable sections of the insurance laws, including the revenue law of this state for life and health and accident insurance agents.  
 After the issuance of a certificate of authority, the commissioner shall be empowered to issue the orders or to publish regulations as may be necessary for the proper enforcement of this chapter as the commissioner deems to be in the public interest. The published regulations of the commissioner will have the effect of statute, and shall include, in particular, powers of regulating the form of subscription contracts and requirements of the contracts and prohibited provisions in the contracts, and all other matters requiring further definition or clarification within the requirements of this chapter. The commissioner has the authority to regulate rates as required by statutes now in force or hereinafter enacted by the general assembly.  
  The commissioner has the authority to suspend or cancel the license of any dental service plan corporation or any agent for violation of this chapter or violation of the insurance laws that may apply and are not in conflict with this chapter, after proper legal notice and a hearing, which action of the commissioner shall be subject to judicial review. The commissioner has the authority, after the issuance of a certificate of authority, to withdraw approval, previously granted, of any document required to be filed with the department under any section of this chapter. In addition, the commissioner has the authority to require a dental service plan corporation to solicit in a manner required by agents' licensing laws, and to fulfill contracts approved by the commissioner, to utilize soliciting methods provided by this chapter, or by other insurance laws, and to comply with all other orders and regulations of the commissioner.   The commissioner has the power and authority to revoke and amend, after reasonable notice and hearing, any certificate, order, authority or consent made by the commissioner to a dental service plan corporation, and may also cancel or suspend the authority of the corporation to transact business in any particular county or counties or area, if the commissioner finds that less than fifty-one percent (51%) of the eligible licensed dentists practicing in that county are participating dentists and that less than twenty-five percent (25%) of the dentists duly licensed to practice in this state under title 63, chapter 5, have agreed to render dental services for corporations organized or to be organized pursuant to this chapter.   
 A dental service plan corporation that neglects to make and file its annual statement in the form and within the time provided by  56-27-117, or neglects to reply in writing to the inquiries of the commissioner within a reasonable time as may be specified by the commissioner, or who otherwise violates this chapter, shall be subject to revocation of license after proper notice and right of hearing. Any agent or solicitor who violates this chapter or any written order or official regulation of the commissioner or any other insurance law, particularly the agents' licensing law set forth in chapter 6 of this title, shall be subject to revocation of the license after due notice and right of hearing.  
 A review of any order made by the commissioner pursuant to this chapter may be had in the circuit court of Davidson County, upon a writ of certiorari. Application for the writ shall be made within thirty (30) days after the entry of the order by the commissioner.  
 Every subscription contract made by a dental service plan corporation shall provide for the payment of dental services for a period of twelve (12) months from the date of issue of the subscription certificate. The contract may provide that it shall be subject to renewal from year to year unless there has been one (1) month's prior written notice of termination by the dental service plan corporation. A subscriber shall forfeit membership upon failure to renew the contract, or upon voluntary resignation. During the first contract year, the contract may provide that the inception coverage may be deferred for not more than two (2) months from date of issue of the contract, and may exclude treatment of dental ills existing at the inception of the contract.  
 Every contract entered into by a dental service plan corporation with a subscriber shall be in writing, and a certificate stating the terms and conditions of the contract shall be furnished the subscriber. No subscription certificate shall be issued unless it contains the following provisions, and any other applicable provisions that may be required by this chapter or other applicable laws of this state:   A statement of the amounts payable to the corporation by the subscribers and the times at which the amounts shall be paid;   A statement of the nature of the dental services to be paid for and the period during which the certificate is effective; and if there are any types of dental services to be excepted, with the approval of the commissioner, a detailed statement of the exceptions printed as specified in this section;   A statement of the terms or conditions, if any, upon which the certificate may be cancelled or otherwise terminated at the option of either party;   A statement that the subscription and certificate constitute the contract between the corporation and the subscriber, and include the endorsements thereon and attached papers, if any, and contain the entire contract;   A statement that no statement by the subscriber in the subscriber's application for a certificate shall void the contract or be used in any legal proceedings under the contract, unless the application or an exact copy of the application is included in or attached to the certificate, and that no agent or representative of the corporation, other than an officer or officers designated in the certificate, is authorized to change the contract or waive any of its provisions;   A statement that if the subscriber defaults in making any payment under the certificate, the subsequent acceptance of a payment by the corporation or by its duly authorized agent shall reinstate the certificate, but the reinstatement shall not cover the costs of dental services incurred during the period of ten (10) days, after date of the acceptance;   A statement of the period of grace that will be allowed a subscriber for making any payment due under the contract. The period shall not be less than ten (10) days during the first contract year, and thereafter shall not be less than thirty (30) days;   A statement authorizing dental service by dentists other than participating dentists in cases of emergency or when consented to by the dental service plan corporation, or when the subscriber requires dental services outside the county or counties or area served by the dental service plan corporation, in which case money benefits shall be provided as optional and as specified in the subscriber's contract and approved by the commissioner. Otherwise, a statement that indemnity in the form of cash will not be paid to any subscriber, except in reimbursements paid by the subscriber to a dentist for which the corporation was liable at the time of the payment; and   Other statements that may be required by published regulations of the commissioner.   
 In the subscription certificate referred to in this chapter:   All printed portions shall be plainly printed in type of which the face is not smaller than ten-point;   There shall be a brief description of the subscription certificate on its first page and on the back of the certificate in type not smaller than fourteen-point. The description shall not be broader than the coverage granted in the contract;   The exceptions of the contract shall appear with the same prominence in the certificate as the benefits of the contract, and reference to the exceptions shall be specifically made in the insuring clause; and   If the contract contains any provisions purporting to make any portion of the articles of incorporation or of the bylaws of the corporation a part of the contract, the portion shall be set forth in full in the subscription certificate.   
 A dental service plan corporation may, in its discretion, receive and accept from governmental or private agencies or from other persons as defined in this chapter, payments covering all or part of the costs of subscriptions to provide dental care for needy and other individuals. However, all contracts for dental care shall be between the dental service plan corporation and the person to receive the care.  
 Any dispute or controversy arising between a dental service plan corporation and any participating dentist or any dentist desiring to become a participating dentist, or any subscriber, or any other person whose subscription certificate has been cancelled, or to whom the corporation has refused to issue a certificate, may within thirty (30) days after the dispute or controversy arises be appealed to the commissioner by the person allegedly aggrieved, or a person or persons designated by the person. After proper notice and hearing, the commissioner shall make a finding, which shall be binding on any dental service plan corporation or agent of the corporation, subject to judicial review.  
 This chapter is not to be construed as prohibiting any insurance company, properly qualified in this state to write accident or health or disability insurance, from making available any plan of dental service that may be approved by the commissioner under existing statutes or within the authority granted in this chapter, in the same manner and in the same means as granted to benevolent associations.  
 Nothing in this chapter shall be construed to modify or repeal any law or parts of law now in force, relating to the practice of medicine or surgery, or to the practice of dentistry, or to the regulation of life, accident, health or casualty insurance, excepting as they are inconsistent with this chapter.  
 Notwithstanding any other law or regulation to the contrary, a dental service plan corporation may maintain some or all of its business records using commercially acceptable electronic means.  
 Notwithstanding any other law or rule to the contrary, a dental service plan that receives claims from dentists electronically may, at the option of the dental service plan, make payments for such claims electronically.  
 Notwithstanding any other law to the contrary, subject to approval by the commissioner, a nonprofit dental service corporation only providing dental plans and policies in this state has the authority to provide plans and polices for vision services in this state in the same manner as nonprofit corporations organized under chapter 27, 28, or 29 of this title, or an insurance company properly qualified in this state to write accident, health, or disability insurance. In order for a nonprofit dental service corporation to provide plans and policies for vision services in this state, the nonprofit dental service corporation must not provide vision services in any other state and must comply with  56-31-111  56-31-118, 56-31-121, and 56-31-123  56-31-129.  
 This chapter shall be known and may be cited as the Vision Service Plan Law.  
 As used in this chapter, unless the context otherwise requires:   Beneficiary means a person designated in the subscription certificate referred to in subdivision (8) as entitled to the vision services referred to in subdivision (8);   Commissioner means the commissioner of commerce and insurance;   Covered dependent means the spouse and adult dependent or child of a subscriber who is named in the subscription certificate issued to the subscriber, and with respect to whom appropriate premium is specified in the certificate;   Nonprofit vision service corporation means any corporation organized pursuant to this chapter for the purpose of establishing, maintaining and operating a nonprofit vision service plan;   Nonprofit vision service plan means a plan whereby specified vision service is provided by a nonprofit vision service corporation to subscribers to the plan;   Participating optometrist means an optometrist duly licensed to practice optometry in this state who contracts in writing with a vision service plan corporation to perform the vision services specified in the subscription certificates issued by the corporation, and at rates of compensation determined by the board of directors of the corporation, and who agrees to abide by the bylaws, rules and regulations of the corporation applicable to participating optometrists;   Person includes a natural person, a corporation, an association, a common-law trust or corporation;   Subscriber means a person to whom a subscription certificate is issued by a vision care service plan corporation, which sets forth the beneficiaries and the kind and extent of vision service for which the corporation is liable to make payment; and   Vision service means the usual and general professional services rendered by persons duly licensed under the laws of this state to practice optometry.   
  Five (5) or more optometrists duly licensed to practice under the laws of this state may associate themselves by written articles of association for the incorporation of a nonprofit vision service corporation.   A majority of the directors of each nonprofit vision service corporation must at all times be optometrists duly licensed to practice under the laws of this state.   The laws of this state relative to insurance companies or to the business of insurance, and acts in amendment of these laws or in addition to these laws shall not apply to any nonprofit vision service corporation unless expressly so provided in these laws or acts.   
 The articles of incorporation of the corporation, or amendments to the articles, shall be submitted to the commissioner and shall be subject to the commissioner's approval, which shall be endorsed on the articles, before filing with the secretary of state.  
 A vision service plan corporation shall consist of a board of directors of such number, grouped in such reasonable classes, as the bylaws of the corporation, as approved by the commissioner, provide.  
 It is unlawful for any person except a vision service plan corporation, incorporated in accordance with this chapter, and operating in accordance with authority from the commissioner, or a nonprofit corporation organized under chapter 27, 28, 29, or 30 of this title, or an insurance company properly qualified in this state to write accident, health or disability insurance, to establish, maintain or operate a vision service plan, or to solicit subscribers to or enter into contracts with respect to a vision service plan.  
 Every optometrist licensed to practice in this state under title 63, chapter 8, has the right to become a participating optometrist in the vision service plan corporation operating in the county in which the optometrist resides or practices. A vision service plan corporation shall impose no restrictions on the optometrists who treat its subscribers as to methods of diagnosis or treatment. The private optometrist-patient relationship shall be maintained, and a subscriber shall at all times have free choice of any optometrist who is a participating optometrist in the corporation and who agrees to accept a particular beneficiary as a patient.  
 A vision service plan corporation may enter into agreements with optometrists qualified as set out in this chapter, under the terms of which the optometrists may become participating optometrists in a plan operated by the corporation, and may make payments to the optometrists that have accrued to them by reason of services performed by them under the plan on behalf of the corporation.  
 No corporation subject to this chapter may issue contracts until the commissioner has, by formal license, authorized it to do so.  
 Applications for licenses shall be made on forms approved by the commissioner, containing information that the commissioner deems necessary. Every application for a license shall be accompanied by copies of the following documents:   A certified copy of its charter or certificate of incorporation;   A copy of its bylaws certified by the secretary and the president of the corporation;   The proposed contract between the corporation and the participating optometrists showing the terms under which vision care services are to be furnished to subscribers;   Subscription contracts to be issued to subscribers showing a table of the rates to be charged and the benefits to which they are entitled;   A statement of the county or counties in which the corporation proposes to operate vision service plans;   A statement of its financial condition and business in such form and detail as the commissioner requires, signed and sworn to by the president and secretary, and payment of the sum of twenty-five dollars ($25.00) for filing of the statement;   A copy of any proposed prospectus and advertising material to be used in solicitation of contracts; and   Proof satisfactory to the commissioner that in the county or counties in which the corporation proposes to operate, fifty-one percent (51%) or more of the resident optometrists of that county have agreed to render vision services for which the corporation agrees to pay, or that at least twenty-five percent (25%) of the optometrists duly licensed to practice in this state have agreed to render vision services for corporations organized or to be organized pursuant to this chapter.   
 The commissioner shall issue a license upon compliance with this chapter, and other proper requirements of the commissioner, and upon being satisfied that:   All items required to be filed are in proper form, as required by this chapter, and meet the approval of the commissioner;   The applicant is established as a bona fide vision service plan corporation, and the service rendered by the corporation is not an unnecessary duplication of similar services in the community served, and is desirable for public necessity and convenience, and a fair opportunity has been given to all duly licensed optometrists in the area to be served to become participating optometrists;   The solicitations of contracts by the corporation and its conditions or methods of operation are fair and reasonable;   The rates charged are fair, reasonable, adequate and not unfairly discriminatory, and the benefits to be provided are fair, reasonable and not unfairly discriminatory. The rates may differ between subscribers in recognized groups and subscribers not in groups, all subject to the approval of the commissioner;   The amount of money actually available for working capital is sufficient to carry all acquisition costs and operating expenses for a period of at least six (6) months from the date of the issuance of the certificate, or two thousand five hundred dollars ($2,500), whichever amount is larger. Repayment of any working capital obtained through loans, and payment of any interest thereon, shall be permitted only after adequate provisions have been made for operating expenses, payments to participating optometrists and the establishment of legal reserves and other reserves that may be required by the commissioner;   Every vision service corporation shall maintain at all times proper reserves, subject to the approval of the commissioner, for unearned subscription fees and unearned premiums, and for unpaid vision service bills. In addition, a contingency reserve shall be accumulated annually at the rate of not less than two and one half percent (2.5%) of net premium income. When the contingency reserves equal seventy-five thousand dollars ($75,000), or fifty-five percent (55%) of the annual premium income, whichever is higher, further accumulations may be discontinued for any length of time not required to meet the requirements of this subdivision (6);   In the county or counties or areas in which a corporation proposes to operate, fifty-one percent (51%) or more of the resident optometrists have agreed to render vision services for which the corporation agrees to pay, or that at least twenty-five percent (25%) of the optometrists duly licensed to practice in this state have agreed to render vision services for corporations organized or to be organized pursuant to this chapter; and   A provision has been made in the subscription contract authorizing vision services other than by participating optometrists, in which case money benefits shall be provided as specified in the subscription contract, and approved as fair by the commissioner. The certificate of authority issued by the commissioner to operate a vision service plan or plans will be limited by the commissioner to the contracts and practices approved by the commissioner, and may be further limited to the county or counties or areas that the commissioner deems in the public interest.   
 The funds of the vision service corporations subject to this chapter shall be invested only in securities permitted by the laws of this state for the investment of assets of life insurance companies.  
 All acquisition and administrative expenses incurred in connection with the vision service corporation shall at all times be limited to a percentage of its total net premiums as set and approved by the commissioner.  
 A vision service plan corporation is authorized to purchase a contract of insurance protecting the corporation or any officer or employee of the corporation or any optometrist from liability for injuries resulting from negligence, misfeasance, malfeasance, nonfeasance or health care liability on the part of any officer or employee of the corporation, or on the part of any optometrist in the course of rendering vision services to beneficiaries.  
 Every vision service plan corporation shall maintain adequate financial and statistical records in reasonable uniformity with accounting plans and statistical requirements of the annual statement blank required by the commissioner.  
 Every vision service plan corporation shall annually, on or before March 1, file in the office of the department a statement of its operations for the calendar year, showing financial conditions as of December 31, then next preceding, in such form and content as the commissioner prescribes, signed and sworn to by its president and secretary, or other proper officers, and shall pay for the filing of the statement the sum of fifteen dollars ($15.00).  
 The commissioner has the same authority to examine vision service plan corporations as is granted to the commissioner for the examination of life and accident and health insurance companies, and has the same authority for the correction, rehabilitation or liquidation of vision service plan corporations as is now provided by law for life and health and accident companies.  
 Every vision service plan corporation, or its agents, subject to this chapter, is subject to the fees and taxes as prescribed for life and health and accident insurance companies and agents of the insurance companies doing business in this state. It is not the purpose of this chapter to discriminate in favor of the vision service plan corporations.  
 All licenses authorizing vision service plan corporations to transact business in this state shall be renewable on April 1 of each year, subject to the approval of the commissioner. The vision service plan corporations licensed to do business in this state under this chapter shall obtain from the commissioner a certificate of authority for every agent writing or soliciting vision service plan contracts for the corporation in this state, and the certificate shall be renewable January 1 of each year, subject to applicable sections of the insurance laws, including the revenue law of this state for life and health and accident insurance agents.  
 After the issuance of a certificate of authority, the commissioner shall be empowered to issue orders or to publish regulations necessary for the proper enforcement of this chapter that the commissioner deems to be in the public interest. The published regulations of the commissioner shall have the effect of statute, and shall include, in particular, powers of regulating the form of subscription contracts and requirements of the contracts and prohibited provisions in the contracts, and all other matters requiring further definition or clarification within the requirements of this chapter. The commissioner has the authority to regulate rates as required by statutes now in force or hereinafter enacted by the general assembly.  
  The commissioner has the authority to suspend or cancel the license of any vision service plan corporation or any agent of the corporation for violation of this chapter or violation of the insurance laws that may apply and that are not in conflict with this chapter, after proper legal notice and a hearing, which action of the commissioner shall be subject to judicial review. The commissioner has the authority, after the issuance of a certificate of authority, to withdraw approval, previously granted, of any document required to be filed with the department under any section of this chapter. In addition, the commissioner has the authority to require a vision service plan corporation to solicit in a manner required by agents' licensing laws, and to fulfill contracts approved by the commissioner, to utilize soliciting methods provided by this chapter, or by other insurance laws, to operate in a county or counties or area different from those to which the certificate of authority was granted, and to comply with all other orders and regulations of the commissioner.   The commissioner has the power and authority to revoke and amend, after reasonable notice and hearing, any certificate, order, authority or consent made by the commissioner to a vision service plan corporation, and may also cancel or suspend the authority of the corporation to transact business in any particular county or counties or area if the commissioner finds that less than fifty-one percent (51%) of the eligible licensed optometrists practicing in that county are participating optometrists and that less than twenty-five percent (25%) of the optometrists duly licensed to practice in this state have agreed to render vision services for corporations organized or to be organized pursuant to this chapter.   
 A vision service plan corporation that neglects to make and file its annual statement in the form and within the time provided by this chapter, or neglects to reply in writing to the inquiries of the commissioner within a reasonable time as specified by the commissioner, or who otherwise violates this chapter, shall be subject to revocation of license after proper notice and right of hearing. Any agent or solicitor who violates this chapter or any written order or official regulation of the commissioner shall be subject to revocation of license after due notice and right of hearing.  
 A review of any order made by the commissioner pursuant to this chapter may be had in the circuit court of Davidson County, upon a writ of certiorari. Application for the writ shall be made within thirty (30) days after the entry of the order by the commissioner.  
 Each nonprofit vision service corporation may contract with its subscribers for vision services that may be from time to time provided under the nonprofit vision service plan adopted by the corporation. The rates charged by the nonprofit vision service corporation to its subscribers shall be consistent with the proper conduct of its business and the interest of the public and shall be subject to the approval of the commissioner. Nothing contained in this chapter or in any nonprofit vision service plan shall affect the ordinary professional relationship between the person rendering vision services under the plan and the subscriber to whom the services are rendered, and no action based upon or arising out of the relationship or relating to vision services rendered pursuant to a nonprofit vision service plan shall be maintained against the nonprofit vision service corporation operating the plan.  
 Every subscription contract made by a vision service plan corporation shall provide for the payment of vision services for a minimum period of twelve (12) months from the date of issue of the subscription certificate. The contract may provide that it shall be subject to renewal thereafter from year to year unless there has been one (1) month's prior written notice of termination by the vision service plan corporation. A subscriber shall forfeit membership upon failure to renew the contract, or upon voluntary resignation. During the first contract year, the contract may provide that the inception coverage may be deferred for not more than two (2) months from date of issue of the contract.  
  Every contract entered into by a vision service plan corporation with a subscriber shall be in writing, and a certificate stating the terms and conditions of the contract shall be furnished to the subscriber. No subscription certificate shall be issued unless it contains the following provisions, and any other applicable provisions that may be required by this chapter or other applicable laws of this state:  A statement of the amounts payable to the corporation by the subscribers and the times at which the amounts shall be paid;   A statement of the nature of the vision services to be paid for and the period during which the certificate is effective; and if there are any types of vision services to be excepted, with the approval of the commissioner, a detailed statement of the exceptions printed as specified in  56-31-127;   A statement of the terms or conditions, if any, upon which the certificate may be cancelled or otherwise terminated at the option of either party;   A statement that the subscription and certificate constitute the contract between the corporation and the subscriber, and include the endorsements and attached papers, if any, and contain the entire contract;   A statement that no statement by the subscriber in an application for a certificate shall void the contract or be used in any legal proceedings under the contract, unless the application or an exact copy of the application is included in or attached to the certificate, and that no agent or representative of the corporation, other than an officer or officers designated in the certificate, is authorized to change the contract or waive any of its provisions;   A statement that if the subscriber defaults in making any payment under the certificate, the subsequent acceptance of a payment by the corporation or by its duly authorized agent shall reinstate the certificate, but the reinstatement shall not cover the costs of vision services incurred during the period of ten (10) days after date of the acceptance;   A statement of the period of grace that will be allowed a subscriber for making any payment due under the contract. The grace period shall not be less than ten (10) days during the first contract year, and thereafter shall not be less than thirty (30) days;   A statement authorizing vision service other than by participating optometrists in cases of emergency or when consented to by the vision service plan corporation, or when the subscriber requires vision services outside the county or counties or area served by the vision service plan corporation, in which case money benefits shall be provided as optional and as specified in the subscriber's contract and approved by the commissioner. The money benefits shall be so payable whether the vision service is performed by nonparticipating optometrists or by physicians. Otherwise, a statement that indemnity in the form of cash will not be paid to any subscriber except in reimbursements paid by the subscriber to an optometrist for which the corporation was liable at the time of the payment; and   Other statements that may be required by published regulations of the commissioner.     In lieu of the certificate referred to in subsection (a), the vision service plan corporation may furnish the subscriber with a descriptive brochure containing the provisions mentioned in subsection (a).   
 In every subscription certificate or descriptive brochure referred to in this chapter:   All printed portions shall be plainly printed in type of which the face is not smaller than ten-point type;   There shall be a brief description of the subscription certificate on its first page and on the back in type not smaller than fourteen-point type. The description shall not be broader than the coverage granted in the contract;   The exceptions of the contract shall appear with the same prominence in the certificate as the benefits of the contract, and reference to the exceptions shall be specifically made in the insuring clause; and   If the contract contains any provisions purporting to make any portion of the articles of incorporation or of the bylaws of the corporation a part of the contract, that portion shall be set forth in full in the subscription certificate.   
 A vision service plan corporation may, in its discretion, receive and accept from governmental or private agencies or from other persons payments covering all or part of the costs of subscriptions to provide vision care for needy and other individuals.  
 Any dispute or controversy arising between a vision service plan corporation and any participating optometrist, or any optometrist desiring to become a participating optometrist, or any subscriber, or any other person whose subscription certificate has been cancelled, or to whom the corporation has refused to issue a certificate, may, within thirty (30) days after the dispute or controversy arises, be appealed to the commissioner, by the person allegedly aggrieved, or a person or persons designated by that person. After proper notice and hearing, the commissioner shall make a finding, which shall be binding on any vision service plan corporation or agent of the corporation, subject to judicial review.  
 This chapter is not to be construed as prohibiting any insurance company, properly qualified in this state to write accident or health or disability insurance, from making available any plan of vision service that may be approved by the commissioner under existing statutes or within the authority granted to benevolent associations.  
 Nothing in this chapter shall be construed to modify or repeal any law, or parts of law, now in force relating to the practice of medicine or surgery, or to the practice of optometry, or to the regulation of life, accident, health or casualty insurance, except as it is inconsistent with this chapter.  
 This chapter shall be known and may be cited as the Health Maintenance Organization Act of 1986.  
 As used in this chapter, unless the context otherwise requires:   For the purposes of regulating an HMO that participates in the TennCare program under Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program, affiliate means any entity that exercises control over or is controlled by the HMO, directly or indirectly through:  Equity ownership of voting securities;   Common managerial control; or   Collusive participation by the management of the HMO and affiliate in the management of the HMO or the affiliate;     Basic health care services means all those health services that a defined population might reasonably require in order to be in good health, including as a minimum, but not limited to, emergency care, inpatient hospital and physician care, ambulatory physician care and outpatient preventative medical services. In addition, an HMO that participates in the TennCare program under Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program, basic health care services includes, but is not limited to, services made necessary as the result of Title XIX federal programs or waivers for which TennCare is primarily responsible for implementation or enforcement;   Coinsurance means an enrollee's share of covered medical expenses when an enrollee and the HMO share in a specific ratio of the covered medical expenses; provided, however, that coinsurance shall not expand the ability of an HMO to offer out-of-network benefits except as otherwise provided in this chapter;   Commissioner means the commissioner of commerce and insurance;   Enrollee means an individual who is enrolled in an HMO;   Evidence of coverage means any certificate, agreement or contract issued to an enrollee setting out the coverage to which the enrollee is entitled;   Health care services means any services included in the furnishing to any individual of medical or dental care, or hospitalization, or incidental to the furnishing of the care or hospitalization, as well as the furnishing to any person of any and all other services for the purpose of preventing, alleviating, curing, or healing human illness, injury or physical disability;   Health maintenance organization (HMO) means any person that undertakes to provide or arrange for basic health care services to enrollees on a prepaid basis. The HMO may provide physician services directly through physician employees or under arrangements with individual physicians or a group or groups of physicians. The HMO may also provide or arrange for other health care services on a prepayment or other financial basis. Additionally, the HMO may provide or arrange for basic health care services on a prepayment or other financial basis with physician-hospital organizations; by so doing, the physician-hospital organization is not deemed to be an insurer or HMO;    Person means any natural or artificial person including, but not limited to, an individual, partnership, association, trust or corporation;   For the purposes of regulating an HMO that participates in the TennCare program under Title XIX of the federal Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program, person includes an individual, insurer, company, association, organization, Lloyds, society, reciprocal insurer or interinsurance exchange, partnership, syndicate, business trust, corporation, agent, general agent, broker, solicitor, service representative, adjuster, and every legal entity;     Physician-hospital organization means an organization formed to allow hospitals and physicians to jointly obtain provider contracts with HMOs and other payers of health care benefits. The organization may obtain direct aggregate or excess stop-loss insurance coverage;   Provider means any physician, hospital or other person that is licensed or otherwise authorized in this state to furnish health care services; and   Uncovered expenditures means the costs of health care services that are covered by an HMO for which an enrollee would also be liable in the event of the organization's insolvency.   
  Notwithstanding any law of this state to the contrary, any person may apply to the commissioner for and obtain a certificate of authority to establish and operate an HMO in compliance with this chapter. No person shall establish or operate an HMO in this state without obtaining a certificate of authority under this chapter. A foreign corporation may qualify under this chapter, subject to its registration to do business in this state as a foreign corporation.   Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the commissioner, and shall set forth or be accompanied by the following:  A copy of the organizational documents of the applicant, such as the articles of incorporation, articles of association, partnership agreement, trust agreement or other applicable documents, and all amendments to those documents;   A copy of the bylaws, rules and regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant;   A list of the names, addresses and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association;   A copy of any contract made or to be made between any providers or persons listed in subdivision (b)(3) and the applicant;   A copy of the form of evidence of coverage to be issued to the enrollees;   A copy of the form or group contract, if any, that is to be issued to employers, unions, trustees or other organizations;   Financial statements showing the applicant's assets, liabilities, and sources of financial support using the official blank form for HMOs prescribed by the National Association of Insurance Commissioners;   A description of the proposed method of marketing, a financial plan that includes a projection of operating results anticipated until the organization has had net income for at least two (2) years, and a statement as to the sources of working capital as well as any other sources of funding;   A power of attorney duly executed by the applicant, if not domiciled in this state, appointing the commissioner and the commissioner's successors in office, and duly appointed deputies, as the true and lawful attorney of the applicant in and for this state upon whom all lawful process in any legal action or proceeding involving the HMO on a cause of action arising in this state may be served;   A statement reasonably describing the geographic area or areas to be served;   A description of the complaint procedure to be utilized pursuant to the Tennessee Health Carrier Grievance and External Review Procedure Act, compiled in chapter 61 of this title; and   Other information the commissioner may require to make the determination required in  56-32-104.      An applicant or an HMO holding a certificate of authority granted under this section shall, unless otherwise provided for in this chapter, file a notice describing any material modification of the operation set out in the information required by subsection (b). The notice shall be filed with the commissioner prior to the modification. If the commissioner does not disapprove of the modification within thirty (30) days of filing, the modification shall be deemed approved.    Significant expansions of an HMO's enrollee population shall be considered a material modification under subdivision (c)(1), necessitating the filing of:   Current financial statements showing the HMO's assets, liabilities, and sources of financial support using the official blank form for HMOs prescribed by the National Association of Insurance Commissioners, as required by subdivision (b)(7);   A description of the proposed plan of marketing, a financial plan that includes a projection of operating results anticipated for the two (2) years following the addition of the new enrollees, and a statement as to the sources of working capital as well as any other sources of funding, all as required by subdivision (b)(8); and   Any other information required to be filed by subsection (b) that, as a result of the expansion of the HMO's enrollee population, has been materially modified.     This information shall be filed with, and reviewed by, the commissioner as delineated in subdivision (c)(1).   For purposes of this subsection (c), expansions of an HMO's enrollee population that do not exceed ten percent (10%) of the HMO's existing enrollee population in any six-month period shall not be considered a significant expansion of the HMO's enrollee population.       An applicant or an HMO holding a certificate of authority granted under this section shall file all contracts of excess or aggregate insurance with the commissioner. Any agreement between the organization and an insurer shall be subject to the laws of this state regarding excess and aggregate insurance.   An applicant must demonstrate to the commissioner of health or the commissioner's designee proof of capability to provide basic health care services efficiently, effectively and economically. The applicant shall meet the network adequacy requirements established pursuant to  56-7-2356. The commissioner of health shall report the commissioner's findings to the commissioner of commerce and insurance, who may then deny the application for a certificate of authority, as provided in  56-32-104 and 56-32-118(b).   The commissioner shall issue a temporary certificate of authority to any entity that provides or pays for medical services provided to recipients of medical assistance, as defined by  71-5-103, in exchange for a premium or subscription charge paid by the medical assistance program pursuant to the Medical Assistance Act, compiled in title 71, chapter 5, part 1, upon submission by the entity of an application for a certificate of authority as provided for in this chapter. The temporary certificate of authority shall not be issued to any entity that provides or pays for medical services on a per capita prepayment basis to any person not receiving medical services through the medical assistance program. The temporary certificate shall be valid for a period not to exceed one (1) year or until a certificate of authority is issued, whichever occurs first. The authority that allows payment under the Medical Assistance Act shall be extended to be concurrent with the temporary certificate of authority or until a new authority of payment is authorized by the medicaid agency.   
  Issuance of a certificate of authority shall be granted upon payment of the application fee prescribed in  56-32-119, if the commissioner is satisfied that the following conditions are met:  Persons responsible for the conduct of the affairs of the applicant are competent, trustworthy and possess good reputations;   The HMO will effectively provide or arrange for the provision of basic health care service on a prepaid basis through insurance or otherwise, except to the extent of reasonable enrollee cost sharing requirements such as copayments, deductibles or coinsurance; provided, however, that for basic health care services through participating network providers, the amount of coinsurance paid by the enrollee shall not exceed twenty percent (20%);   The HMO is financially responsible, and may reasonably be expected to meet its obligations to enrollees and prospective enrollees. In making this determination, the commissioner may consider:  The financial soundness of the arrangements for health care services in the schedule of charges used in connection with the health care service;   The adequacy of working capital;   Any agreement with an insurer, a hospital medical services corporation, a government, or any other organization for insuring the payment of cost for health care services or the provisions for automatic applicability of an alternative coverage in the event of discontinuance of the HMO;   Any agreement with providers for the provision of health care services;   In the event the HMO enters into an agreement with any physician-hospital organization, or any other provider, provider group, or provider network, for the provision of healthcare services on a prepayment basis or other risk sharing basis, the commissioner may not disallow the agreement on the basis that it transfers risk to the physician-hospital organization or other provider, provider group or provider network; or transfers the risk of payment for services to the physician-hospital organization or other provider, provider group or provider network; provided, that the HMO shall:   Remain contractually responsible to its enrollees;   Enter into contractual arrangements utilizing contract provisions and arrangements that ensure compliance with applicable federal law, rule, regulation or waivers, including federal requirements; and   Assure the physician-hospital organizations, providers, provider groups, or provider networks that are at substantial financial risk obtain either aggregate or per-patient stop-loss protection insurance coverage for the healthcare services included in the scope of the arrangement; or the HMO remains contractually responsible to the subcontracted providers and provides a system for reserving for its continued liability; and     Any deposit of cash or security submitted in accordance with  56-32-112; and     Nothing in the proposed method of operation, as shown by the information submitted pursuant to  56-32-103, or by independent investigation, is contrary to the public interest.     A certificate of authority shall be denied only after compliance with the requirements of  56-32-118.   
  The powers of an HMO include, but are not limited to, the following:  The purchase, lease, construction, renovation, operation or maintenance of hospitals or medical facilities, or both, and their ancillary equipment, and property reasonably required for its principal office or for purposes necessary in the transaction of the business of the organization;   The making of loans to a medical group under contract with it in furtherance of its program or the making of loans to a corporation or corporation under its control for the purpose of acquiring or constructing medical facilities and hospitals or in furtherance of a program providing health care services to enrollees;   The furnishing of health care services through providers that are under contract with or employed by the HMO;   The contracting with any person for the performance on its behalf of certain functions, such as marketing, enrollment and administration;   The contracting with an insurance company licensed in this state, or with a hospital or medical service corporation authorized to do business in this state, for the provision of insurance, indemnity, or reimbursement against the cost of health care services provided by the HMO; and   The offering of other health care services, in addition to basic health care services.     An HMO shall file notice, with adequate supporting information, with the commissioner prior to the exercise of any power granted in subdivision (a)(1), (a)(2) or (a)(4), if the dollar amount resulting from such action would exceed twenty-five percent (25%) of surplus. The commissioner shall disapprove the exercise of power only if in the commissioner's opinion it would substantially and adversely affect the financial soundness of the HMO and endanger its ability to meet its obligations. If the commissioner does not disapprove within thirty (30) days of the filing, it shall be deemed approved.   All provider contracts must include a hold harmless clause that will relieve any enrollee of a licensed HMO from any liability for services rendered by the providers except for reasonable copayment and uncovered expenses.   
  Any director, officer, employee or partner of an HMO who receives, collects, disburses or invests funds in connection with the activities of the organization shall be responsible for the funds in a fiduciary relationship to the organization.   An HMO shall maintain in force a fidelity bond on employees and officers in an amount not less than one hundred thousand dollars ($100,000) or such other sum as prescribed by the commissioner. The bonds shall be written with at least a one-year discovery period and, if written with at least a three-year discovery period, shall contain a provision that no cancellation or termination of the bond, whether by or at the request of the insured or by the underwriter, shall take effect prior to the expiration of ninety (90) days after written notice of the cancellation or termination has been filed with the commissioner, unless an earlier date of cancellation or termination is approved by the commissioner.   
   Every enrollee residing in this state is entitled to evidence of coverage.   No evidence of coverage, or amendment to the evidence of coverage, shall be issued or delivered to any person in this state until a copy of the form of the evidence of coverage, or amendment to the evidence of coverage, has been filed and approved by the commissioner.    An evidence of coverage shall contain:   No provisions or statements that are unjust, unfair, inequitable, misleading, deceptive, that encourage misrepresentation, or that are untrue, misleading or deceptive as defined in  56-32-113(a);   A clear and concise statement if a contract, or a reasonably complete summary if a certificate, of:  The health care services and the insurance or other benefits, if any, to which the enrollee is entitled;   Any limitation on the services, kind of services, benefits, or kind of benefits to be provided, including any deductible, copayment or coinsurance feature;   Where and in what manner information is available as to how services may be obtained; and   The total amount of payment for health care services and the indemnity or service benefits, if any, that the enrollee is obligated to pay with respect to individual contracts; and     A clear and understandable description of the HMO's method for resolving enrollee complaints.     Any subsequent change may be evidenced in a separate document issued to the enrollee.     A copy of the form of the evidence of coverage to be used in this state, and any amendment to the evidence of coverage, shall be subject to the filing and approval requirements of subdivision (a)(2), unless it is subject to the jurisdiction of the commissioner under the laws governing health insurance or hospital medical service corporations, in which event the filing and approval provisions of those laws shall apply. Specifically, with respect to premiums charged,  56-26-102 and 56-26-202 and rules promulgated under that section shall apply. To the extent, however, that the provisions do not apply, the requirement in subsection (c) shall be applicable.      No schedule of charges for enrollee coverage for health care services, or amendment to the schedule, may be used until a copy of the schedule, or amendment to the schedule, has been filed and approved by the commissioner.   The charges may be established in accordance with actuarial principles for various categories of enrollees; provided, that charges applicable to an enrollee shall not be individually determined based on the status of the enrollee's health. However, the charges shall not be excessive, inadequate or unfairly discriminatory. A certification by a qualified actuary or other qualified person acceptable to the commissioner of the appropriateness of the use of the charges, based on reasonable assumptions, shall accompany the filing together with adequate supporting information.     The commissioner shall, within a reasonable period, approve any form if the requirements of subsection (a) are met. It is unlawful to issue the form or to use the schedule of charges until approved. The commissioner may require the submission of whatever relevant information the commissioner deems necessary in determining whether to approve or disapprove a filing made pursuant to this section. The commissioner, if disapproving the filing, shall notify the filer. In the notice of disapproval, the commissioner shall specify the reasons for the disapproval. The commissioner's approval or disapproval of a filing shall otherwise occur in accordance with the standards established by  56-26-102 and 56-26-202 and the related rules.   
 Every HMO shall annually, on or before March 1, file with the commissioner a report on the blank prescribed by the National Association of Insurance Commissioners for HMOs. The commissioner may require additional reports deemed reasonably necessary and appropriate to enable the commissioner to carry out the commissioner's duties under this chapter.  
 Every HMO shall provide promptly to its enrollees notice of any material change in the operation of the organization that will affect them directly.  
 With the exception of investments made in accordance with  56-32-105, the funds of an HMO shall be invested only in securities or other investments permitted by the laws of this state for the investment of assets constituting the legal reserves of life insurance companies or other securities or investments that the commissioner permits.  
  To ensure the public's interest in the delivery of health care services by fiscally sound HMOs, each HMO must provide the commissioner evidence of compliance with the following minimum net worth requirements:  Before issuing any certificate of authority, the commissioner shall require that the HMO have an initial net worth of one million five hundred thousand dollars ($1,500,000), and thereafter HMOs must maintain the minimum net worth as set forth in this section. Net worth means the excess of total admitted assets over total admitted liabilities, but the liabilities shall not include fully subordinated debt approved by the commissioner;   Except as provided in subdivisions (a)(3) and (4), every HMO must maintain a minimum net worth equal to the greater of:  One million five hundred thousand dollars ($1,500,000); or   An amount totaling four percent (4%) of the first one hundred fifty million dollars ($150,000,000) of annual premium revenue as reported on the most recent annual statement filed with the commissioner and one and one half percent (1.5%) of the annual premium revenue in excess of one hundred fifty million dollars ($150,000,000). Premium revenue or premiums, as used in this chapter includes, but is not limited to, any and all payments made by the state to any entity providing health care services pursuant to any federal waiver received by the state that waives any or all of Title XIX of the federal Social Security Act, compiled in 42 U.S.C.  1396 et seq., and regulations promulgated pursuant to Title XIX, or pursuant to any other federal law as adopted by amendment to the required Title XIX state plan;     An HMO licensed before March 1, 1997 must maintain a minimum net worth of one hundred percent (100%) of the amount required by subdivision (a)(2) after June 30, 1998;   In determining net worth, no debt shall be considered fully subordinated unless in a form approved by the commissioner. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated. The interest expenses relating to the repayment of any fully subordinated debt shall be considered covered expenses;   For purposes of calculating an HMO's net worth, admitted assets includes the following, as may be subsequently modified by the commissioner:  Petty cash and other cash funds in the organization's principal or official branch office that are under the organization's control;   Immediately withdrawable funds on deposit in demand accounts, in a bank or trust company organized and regularly examined under the laws of the United States or any state, and insured by an agency of the United States government, or like funds actually in the principal or official branch office at statement date and in transit to a bank or trust company with authentic deposit credit given before the close of business on the fifth bank working day following the statement date;   The amount fairly estimated as recoverable on cash deposited in a closed bank or trust company, if the assets qualified under this section before the suspension of the bank or trust company;   Receivables due from persons that are not more than ninety (90) days past due;   Amounts due under reinsurance arrangements from insurance companies authorized to do business in this state;   Undisputed tax refunds or other receivables due from the United States or this state;   Amounts on deposit under subsection (b); and   Investments determined as allowable by the commissioner under  56-32-111;     An HMO must maintain a positive working capital. As used in this section only, working capital means current assets, including admitted stocks and admitted bonds, minus current liabilities; and   If the working capital or net worth is less than the required minimum, the HMO must submit for approval by the commissioner a written plan within thirty (30) days after the commissioner has given the HMO notice of the net worth or working capital deficiency. The commissioner may take action against the HMO under  56-32-116 or  56-32-117 if:  An HMO does not propose a plan to correct its working capital or net worth deficiency within the time frame described in subdivision (a)(7);   An HMO violates a plan that has been approved;   The commissioner determines that an improper working capital or net worth status cannot be corrected within a reasonable time; or   The commissioner determines that an organization is in such financial condition that the transaction of further business would be hazardous to its enrollees, its creditors, or the public.       To ensure that an HMO provides for contract and medical services in the case of insolvency or liquidation, each HMO must maintain deposits in custodial or controlled accounts as described in this section.  Before issuing any certificate of authority, the commissioner shall require each HMO to deposit with the commissioner or, at the discretion of the commissioner, with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities, or any combination of these or other measures that are acceptable to the commissioner that at all times shall have a value of not less than nine hundred thousand dollars ($900,000);   An HMO that is in operation on June 1, 1997, shall maintain a deposit equal to nine hundred thousand dollars ($900,000), in the manner set forth in subdivision (b)(1);   In addition to the deposit requirements in this section, an HMO shall also maintain on deposit in the manner set forth in subdivision (b)(1) one hundred thousand dollars ($100,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of twenty million dollars ($20,000,000) and less than one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner, and fifty thousand dollars ($50,000) for each ten million dollars ($10,000,000) or fraction of ten million dollars ($10,000,000) of annual premium revenue in excess of one hundred million dollars ($100,000,000) as reported on the most recent annual financial statement filed with the commissioner;   In any year in which the accumulated deposit of an HMO is more than the amount required to be maintained by the organization under the terms of this section, at the organization's request the commissioner shall reduce the previously accumulated deposit by the amount that the deposit exceeds the amount of deposit required by this section;   The deposit shall be an admitted asset of the HMO in the determination of net worth;   All income from deposits shall be an asset of the organization. An HMO that has been allowed by the commissioner to make a securities deposit may withdraw that deposit or any part of the deposit after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value as approved by the commissioner. No substitute deposit shall be allowed unless approved in advance by the commissioner; and   The deposit shall be used and shall be considered held in trust to protect the interests of the HMO's enrollees and to assure continuation of health care services to enrollees of an HMO that is in rehabilitation or liquidation. If the HMO is placed voluntarily or involuntarily in rehabilitation or liquidation, the deposit shall immediately prior to the filing of the rehabilitation or liquidation proceeding vest in the state of Tennessee.     Every HMO shall, when determining liabilities for purposes of calculating the organization's net worth, include an amount estimated in the aggregate to provide for any unearned premium and for the payment of all claims for health care expenditures that have been incurred, whether reported or unreported, are unpaid and for which the organization is or may be liable, and to provide for the expense of adjustment or settlement of the claims. The liabilities may be computed in accordance with rules and regulations promulgated by the commissioner upon reasonable consideration of the ascertained experience and character of the HMO.   
  No HMO or representative of the HMO may cause or knowingly permit the use of advertising that is untrue or misleading, solicitation that is untrue or misleading, or any form of evidence of coverage that is deceptive. For the purpose of this chapter:  A statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect that is or may be significant to an enrollee of, or person considering enrollment with, an HMO;   A statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding health care coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation or disadvantage or possible significance to an enrollee of, or person considering enrollment in, an HMO, if the benefit or advantage or absence or limitation, exclusion or disadvantage does not in fact exist; and   An evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, is such as to cause a reasonable person, not possessing special knowledge regarding HMOs and evidences of coverage for HMOs, to expect benefits, services, charges or other advantages that the evidence of coverage does not provide or that the HMO issuing the evidence of coverage does not regularly make available for enrollees covered under the evidence of coverage.     Chapter 8, part 1 of this title shall be construed to apply to HMOs and evidences of coverage, except to the extent that the commissioner determines the nature of HMOs and evidences of coverage render chapter 8, part 1 of this title inappropriate.   An HMO may not cancel or refuse to renew an enrollee, except for reasons stated in the organization's rules applicable to all enrollees, or for the failure to pay the charge for coverage, or for other reasons promulgated by the commissioner.   No HMO, unless licensed as an insurer, may refer to itself as an insurer or use a name deceptively similar to the name or description of any insurance or surety corporation doing business in this state.   Any person not in possession of a valid certificate of authority issued pursuant to this chapter may not use the phrase health maintenance organization or HMO in the course of operation.   
  The commissioner may, after notice and hearing, promulgate reasonable rules and regulations necessary to provide for the licensing of agents. Agent means a person who is appointed or employed by an HMO and who engages in solicitation or membership in the organization. Agent does not include a person enrolling members on behalf of an employer, union or other organization to whom a master subscriber contract has been issued.   The commissioner may by rule exempt certain classes of persons from the requirement of obtaining a license, if other existing licensing procedures make a separate HMO agent's license unnecessary.   
  The commissioner of commerce and insurance, in cooperation with the commissioner of health, shall coordinate the regulation of any HMO holding a certificate of authority to ensure the financial viability of the HMO and that the HMO is currently providing and shall in the future provide health care services efficiently, effectively and economically. The commissioner of commerce and insurance and the commissioner of health shall develop an interdepartmental agreement to coordinate the functions necessary for the proper administration of this section.   The commissioner of commerce and insurance may make an examination of the affairs of any HMO and any providers with whom the HMO has contracts, agreements or other arrangements as often as is reasonably necessary for the protection of the interests of the people of this state. The examinations of HMOs shall occur not less frequently than once every five (5) years. The commissioner of commerce and insurance may also contract, at reasonable fees for work performed, with qualified, impartial outside sources to perform audits or examinations, or portions of audits or examinations, pertaining to the qualification of an entity for issuance for a certificate of authority to operate as an HMO or to determine the continued compliance of any operating HMO. Any contracted assistance shall be under the direct supervision of the commissioner of commerce and insurance. The results of any contracted assistance shall be subject to the review of, and approval, disapproval, or modification by, the commissioner of commerce and insurance.   The commissioner of health or the commissioner's designee may make an examination concerning an HMO's capability to provide health care services efficiently, effectively and economically, and any providers with whom the HMO has contracts, agreements, or other arrangements as often as is reasonably necessary for the protection of the interests of the people of this state. The examinations of HMOs shall occur not less frequently than once every three (3) years. The commissioner of health shall report findings to the commissioner of commerce and insurance, who may then suspend or revoke a certificate of authority issued to the HMO as provided in  56-32-116.   Every HMO shall submit its books and records for the examinations and in every way facilitate the completion of the examinations. For the purpose of examinations, the commissioner of commerce and insurance and the commissioner of health may administer oaths to, and examine, officers and agents of the HMO.   The expenses of examinations of HMOs under this section shall be assessed against the HMO being examined and remitted to the commissioner for whom the examination is being conducted.   In lieu of the examinations, the commissioner of commerce and insurance or the commissioner of health may accept the report of an examination made by the commissioner of insurance or the commissioner of health of another state.   
  The commissioner may suspend or revoke any certificate of authority issued to an HMO under this chapter if the commissioner finds that any of the following conditions exist:  The HMO is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in any other information submitted under  56-32-103, unless amendments to the submissions have been filed with and approved by the commissioner;   The HMO issues evidence of coverage or uses a schedule of charges for health care services that do not comply with the requirements of  56-32-107;   The HMO does not provide or arrange for basic health care services;   The HMO is unable to fulfill its obligations to furnish health care services;   The HMO is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees;   The HMO has failed to implement the complaint system required by  56-32-110 [repealed] in a reasonable manner to resolve complaints;   The HMO, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive or unfair manner;   The continued operation of the HMO would be hazardous to its enrollees;   The HMO has otherwise failed substantially to comply with this chapter; or   The HMO has filed with the department sworn financial statements that contain material omissions or errors.     A certificate of authority shall be suspended or revoked only after compliance with the requirements of  56-32-118.   When the certificate of authority of an HMO is suspended, the HMO shall not, during the period of suspension, enroll any additional enrollees, except newborn children or other newly acquired dependents of existing enrollees, and shall not engage in any advertising or solicitation whatsoever.   When the certificate of authority of an HMO is revoked, the HMO shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs, and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of the HMO. It shall engage in no further advertising or solicitation whatsoever. The commissioner may, by written order, permit such further operation of the organization as the commissioner may find to be in the best interest of enrollees, to the end that enrollees will be afforded the greatest practicable opportunity to obtain continuing health care coverage.   
  Any rehabilitation, liquidation, conservation or supervision of an HMO shall be deemed to be the rehabilitation, liquidation, conservation or supervision of an insurance company and shall be conducted under the supervision of the commissioner pursuant to chapter 9 of this title. The commissioner may apply for an order directing the commissioner to rehabilitate, liquidate, conserve or supervise an HMO upon any one (1) or more grounds set out in chapter 9 of this title, or when in the commissioner's opinion the continued operation of the HMO would be hazardous either to the enrollees or to the people of this state. Enrollees shall have the same priority in the event of liquidation or rehabilitation as the law provides to policyholders of an insurer.   A claim by a health care provider for an uncovered expenditure has the same priority as an enrollee; provided, that the provider of services agrees not to assert the claim against any enrollee of the HMO.    For the purposes of supervision, rehabilitation, or liquidation of HMOs that participate in the TennCare program under Title XIX of the federal Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program, and in addition to the powers and duties set forth in this chapter, the department or the chancery court shall have the power to examine and investigate the affairs of every person, entity, HMO, an affiliate of the parent of the HMO, or an affiliate of the HMO, in order to determine whether the person, entity, HMO, an affiliate of the parent of the HMO, or an affiliate of the HMO, is operating in accordance with this chapter and title 71, chapter 5. For purposes of this subdivision (c)(1), affiliate means any entity that exercises control over or is controlled by the HMO, directly or indirectly through:  Equity ownership of voting securities;   Common managerial control; or   Collusive participation by the management of the HMO and affiliate in the management of the HMO or the affiliate.     For purposes of subdivision (c)(1), person includes an individual, insurer, company, association, organization, Lloyds, society, reciprocal insurer or interinsurance exchange, partnership, syndicate, business trust, corporation, agent, general agent, broker, solicitor, service representative, adjuster, and every legal entity.     
  The commissioner of commerce and insurance and the commissioner of health may, after notice and hearing, promulgate reasonable rules and regulations, as are necessary or proper to carry out this chapter.   When the commissioner has cause to believe that grounds for the denial of an application for a certificate of authority exist, or that grounds for the suspension or revocation of a certificate of authority exist, the commissioner shall notify the HMO in writing specifically stating the grounds for denial, suspension or revocation and fixing a time of at least thirty (30) days thereafter for a hearing on the matter.   The Uniform Administrative Procedures Act, compiled in title 4, chapter 5, shall apply to proceedings under this section.   
 Every HMO subject to this chapter shall pay to the commissioner the following fees for:   Filing an application for certificate of authority, one thousand three hundred dollars ($1,300);   Filing an amendment to the organization documents that require approval, sixty dollars ($60.00);   Filing each annual report, one hundred ninety-five dollars ($195); and   Renewal of the certificate of authority each year, four hundred forty-five dollars ($445).   
  The commissioner may, in lieu of suspension or revocation of a certificate of authority under  56-32-118, levy an administrative penalty in an amount not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000), if reasonable notice in writing is given of the intent to levy the penalty and the HMO has a reasonable time within which to remedy the defect in its operations that gave rise to the penalty citation. The commissioner may augment this penalty by an amount equal to the sum that the commissioner calculates to be the damages suffered by enrollees or other members of the public.    The commissioner may issue an order directing an HMO or a representative of an HMO to cease and desist from engaging in any act or practice in violation of this chapter.   Within fifteen (15) days after service of the cease and desist order, the respondent may request a hearing on the question of whether acts or practices in violation of this chapter have occurred. The hearings shall be conducted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.     In the case of any violation of this chapter, if the commissioner elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued pursuant to subsection (b), the commissioner may institute a proceeding to obtain injunctive or other appropriate relief in the chancery court of Davidson County.   
  Except as otherwise provided in this chapter, the insurance laws and the hospital or medical service corporation laws are not applicable to any HMO granted a certificate of authority under this chapter. This subsection (a) does not apply to an insurer or hospital or medical service corporation licensed and regulated pursuant to the insurance law or the hospital or medical service corporation laws of this state, except with respect to its HMO activities authorized and regulated pursuant to this chapter.   Solicitation of enrollees by an HMO granted a certificate of authority, or its representatives, shall not be construed to violate any law relating to solicitation or advertising by health professions.   Any HMO authorized under this chapter shall not be deemed to be practicing medicine and shall be exempt from title 63, chapter 6, relating to the practice of medicine.   The Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title, shall be applicable to HMOs to the extent provided in that act, and to the extent provided in  56-32-122.   HMOs providing utilization review services for mental health and chemical dependency care for their own enrollees shall be subject to chapter 6, part 7 of this title, regarding the provision of utilization review services for mental health or chemical dependency care. This subsection (e) shall not apply to utilization review services provided to TennCare enrollees.   
 No person may make a tender for or a request or invitation for tenders of, or enter into an agreement to exchange securities for or acquire in the open market or otherwise, any voting security of an HMO or enter into any other agreement if, after the consummation of the agreement, that person would, directly or indirectly, or by conversion or by exercise of any right to acquire, be in control of the HMO, and no person may enter into an agreement to merge or consolidate with or otherwise to acquire control of an HMO, unless, at the time any offer, request or invitation is made or any agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, the person has filed with the commissioner and has sent to the HMO, information required by  56-11-103(b)(1)-(5) and (13), and the offer, request, invitation, agreement or acquisition has been approved by the commissioner. Approval by the commissioner shall be governed by  56-11-103(d)(1) and (2).  
  Each employer, public or private, except any public entity that has a metropolitan form of government and a population of not less than four hundred thousand (400,000), according to the 1980 federal census or any subsequent federal census, in this state that offers its employees a health benefit plan and employs not less than twenty-five (25) employees, shall afford at least two (2) qualified HMOs the opportunity to bid or to provide health care services. This dual offering is contingent upon written requests being received from the HMOs for inclusion in the employer's health benefit plan, and provided the HMOs are different types or models, such as medical group or staff and individual practice association. Where there is a prevailing collective bargaining agreement, the selection of the HMO or organizations to be made available to the employees shall be made under the agreement.   No employer in this state shall be required to pay more for health benefits as a result of the application of this section than would otherwise be required by any prevailing collective bargaining agreement or other contract for the provision of health benefits to its employees; provided, that the employer or benefits fund shall pay to the HMO chosen by each employee or member an amount equal to the lesser of:  The amount paid on behalf of its other employees or members for health benefits; or   The HMO's charge for coverage approved by the commissioner pursuant to  56-32-107.     
  All HMOs doing business in this state shall pay tax on the gross amount of all dollars collected from an enrollee or on an enrollee's behalf in the amount of six percent (6%).   The taxes provided for in this section shall be due and payable in an electronic format approved by the commissioner on a quarterly basis with payments being due and payable on June 1, August 20, December 1 and March 1. Any company failing or refusing to render tax statement information or to pay taxes as specified in this section shall be subject to   56-4-216.   The amount of taxes collected under this section shall be a single credit against the sum total of the taxes imposed by the Franchise Tax Law, compiled in title 67, chapter 4, part 21, and by the Excise Tax Law, compiled in title 67, chapter 4, part 20.   
  Any data or information pertaining to the diagnosis, treatment or health of any enrollee or applicant obtained from the person or from any provider by any HMO shall be held in confidence by the HMO and shall not be disclosed by the HMO to any person, except upon any one (1) of the following circumstances:  To the extent that it may be necessary to carry out the purposes of this chapter;   Upon the express consent of the enrollee or applicant;   In the event of a claim or litigation between an enrollee or applicant and the HMO wherein the data or information is pertinent;   To implement the purposes of title 71, chapter 5; or   When the data or information is required to be disclosed by the authority of another statute.     Nothing in this section shall be construed to amend  63-1-150 regarding confidentiality of records and statements relating to quality improvement committees of the HMO that shall remain privileged and not subject to subpoena or discovery.   
  HMOs shall be subject to the same requirements regarding prompt payment of claims, and the additional liability for bad faith failure to pay claims promptly, as are applicable to insurance companies under  56-7-105.   This subsection (b) is intended to ensure the prompt and accurate payment of all provider claims for services delivered to an enrollee in the TennCare program that are submitted to an HMO involved in a TennCare line of business or a subcontractor of that HMO. Accordingly, each such HMO or subcontractor must establish and implement the following procedures for the processing of provider claims and the resolution of any disputes regarding the payment of claims:  The HMO shall ensure that ninety percent (90%) of claims for payment for services delivered to a TennCare enrollee, for which no further written information or substantiation is required in order to make payment, are processed, and, if appropriate, paid within thirty (30) calendar days of the receipt of the claims. The HMO shall process, and if appropriate pay, within sixty (60) calendar days ninety-nine and one half percent (99.5%) of all provider claims for services delivered to an enrollee in the TennCare program. If a provider agreement requires the HMO to pay a provider a capitated payment each month, the payment shall be made by the time specified in the contract between the provider and the HMO. If the contract between the provider and HMO does not specify a payment schedule, payment shall be made by the tenth day of each calendar month. Disputed capitated provider payments are subject to independent review;  Pay means that the HMO shall either send the provider cash or cash equivalent in full satisfaction of the allowed portion of the claim, or give the provider a credit against any outstanding balance owed by that provider to the HMO;   Process means the HMO must send the provider a written or electronic remittance advice or other appropriate written or electronic notice evidencing either that the claim has been paid or informing the provider that a claim has been either partially or totally denied and specify all known reasons for denial. If a claim is partially or totally denied on the basis that the provider did not submit any required information or documentation with the claim, then the remittance advice or other appropriate written or electronic notice must specifically identify all the information and documentation;      If a provider's claim is partially or totally denied in a remittance advice or other appropriate written or electronic notice from an HMO, or a provider's previously allowed claim is subsequently partially or totally denied by an HMO by an appropriate written or electronic notice, then the provider may file a written request to the commissioner to submit the claim denial to an independent reviewer as provided in subdivision (b)(3). In the event the provider receives no remittance advice or other appropriate written or electronic notice from an HMO either partially or totally denying a claim within sixty (60) calendar days of the HMO's receipt of the claim, then the provider may file a written request to the commissioner to submit the claim to an independent reviewer as provided in subdivision (b)(3). However, prior to sending this request, the provider must send a written request for reconsideration to the HMO that identifies the claim or claims in dispute, the reasons for the dispute and any documentation supporting the provider's position or request by the HMO. The HMO must respond to the reconsideration request within thirty (30) calendar days after receipt of the request. The response may be a letter acknowledging the receipt of the reconsideration request with an estimated time frame in which the HMO will complete its investigation and provide a complete response to the provider. If the HMO determines that it needs longer than thirty (30) calendar days to completely respond to the provider, the HMO's reconsideration decision shall be issued within sixty (60) calendar days after receipt of the reconsideration request, unless a longer time to completely respond is agreed upon in writing by the provider and the HMO. If the HMO continues to deny the provider's claims or the HMO does not respond to the reconsideration request within the time frames allowed in this subdivision (b)(2)(A), then the provider may file a written request with the commissioner to submit the claims to an independent reviewer as provided in subdivision (b)(3);   The provider must include a copy of the written request for reconsideration with the request for an independent review. If the provider does not have a written contract with the HMO that denied the claim on the date the request is filed with the commissioner, then the provider must also send the commissioner payment satisfactory to the commissioner to cover the fees incurred by the independent reviewer. This payment shall be refunded to the provider if the provider is not ultimately required to pay the independent reviewer. Otherwise, the payment shall be used to reimburse any entity that paid the independent reviewer. The provider shall also furnish the commissioner any other information needed by the commissioner to process the provider's request;   The provider must file a request for independent review within three hundred sixty-five (365) calendar days after the HMO denies the claim for the first time or recoups the claims payment;   Claims payment disputes involved in litigation, arbitration or not associated with a TennCare member are not eligible for independent review;     Each HMO operating a TennCare line of business must contract with independent reviewers selected in accordance with subdivision (b)(4), and implement the following procedures to resolve disputed provider claims:  The commissioner shall use best efforts to refer an equal proportion of the total disputed claims to each independent reviewer. A provider may request, and the commissioner may allow, the claims of a provider involving the same HMO to be aggregated and submitted for simultaneous review by an independent reviewer when the specific reason for non-payment of the claims aggregated involve a dispute regarding a common substantive question of fact or law. The mere fact that a claim is not paid does not create a common substantive question of fact or law, unless the provider has received no remittance advice or other appropriate written or electronic notice from an HMO, either partially or totally denying a claim, within sixty (60) calendar days of the HMO's receipt of the claim and the claims regard a common substantive question of fact or law. The reviewer shall, within fourteen (14) calendar days of receipt of the disputed claim or claims, request in writing that both the provider and the HMO provide the reviewer any and all information and documentation regarding the disputed claim or claims. The reviewer shall request the provider and HMO to identify all information and documentation that has been submitted by the provider to the HMO regarding the disputed claim or claims, and advise that the reviewer will not consider any information or documentation not received within thirty (30) calendar days of receipt of the reviewer's request unless the HMO or provider requests the independent reviewer for additional time to complete the investigation of independent review requests when a provider elected to aggregate their claims. Thereupon, the reviewer may grant the HMO or provider an additional thirty (30) calendar days. The reviewer shall then examine all materials submitted and render a decision on the dispute within sixty (60) calendar days of the receipt of the disputed claim or claims, unless either the reviewer requests guidance on a medical issue from the TennCare appeals unit, or the reviewer requests and receives an extension of time from the commissioner to resolve the dispute. In reaching a decision, the reviewer shall not consider any information or documentation from the provider that the provider did not submit to the HMO during that organization's review of the provider's disputed claim or claims;   Should the reviewer need assistance on a medical issue connected with the disputed claim or claims, then the reviewer shall refer this specific issue for review and response to the person in charge of the TennCare appeals unit within the TennCare bureau, unless the department in writing designates a different contact. Medical issues requiring referral may include whether a medical benefit is a covered service under the TennCare contract. The TennCare appeals unit may respond to the request, refer the request to an independent contractor, or refer the request to the TennCare bureau for review. A request to determine whether a service received was medically necessary must be responded to by a physician licensed by one (1) or more states in the United States. The appeals unit shall provide a concise response to the request within ninety (90) calendar days after receipt. If the appeals unit seeks the guidance of the TennCare bureau on whether a benefit is a covered service, then the bureau must respond to that request in writing in sufficient time to allow the appeals unit to timely respond to the reviewer. The reviewer shall make a final decision within thirty (30) calendar days of receipt of the appeals unit's response;   The reviewer shall send the HMO, the provider, and the TennCare division of the department of commerce and insurance a copy of the decision. Once the reviewer makes a decision requiring an HMO to pay any claims or portion of the claims, then the HMO must send the payment in full to the provider within twenty (20) calendar days of receipt of the reviewer's decision;   Within sixty (60) calendar days of a reviewer's decision, either party to the dispute may file suit in any court having jurisdiction to review the reviewer's decision and to recover any funds awarded by the reviewer to the other party. Any claim concerning a reviewer's decision not brought within sixty (60) calendar days of the reviewer's decision will be forever barred. Suits filed pursuant to this section will be conducted in accordance with the Tennessee Rules of Civil Procedure, and the review by the court will be de novo  without regard to the reviewer's decision. The reviewer, or any person assisting the reviewer in reaching a decision, shall be prohibited from testifying at the court proceeding considering the reviewer's decision. Unless the contract between the parties specifies otherwise, venue and jurisdiction will be in accordance with Tennessee law. If the dispute between the parties is not fully resolved prior to the entry of a final decision by the court initially hearing the dispute, then the prevailing party shall be entitled to an award of reasonable attorney's fees and expenses from the nonprevailing party. Reasonable attorney's fees means the number of hours reasonably expended on the dispute multiplied by a reasonable hourly rate, and shall not exceed ten percent (10%) of the total monetary amount in dispute or five hundred dollars ($500), whichever amount is greater;   In lieu of requesting independent review, a provider may pursue any appropriate legal or contractual remedy available to the provider to contest the partial or total denial of the claim. For all claims filed on or after October 1, 1999, the state may not mandate that the provider and HMO resolve the claims payment dispute through arbitration;   Providers who are owned by state or local governmental entities shall retain the statutory right of setoff if available. Judicial review of a reviewer's decision regarding a state or local governmental provider shall be in the chancery court of Davidson County, and not in the Tennessee claims commission, unless the provider and HMO have agreed to another appropriate venue and jurisdiction by contract. The Prompt Pay Act, compiled in title 12, chapter 4, part 7, does not impact any claim of sovereign immunity that a state or local governmental provider may possess, although the provider will be responsible for paying any appropriate attorney's fees and expenses awarded under subdivision (b)(3)(D);   All costs associated with implementing these procedures shall be paid by the applicable HMO. However, the provider shall reimburse the HMO the independent reviewer's fee within twenty (20) calendar days of receipt of the reviewer's decision, if the reviewer finds that the HMO properly denied the claim being reviewed. If a provider fails to properly reimburse the HMO, the TennCare division of the department of commerce and insurance may prohibit that provider from future participation in the independent review process;   The HMO shall compensate the independent reviewer pursuant to their written agreement within thirty (30) calendar days of the HMO's receipt of the independent reviewer's bill for services rendered. If the HMO fails to pay the bill for the independent reviewer's services, then the independent reviewer may request payment directly from the state from any funds held by the state that are payable to the HMO; and   The procedures in subdivisions (b)(3)(A)-(H) shall not apply to any claims filed with the HMO before October 1, 1999, even if that claim is refiled after that date;     The commissioner shall appoint a panel of five (5) persons, known as the selection panel for TennCare reviewers. The panel shall consist of two (2) provider representatives, one (1) representative from each of the two (2) HMOs with the largest number of TennCare enrollees, and the commissioner or the commissioner's duly designated representative. The panel shall select a chairperson, and all decisions of the panel shall be made by a majority vote of the members of the panel. The panel shall select and identify an appropriate number of independent reviewers to be retained by each HMO under subdivision (b)(3). The panel shall negotiate the rate of compensation for each reviewer, and the rate of compensation shall be the same for each reviewer. Each HMO engaged in a TennCare line of business, as a condition of participating in this contract or in the TennCare program, shall contract with each reviewer and agree to pay the rate of compensation negotiated by the panel. The members of the panel shall not be paid. The panel shall meet at least twice a year;   By no later than May 1 of each year, the commissioner shall report to the department of health and to the fiscal review committee the number of requests for TennCare claims review filed for each HMO operating a TennCare line of business during the prior calendar year. The commissioner shall also generally report the outcome of these independent review requests for each HMO. In addition, the commissioner shall report the name of any provider whose claim denial is upheld in more than fifty percent (50%) of the independent review requests, as well as the number of claim reviews with the claims denial upheld;   All claims for services furnished to a TennCare enrollee filed with an HMO must be processed by either the HMO or by a single subcontractor retained by the organization for the purpose of processing claims. However, another single entity can process claims related to each of the following: pharmacy, vision, dental or mental health benefits or durable medical equipment;   The HMO shall ensure all its subcontractors processing TennCare claims follow the same claims processing and resolution procedures required by the Prompt Pay Act, compiled in title 12, chapter 4, part 7. TennCare claims processed by a subcontractor are subject to the prompt payment requirements of this statute. Claims denied by a subcontractor are subject to independent review. If a provider requests independent review of a claim denied by a subcontractor, the HMO contracted with that subcontractor must initially pay the independent reviewer's fee. If the independent reviewer upholds the subcontractor's denial, the provider must reimburse the HMO the reviewer's fee. If the independent reviewer finds for the provider, the HMO contracted with the subcontractor must pay the provider within twenty (20) calendar days of the reviewer's decision;   An HMO that subcontracts with another entity to obtain services for TennCare enrollees shall guarantee and assure the payment of all contracted amounts agreed to be paid to the providers by that entity or that entity's agent. This does not preclude the HMO from seeking reimbursement from the subcontractor for any amounts paid. Nor does this prevent the HMO from asserting any legal defenses to the payment of a provider's claims that were available to the subcontractor. Claims filed with a subcontractor are subject to the prompt payment requirements of this statute. Claims denied by a subcontractor are subject to independent review. If a provider requests independent review of a claim denied by a subcontractor, the HMO contracted with that subcontractor must initially pay the independent reviewer's fee. If the independent reviewer upholds the subcontractor's denial, the provider must reimburse the HMO the reviewer's fee. If the independent reviewer finds for the provider, the HMO contracted with the subcontractor must pay the provider within twenty (20) calendar days of the reviewer's decision; and   Any HMO found by the commissioner to be in violation of this subsection (b) shall be subject to revocation or suspension of its certificate of authority under  56-32-116 or, in the alternative, the imposition of the penalties and other remedies set forth at  56-32-120.     
  As used in this section, managed health insurance issuer means an entity that:  Offers health insurance coverage or benefits under a contract that restricts reimbursement for covered services to a defined network of providers; and   Is regulated under this title or is an entity that accepts the financial risks associated with the provision of health care services by persons who do not own or control, or who are not employed by, the entity.      Every managed health insurance issuer shall offer, or contract with another carrier to offer, an additional benefit at the option of the employee, or other principal enrollee, as follows:  A point of service option that provides benefits for covered services through health professionals and providers who are not members of the network; or   A preferred provider organization plan.     The managed health insurance issuer shall fully disclose to the enrollee, in clear, understandable language, the terms and conditions of each option, the copayments or other cost-sharing features of each option and the costs associated with each option provided by the issuer. The commissioner shall promulgate rules regarding presentation of these terms and conditions, including a suggested standard format, to facilitate the comparison by the enrollee of the terms and conditions of each option. The obligation of a managed health insurance issuer to make the offer described in this section may be satisfied by the managed health insurance issuer providing to the employer or other plan sponsor presentation materials for dissemination to employees or principal enrollees.     The amount of any additional premium required for the options described in subsection (b) may be paid by the purchaser of the health plan or may be paid by the enrollee of the group. The additional premium, taking into account any copayments or other cost-sharing features, shall not exceed an amount that is fair and reasonable in relation to the benefits provided, as determined by the commissioner.    Under the option described in subsection (b), the rate of reimbursement for health providers out of the network shall be the same as the rate of reimbursement for noncapitated providers in the network; provided, that copayment, co-insurance and other cost-sharing features may be different for out of network providers.   A managed health insurance issuer shall not be required to reimburse an out of network provider for nonemergency services unless the provider:  Has disclosed to the patient a reasonable range of the total charges for the services being provided; and   Has advised the patient that the provider may bill the patient for the balance of any charges that are not otherwise reimbursed by the managed health insurance issuer. If, after request by the patient, the provider fails to disclose a reasonable range of the total of charges for any nonemergency services provided, the patient shall not be liable for the charges.       The option described in subsection (b) shall be a part of every contract issued by a managed health insurance issuer; provided, that an employer who employs not more than one hundred (100) full-time employees may reject the point of service option in writing.   The requirements of this section shall be satisfied if the employer or other person sponsoring the health insurance or health benefits plan includes for all principal enrollees a preferred provider organization plan, a plan that offers unrestricted access to providers, or a point of service benefit as specified in this section.   Nothing contained in this section shall be construed or interpreted as applying to the TennCare programs administered pursuant to the waivers approved by the United States department of health and human services, to entities that qualify to participate in the Medicare+Choice program, or to individual health insurance contracts.   Notwithstanding any other law to the contrary, an HMO may underwrite directly the point of service benefit required by this section.   
  The managed health insurance issuer shall not discriminate with respect to participation, referral, reimbursement of covered services or indemnification as to any provider within a class of providers who is acting within the scope of the provider's license or certification under state law, solely on the basis of the license or certification. In selecting among providers of health services for membership in a provider network, the managed health insurance issuer or other network shall not discriminate against a class of providers who provide services that are covered by the plan by prohibiting the class of providers from membership in the provider network. This section shall not be construed as prohibiting managed health insurance issuers from including providers or classes of providers only to the extent necessary to meet the needs of the managed health insurance issuer's plan and its enrollees, or from limiting referrals or establishing any other measure designed to maintain quality and control costs consistent with the responsibilities of the plan. This chapter shall not be construed as creating coverage for any service that is not otherwise covered under the terms of the managed health insurance issuer's plan.   As used in this section, class of providers means optometrists, ophthalmologists, podiatrists, pharmacists, and chiropractors.   
  A managed health insurance issuer shall not terminate or nonrenew a contract with a health care provider, or take other retaliatory action against a health care provider, because the provider:  Communicated with an enrollee with respect to the enrollee's health status, health care or treatment options, if the health care provider is acting in good faith and within the provider's scope of practice as defined by law;   Disclosed accurate information about whether a health care service or treatment is covered by an enrollee's health coverage plan; or   Expressed personal disagreement with the decision made by the managed health insurance issuer regarding treatment or coverage provided to a patient of the provider, or assisted the enrollee in pursuing the grievance process relative to the decision of the managed health insurance issuer; provided, the health care provider makes it clear that the provider is acting in a personal capacity, and not as a representative of, or on behalf of, the managed health insurance issuer.     Nothing in this section shall prohibit:  A managed health insurance issuer from taking action against a provider if the health plan has evidence that the provider's actions are illegal, constitute health care liability or are contrary to accepted medical practices;   A contract provision or directive that requires any contracting party to keep confidential or to not use or disclose specific amounts paid to a provider, provider fee schedules, provider salaries and other proprietary information of a specific contract issued by a managed health insurance issuer; or   A managed health insurance issuer from making a determination not to pay for a particular medical treatment or service or to enforce reasonable peer review or utilization review protocols.     Nothing in this section shall be construed as permitting retaliatory action by a managed health insurance issuer against a provider because the provider disclosed to the patient accurate information regarding the basis of the provider reimbursement.   This section shall not be construed to create a cause of action or remedy that would not exist in the absence of this section, except for the purposes of enforcing the prohibitions set forth in this section.    A managed health insurance issuer shall develop and implement procedures to ensure that health care providers are regularly informed of information maintained by the issuer to evaluate the performance or practice of the health care provider. The issuer shall consult with health care professionals in developing methodologies to collect the health care provider's profiling, tiering, comparison, or ratings data, which may include, but is not limited to, claims data. For those issuers that publicize or otherwise make known to participating providers or their members the results of the provider's performance, the managed health insurance issuer shall, sixty (60) days prior to the public publishing of provider-specific information such as profiling, tiering, performance comparison, including, but not limited to, pay for performance programs or ratings data, do all of the following:  Make available to the provider all methodologies, quality measures, data, analysis, and conclusions, ratings relied upon by the issuer and the degree to which each is relied upon by the issuer and allow the provider a reasonable opportunity to review and provide additional data or medical records and comments on the information proposed to be published by the issuer regarding the individual provider's profiling, tiering, comparison, or ratings;   Should a provider submit additional data or medical records or comments under this subsection (e), that submission shall be made within thirty (30) days of the receipt of notice that the issuer will publish the information. If a provider submits additional data or medical records or comments on the information proposed to be published by the issuer, and the issuer elects to alter the provider's profiling, tiering, comparison, or ratings in accordance with and pursuant to the additional data or medical records and comments, then the issuers shall accordingly modify the provider's profiling, tiering, comparison or ratings prior to public publication of provider-specific information;   The issuer shall provide with the publication of the provider performance rating information a prominently displayed disclosure of the data sources used to develop the rating information, an explanation of the limitations of data derived from these sources, and an explanation of the specific aspects or domains of provider performance that were measured to derive the ratings; and   Whenever the issuer periodically updates any data results or findings publicized pursuant to this section, and to the extent those updates result in a lower rating of the provider's performance rating, the issuer shall repeat the requirements established by subdivisions (e)(1)(A)-(C).     Notwithstanding any law, contract or other legal standard to the contrary, upon satisfying and complying with the requirements of this subsection (e), the issuer may publicize the results of a provider's performance rating in the manner and frequency that the issuer deems appropriate.     
  It is the intent of this section to establish a procedure to verify that the HMOs and behavioral health organizations participating by contract in the TennCare program are delivering the health benefits required under their TennCare contracts with the state. This procedure shall also assure that each of these entities have adequate provider networks to ensure the effective and efficient delivery of health care services to TennCare enrollees.   The commissioner, with the advice and consent of the office of the comptroller of the treasury, shall contract with an entity independent of the state of Tennessee to conduct annual reviews of organizations contracting with the state in the TennCare program. The contract shall be entered into in accordance with appropriate state procedures. The purpose of this contract shall be to verify, on an annual basis, that each HMO and behavioral health organization contracting with the state of Tennessee in the TennCare program is delivering health care services in conformity with the TennCare contract and applicable statutory authority. This annual review shall include verifying that each of these organizations maintains an adequate network. The standards for network adequacy are defined by the TennCare contract and applicable statutes and regulations. Nothing in this subsection (b) precludes the expansion of the state's current contract with its External Quality Review Organization (EQRO) to include having the EQRO conduct this review. The contractor shall submit all findings for each organization in writing to the commissioner, the comptroller of the treasury and the director of the TennCare bureau.   The department of commerce and insurance is authorized to conduct a survey of persons disenrolled by the TennCare program to determine if the persons were able to procure health insurance in the private market, or otherwise had access to healthcare benefits. The survey will not commence until a survey form is developed with the assistance of the TennCare bureau of the department of finance and administration, adopted by the commissioner of commerce and insurance, and approved by the state comptroller of the treasury. The survey will be conducted of persons who were disenrolled during the period from January 1, 2002, to December 31, 2002.   
 For the purposes of regulation and oversight of HMOs that participate in the TennCare program under Title XIX of the federal Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program, and in addition to the powers and duties set forth in this title, the department of commerce and insurance has the power to examine and investigate the affairs of every person, entity, HMO, an affiliate of the parent of the HMO, or an affiliate of the HMO, in order to determine whether the person, entity, HMO, an affiliate of the parent of the HMO, or an affiliate of the HMO, is operating in accordance with this chapter and title 71, chapter 5.  
  As used in this section, affiliate has the same meaning as defined in  56-32-102.    For verification and audit purposes, each managed care organization that participates in the TennCare program shall provide to the department of commerce and insurance the following information for its organization:  The names and addresses of all persons required to file a disclosure with the commissioner of health under  71-5-137(a) and (b);   An explanation of the interest in or connection with the managed care organization, or an affiliate of the organization, in accordance with  71-5-137(a), of each person required to file a disclosure under subdivision (b)(1)(A); and   A listing of all compensation of any form paid to each person required to file a disclosure under subdivision (b)(1)(A) related to the person's interest in or connection with the managed care organization, or an affiliate of the organization, in accordance with  71-5-137(a).     The information shall be provided on or before January 15 of each year for the preceding calendar year.     
 Any information and documentation obtained by the department pursuant to  56-32-117(c) or  56-32-132, shall be considered confidential, unless the commissioner in the commissioner's sole discretion determines to disclose the information or documentation.  
 A violation of this chapter shall subject the violator to the penalty contained in  56-1-801.  
 A managed health insurance issuer shall not discriminate with respect to participation, referral, reimbursement of covered services, or indemnification as to any provider who is acting within the scope of the provider's license or certification under state law, solely on the basis of the license or certification. In selecting among providers of health services for membership in a provider network, a managed health insurance issuer or other network shall not discriminate against a class of providers who provide services that are covered by the plan by prohibiting the class of providers from membership in the provider network. As used in this section, class of providers means licensed physician assistants as defined in  63-19-102, certified nurse midwives as described in  56-7-2407, and nurses in advanced practice as defined in  56-7-2408. This section shall not be construed as prohibiting managed health insurance issuers from including providers or classes of providers only to the extent necessary to meet the needs of the managed health insurance issuer's plan and its enrollees or from limiting referrals or establishing any other measure designed to maintain quality and control costs consistent with the responsibilities of the plan. This section shall not be construed as creating coverage for any service that is not otherwise covered under the terms of the managed health insurance issuer's plan.  
   If authorization is given and a pharmacy claim is adjudicated by an HMO or its agent to any pharmacy services provider for care to be delivered to a covered beneficiary under any evidence of coverage issued by the HMO, including those organizations participating in the TennCare program, collectively referred to as organization, then the organization acting directly or by delegation through an agent acting on behalf of the organization shall not subsequently rescind or modify that authorization or deny the authorized payment to the pharmacy services provider for the authorized service after the provider renders the authorized service in good faith and pursuant to the authorization, except for payments made as a result of the provider's misrepresentation or fraud.   If the bureau of TennCare provides notice to the HMO or its agent that a person is eligible to participate in the TennCare program, and, if based on good faith reliance on the information, the HMO makes a payment to a pharmacy provider for providing pharmacy services to the person enrolled in the TennCare program, and if the bureau of TennCare later rescinds the eligibility for the person, then the bureau of TennCare shall remain liable to the HMO for any amount the HMO paid to the provider for the pharmacy services. The bureau of TennCare shall not be liable when the eligibility is rescinded in the case of fraud or death as defined in the contract. The bureau of TennCare shall not be liable due to an error or delay on the part of the managed care organization or its agents in processing eligibility information received from the bureau of TennCare.     Notwithstanding subsection (a), any organization may request the pharmacy to adjust or correct an adjudicated claim to correct incorrect data elements, including incorrect billing units, incorrect national drug code (NDC) numbers and incorrect prescriber identification numbers submitted in error and in good faith by the pharmacy. An organization shall provide the pharmacy an opportunity to correct claims submitted by the pharmacy in good faith. If the pharmacy does not correct the adjudicated claim requested within thirty (30) days of receipt of the request, then the organization may rescind, modify or recoup the funds paid on the requested claim and shall not be in violation of this section.   
  This chapter shall be known and may be cited as the Title Insurance Law.   All title insurance companies, title insurance agents and the business of title insurance in this state shall be regulated, licensed and controlled by and under this chapter to the exclusion of all other laws and parts of laws of a general nature not specifically applicable.   
 As used in this chapter, unless the context otherwise requires:   Associate includes any:  Employee of a producer of title insurance business;   Spouse or relative within the second degree by blood or marriage of a producer of title insurance business or of an associate of a producer of title insurance business;   Person who has a financial interest in a producer of title insurance business or in an associate of a producer of title insurance business;   Person in whom a producer of title insurance or an associate of a producer of title insurance business has a financial interest;   Organized for profit business in which a producer of title insurance business or an associate of a producer of title insurance business is a director, officer, partner or employee;   Corporation making consolidated returns for United States income tax purposes with any producer of title insurance business or with any associate of a producer of title insurance business; or   Person with whom a producer of title insurance business or an associate of a producer of title insurance business has any agreement, arrangement or understanding, or pursues any course of conduct designed to evade  this chapter;     Commissioner means the commissioner of commerce and insurance, and includes all deputies legally appointed and constituted to act in the commissioner's place and stead by other applicable law of the state;   Controlled business describes that portion of a title insurance company's, title insurance agent's or title insurance agency's business in this state with which there is connected in any way, directly or indirectly:  Producers of title insurance business who have financial interests in the title insurance company, title insurance agent or title insurance agency;   Associates of the producers; or   Associates who have financial interests in the title insurance company, title insurance agent or title insurance agency;     Financial interest means any interest, legal or beneficial, such that the holder is or will be entitled to a share of the net profits or net worth of the business in which the interest is held;   Person means an individual, firm, association, partnership, estate, trust, fiduciary, syndicate or corporation;   Policy means any instrument, contract or agreement whereby and whereunder title insurance companies insure or guarantee titles to real property, or interests therein, or liens or encumbrances on the property, as defined in subdivision (11);   Producer of title insurance business means:  The insured or one (1) of the insureds under a policy of title insurance, except that, if the interest of the insured is held in a fiduciary capacity, the true or beneficial owner of the interest shall be deemed the insured for the purposes of this definition; or   Any person engaged in the trade, business, occupation or profession of:   Buying, selling, or leasing, or brokering or acting as agent in the buying, selling or leasing of interests in real property;   Making, brokering or acting as agent in the making of loans secured by interests in real property;   Building or developing for sale or lease real property, either improved or unimproved;   Providing escrow or closing services in connection with the transfer of interests in real property or the making of loans secured by interests in real property, other than as a title insurance agent or a title insurance agency, or as a full-time employee of a title insurance company, a title insurance agent or a title insurance agency; or   Practicing law, other than as a full-time employee of a title insurance company, a title insurance agent or a title insurance agency;       Risk rate means the aggregate consideration paid, or to be paid, to a title insurance company for the insurance liability assumed under the policy of title insurance, or binder therefor, issued and delivered, or proposed to be issued and delivered, by the company, exclusive of all other charges incident to the issuance of the binder or policy for abstracting, record searching, certificates as to the record title to real estate, escrow and closing services, or other related services that may be offered by any title insurance or guaranty company and which company is authorized by law and its charter to perform, or the company's costs and expenses of procuring examinations of titles by attorneys approved or selected by it for such purpose;   Title insurance agency means a firm, association, trust, corporation, cooperative, joint stock company or other legal entity authorized in writing by a title insurance company to solicit title insurance, collect premiums, determine insurability in accordance with the underwriting rules and standards prescribed by the title insurance company that the agency represents, and issue title insurance policies, title insurance binders, commitments to insure and endorsements thereto in its behalf;   Title insurance agent means either:  A natural person who meets the requirements of or performs the same functions as a title insurance agency; provided, that title insurance agent does not include officers and salaried employees of any title insurance company; or   A member, officer or employee of a title insurance agency who exercises the powers and performs the duties of the agency;     Title insurance business means the insuring or guaranteeing of titles to real property, or interests in real property, or the validity, accuracy or sufficiency of liens or encumbrances on real property; provided, that nothing contained in this chapter shall make it necessary for any corporation making abstracts of title, certifying to the correctness of abstracts of title, issuing certificates as to the record title to real estate, or furnishing information regarding title to real estate, to comply with this chapter, when the information does not take the form of, and is not, in fact, an insurance of the title to real estate, or interest in real estate, or of the liens or other encumbrances; and   Title insurance company means any corporation, foreign or domestic, authorized by its charter to conduct a title insurance business as defined by this chapter and is sometimes referred to as insurer or insurers.   
 Every corporation complying with this chapter has, in addition to the powers and authority under its charter and existing laws applicable to the company, the following additional authority:   To own, lease or construct abstract or title plants, and operate and maintain the same, and make, certify, guarantee and issue abstracts of title; and   To act as escrow agent in connection with any transaction relating to the purchase, sale, exchange, lease, mortgage or other acquisition, disposition or encumbrance of property, real or personal, or any interest therein.   
 No corporation qualified to engage in the business of title insurance under this chapter shall guarantee the payment of any note, bond, mortgage or obligation of any other person or corporation, or execute collateral trust indentures as principal, or issue bonds secured by mortgages pledged under collateral trust indentures or certificates of participation in notes or mortgages, or engage in the business of banking.  
 The business of title insurance in this state is placed under the supervision and control of the commissioner, and every corporation engaged in title insurance business in this state shall be subject to the requirements of this chapter, and none other than a corporation, domestic or foreign, duly qualified under this chapter shall engage in the business of title insurance in this state.  
 Whenever any title insurance company has made the deposit of money or securities, as required by this chapter, or, if a foreign title insurance company, has duly filed the certificate referred to in  56-35-112 and satisfied the commissioner that it has on deposit with the proper officer of some other state cash or authorized securities, which, when added to any sums so deposited in this state, are sufficient to meet the deposit requirements of  56-35-112, submitted satisfactory evidence to the commissioner that it has complied with this chapter, and paid a fee of one hundred dollars ($100) for issuance of a certificate to do business, then the commissioner shall issue a certificate renewable July 1 of each year, reciting that the insurer has complied with the title insurance law of this state and is authorized to do a title insurance business in this state.  
  Every title insurance company qualifying under this chapter shall annually, on or before March 1 of each year, file an annual statement as provided in  56-35-108, and pay to the department of commerce and insurance a sum equal to two and one half percent (2.5%) of all risk rate charges collected by it, on risks located in this state, during the year next preceding, which tax shall be subject to the same credits and exemptions as provided for the gross premiums tax on other insurance companies under  56-4-211, 56-4-213 and 56-4-217, and that shall be in lieu of any privilege tax, general or special; and all other taxes, state or local, except as provided by  56-4-213.   Any title insurance company, qualifying under this chapter, that fails to make the returns and payments correctly and promptly on or before March 1 of each year in an electronic format approved by the commissioner, shall be subject to penalty as provided for the gross premium tax on other insurance companies under  56-4-216.   The minimum amount of tax payable for any company qualifying under this chapter for the privilege of transacting business for any calendar year shall be one hundred fifty dollars ($150).   Nothing in this section shall be construed to provide an exemption from the sales and use tax imposed by title 67, chapter 6.   
 The commissioner shall, in December of each year, furnish to each of the insurance companies authorized to do business under this chapter, two (2) blanks in form adopted for their annual statement. The companies shall, annually, on or before March 1, file in the office of the commissioner a statement that shall exhibit its financial condition on December 31 of the previous year, and its business of that year. The annual statement shall be in the form and of the specifications the commissioner may require. The statement shall be subscribed and sworn to by the president and secretary, or in their absence, by two (2) of its principal officers.  
 Any foreign title insurance company desiring to transact a title insurance business in this state must first file with the commissioner a written power of attorney appointing and authorizing the commissioner as its agent for the purpose of acknowledging or receiving service of process and upon whom process may be served, in all proceedings that may be instituted against the company in any court of this state, or in any court of the United States in this state, which power of attorney shall continue in force so long as any liability remains outstanding against the insurer in this state.  
  No person within this state shall act or hold the person out as a title insurance agency unless the person has been issued a certificate of authority by the commissioner.   Any application for the certificate shall be in writing and on forms prescribed by the commissioner and shall be accompanied by a filing fee of one hundred ten dollars ($110).   
  Every title insurance company shall file with the commissioner its schedules of rates and every modification of any rate that it proposes to use in this state. The schedule of rates and every modification of rates shall be filed by a rating organization meeting the qualifications set forth in  56-35-132 unless an insurer files its own rates.   No title insurance company, agency, or agent shall charge any rate for any policy or contract of title insurance except in accordance with filings or rates that are in effect for the title insurance company as provided in this part.   The filing shall state the proposed effective date of rates, shall indicate the character and extent of the coverage contemplated, and shall be in the manner, form and detail as may be prescribed by the commissioner.    The commissioner shall within sixty (60) days after the receipt of any filing disapprove any rate the commissioner determines to be unfair, unjust or unfairly discriminatory.   Any rate filed may be used or charged after the expiration of sixty (60) days from the date it has been so filed, unless the commissioner has issued notice of the commissioner's prior written disapproval thereto within that period.   The notice of written disapproval shall specify the reasons therefor and shall state that a hearing will be granted within twenty (20) days after request in writing by the insurer or rating organization. In the conduct of the hearing, the commissioner or any regularly salaried employee specially designated by the commissioner for such purpose has the power to administer oaths, to require the appearance of and examine any person under oath, and to require the production of books, records or papers relevant to the inquiry upon the commissioner's or other employee's own initiative or upon the request of any interested insurer or rating organization.     
  Every corporation now organized, or which may be organized, under the laws of this state, or any foreign corporation now or in the future doing business in this state, insuring title to real estate, or insuring owners, mortgagees, lessees or others against loss by reason of defective title to real estate, or encumbrances thereon, before engaging in the business, shall have a paid-up capital stock of not less than one hundred thousand dollars ($100,000) and shall deposit with the commissioner as provided in this section, the sum of one hundred thousand dollars ($100,000) in cash or securities of kind and character as provided in this section, out of either capital or surplus, which fund shall be known as Title Insurance Fund; and the insurer may, at any time, and from time to time, for the purpose of qualifying itself to do business in any other state or states, or for any other purpose, voluntarily increase the amount of the fund; provided, that the increase or increases, when made, shall become and remain a part of the fund in the same manner as if the sum to which the fund is so increased was the amount required by this chapter, until the purpose for which the additional deposit was made shall cease to exist, whereupon the insurer shall have the right to withdraw the additional sums so deposited upon submission to the commissioner of satisfactory evidence that the insurer is no longer required to maintain the same. In addition to the paid up capital stock set out in this subsection (a), the corporation shall establish and maintain a surplus account to the extent that the capital stock and surplus account is in the aggregate amount of not less than five hundred thousand dollars ($500,000); provided, that the surplus shall not be required of those corporations chartered by the secretary of state on or before January 1, 1980.   A foreign title insurance company that satisfies the commissioner that it has on deposit with the proper officer of some other state cash or securities of the kind and character required by this chapter for the protection of all policyholders and creditors of the insurer in the whole of the United States shall be relieved from the requirement of making deposits for such purpose in this state to the extent that it has the funds so deposited for such purposes in another state; provided, that the foreign insurance company shall file with the commissioner, in proper form, the current certificate of the proper officer with whom the cash or securities are deposited, stating the amount of the cash and the time and amount of each security so deposited, and the minimum worth which the officer is satisfied that the total deposit has and certifying that the deposit is being maintained in public custody and control pursuant to law in such state for the protection of the insurer's policyholders and creditors in the whole of the United States.   
 The commissioner shall permit any title insurance company, its agents, attorneys, representatives or assigns, to collect, receive and use the income and any and all remittances of any of the income received by the commissioner, from all securities so deposited, and the commissioner shall deliver, or cause to be delivered to them or any of them, any and all coupons or other evidences of the income to which they may be entitled.  
 Every domestic insurer shall annually set apart, at the end of each year, into an account to be known as Title Insurance Reserve, an amount equal to ten percent (10%) of the risk rates collected, during the year then ending, by the insurer on account of the title insurance business, until the insurer has a fund totaling one hundred thousand dollars ($100,000). The reserve shall be maintained in the treasury of the insurer as additional security to holders of title insurance policies or guarantees issued by the insurer. The insurer shall, on or before March 1 of each year, furnish the commissioner a sworn statement, verified by its president and secretary and under its corporate seal, showing that the sum of ten percent (10%) of all the risk rates so received by it during the year ending on December 31 next prior thereto, has been duly set aside and is held by the insurer in the title insurance reserve.  
 The deposit required to be kept with the commissioner as the title insurance fund, together with any additions to the fund made as authorized in this chapter, and the title insurance reserve to be held by the insurers, and all unearned premium or risk rate reserves, shall be made and held either in lawful money of the United States, or in any investment authorized by the laws of Tennessee for nonassessment life insurance companies doing business in the state, and shall be safely kept for the benefit and security of all persons insured by the insurer for claims and demands arising out of the title insurance business, and shall be held and considered specially pledged as security for the title claims and demands; provided, that the insurer may change its deposits at any time and from time to time by depositing other securities of the kinds and descriptions in this section authorized to be deposited; and provided further, that the deposit, or change in deposit, shall be subject to the approval of the commissioner.  
 In order to further more equitable establishment and adjustment of rates, including risk rates, or premiums and forms of contracts, policies and guarantees, the commissioner, every insurer and rating organization may exchange information and experience data with each other, and with the insurance supervisory officers and insurers in other states and with national organizations and associations and may consult and cooperate with them in respect to rates, including risk rates, or premiums and forms of contracts, policies and guarantees; and an insurer or rating organization licensed under this chapter may act in concert with each other and with others with respect to any and all matters pertaining to the making of rates, rating plans, or rating systems, or the preparation of forms of policies, contracts, or guarantees of title, underwriting rules, surveys and investigations, or the furnishing of loss and expense statistics or other information and data, or carrying on research.  
 Nothing in this chapter is intended to prohibit or discourage reasonable competition, or to prohibit or discourage uniformity in insurance rates, including risk rates, or premiums, or practices, or contracts, policies or guarantees of title.  
  It is unlawful for any applicant for a policy of title insurance, or any person, firm or corporation, on behalf of the applicant, or any other person, firm or corporation whomsoever, to request, receive or obtain from a title insurance agent, or a title insurance company, any commission, discount, rebate, special favor, advantage or inducement, or to engage or participate in any collusion with respect thereto, or for any title insurance company, or agent, to give, grant or rebate any part of a premium for title insurance to any lender, mortgage broker or real estate agent or broker or real estate builder or developer, and no person shall engage in business as a title insurance agent in this state, nor accept or hold a certificate of agency for the chief and primary purpose of securing some special advantage, rebates, commissions or concessions on title insurance written for the person, or some person, firm, corporation or lending institution in which the person is interested, or with which the person is connected or associated, and all of which acts and things are expressly prohibited and forbidden by this chapter.   Nothing in this chapter shall be construed to make unlawful the distribution of profits or dividends to the owner or owners or shareholders of a title insurance company, agency, or agent; provided, that the distribution is made in the ordinary course of business and in accordance with sound accounting principles.   
 Nothing in this chapter shall be construed to affect in any manner the relationship of attorney and client, or the fees paid for services performed by a licensed attorney at law.  
 Nothing in this chapter, or in any other law of this state, shall be construed as preventing or prohibiting any attorney at law, real estate company, firm, broker or salesperson, lending institution, or the officers and employees of any institution, from advocating, recommending or requiring title insurance in any transaction in which they are engaged, nor transmitting to a title insurance agent or title insurance company, qualified in this state, applications for title insurance, arising out of the transactions, together with the charges for transactions, and in so doing no party shall be held to be a title insurer, nor to be engaged in business as a title insurance agent.  
 The commissioner is authorized to make reasonable rules and regulations as are or may be necessary for the administration of this chapter, but no rule or regulation shall take effect until it has been duly filed in the commissioner's office and until and after the expiration of thirty (30) days' written notice to all title insurance companies doing business in the state and after a hearing, if a hearing has been requested in writing by any title insurance company prior to the termination of the thirty-day period.  
 In the conduct of any hearing, the commissioner, or the commissioner's deputy or duly authorized examiner, specially designated for the purpose, has the power to administer oaths and to examine any person under oath, and in connection therewith, to require the attendance of any person and the production of any books, records or papers relative to the inquiry.  
 Any title insurance company desiring to retire from business in Tennessee shall furnish the commissioner satisfactory evidence that it no longer has any liability outstanding upon any title insurance policy made by it in the conduct of its business in Tennessee, or that it has reinsured its outstanding policies in a solvent corporation, or corporations authorized to do a title insurance business in Tennessee, and the commissioner shall, thereupon, return to the title insurance company all deposits made by it under this chapter.  
 Title insurance companies and title insurance business shall be governed, regulated and controlled by this chapter to the exclusion of all other laws applicable to insurance companies or insurance business, to the extent that such other laws are in conflict with this chapter.  
  The commissioner is charged with the administration of this chapter.   Each violation of this chapter is a Class C misdemeanor.   In addition to the criminal penalties, the commissioner may assess a civil penalty not to exceed five hundred dollars ($500) for each and every violation of any provisions of this chapter, or of any rule or regulation duly promulgated under this chapter.   
 Whenever the laws or regulations of any other state impose upon a title insurance company incorporated by or organized under the laws of this state, or upon any agents of a title insurance company, any taxes, licenses or other fees, in the aggregate, or any fines, penalties, deposit requirements or other material obligations, prohibitions or restrictions, in excess of those imposed by the then existing laws of this state for similar purposes on similar companies of other states doing business in this state then, in every case, all title insurance companies, and all agents of the state, doing business or establishing an agency or agencies in this state, shall in this state be subject to the same fines, penalties, deposit requirements and other material obligations, prohibitions and restrictions, and shall be required to pay in this state the same taxes, licenses, or other fees as are applicable under the laws of the foreign state to Tennessee title insurance companies, or agencies of the Tennessee title insurance companies, doing business in the foreign state.  
 No policy or contract of title insurance shall be issued until and unless the title insurance company has caused to be conducted a reasonable search and examination of the title; provided, that the commissioner shall exercise no supervision and control over, and title insurance companies and title insurance rating organizations shall not file as part of their schedule of rates for title insurance, that part of the charge for title insurance applicable to search and examination in connection with insurance of title to real property located in counties with a population of less than one hundred seventy-five thousand (175,000), according to the 2010 federal census or any subsequent federal census.  
 Every title insurance company, agency and agent shall:   Keep books of account and records and vouchers pertaining to the business of title insurance in such a manner that the commissioner or the commissioner's authorized representative may readily ascertain whether the company, agency or agent has complied with any and all applicable laws and regulations; and   Maintain a separate record of all receipts and disbursements made while handling escrows, settlements and closings in connection with the business of title insurance and shall establish a separate account for the handling of funds received in the course of the transactions.   
  Except as provided by  56-35-201 and 56-35-204, the commissioner shall refuse to issue any new license or certificate to any title insurance company, title insurance agent, or title insurance agency, unless the applicant therefor shall agree to abide by any one (1) of the following terms and conditions:  The gross operating revenues for any fiscal year attributable to the placement or issuance of policies or contracts of title insurance derived from all sources of controlled business shall not exceed forty percent (40%) of the gross operating revenues of the company, agent or agency;   The company, agent or agency will be operated as a subsidiary of a financial institution with its primary business being that of accepting deposits and making real estate loans and subject to regulation, inspection, and supervision of the United States government or an agency of the United States; or   The title insurance agency or agent is to be operated by an attorney, a single partnership of attorneys, or a single professional corporation of attorneys as an ancillary part of the general practice of law.     Any violation of the terms and conditions of the agreement shall serve as grounds for the commissioner to suspend or revoke the license or certificate to which the agreement pertains and to assess a civil penalty as provided by  56-35-127.   
  Unless it files its own rates, every title insurance company shall be a member of or subscribe to a rating organization licensed under this chapter and every filing or any modification of any rate, schedule, form, contract, or other item required by this chapter or by any rule or regulation made by the commissioner shall be made on behalf of the title insurance company by the rating bureau of which it is a member or to which it subscribes.   A corporation, an unincorporated association, a partnership or an individual, whether located within or outside the state, may make application for a license as a rating organization for title insurance companies and shall file with the application:  A copy of its constitution, its articles of agreement or association or its certificate of incorporation, and of its bylaws, rules and regulations governing the conduct of its business;   A list of its members and subscribers;   The name and address of a resident of this state upon whom notices or orders of the commissioner or process affecting the rating organization may be served; and   A statement of its qualifications as a title insurance rating organization.     If the commissioner finds that the applicant is qualified, the commissioner shall issue a license authorizing the applicant to act as a rating organization for title insurance companies. The application shall be granted or denied in whole or in part by the commissioner within sixty (60) days after the date of its filing with the commissioner. The licenses issued pursuant to this section shall remain in effect until suspended or revoked by the commissioner. The fee for the license shall be five hundred dollars ($500).   Each rating organization shall furnish its ratemaking service without discrimination to all of its members and subscribers and shall, subject to reasonable rules and regulations, permit any title insurance company, not admitted to membership, to become a subscriber. The refusal of any rating organization to admit a title insurance company as a subscriber shall, at the request of the title insurance company, be reviewed by the commissioner at a hearing held upon at least ten (10) days' written notice to the rating organization and the title insurance company. If the rating organization fails to grant or reject a title insurance company's application for subscribership within thirty (30) days after it was made, the title insurance company may request a review by the commissioner as if the application had been rejected. If the commissioner finds that the title insurance company has been refused admittance to the rating organization as a subscriber without justification, the commissioner shall make an order directing the rating organization to admit the title insurance company as a subscriber. If the commissioner finds that the action of the rating organization in refusing admittance to a title insurance company as a subscriber is justified, the commissioner shall make an order affirming its action.   Except as provided in subsection (f), each member of or subscriber to a rating organization shall adhere to the schedule of rates filed in its behalf by the rating organization.   Any member of or subscriber to a rating organization may appeal to the commissioner from the decision of the rating organization in approving or rejecting any proposed change in or addition to the filings of the rating organization; and the commissioner shall, after a hearing held on not less than ten (10) days' written notice to the appellant and to the rating organization, issue an order approving the decision of the rating organization or directing it to give further consideration to the proposal. The failure of a rating organization to take action or make a decision within thirty (30) days after submission to it of a proposal under this subsection (f) shall constitute a rejection of the proposal within the meaning of this subsection (f).   The commissioner shall, at least once in five (5) years, make or cause to be made an examination of each rating organization licensed in this state. The reasonable cost of the examination shall be paid by the rating organization examined upon presentation to it of a detailed account of the cost. The officers, managers, agents and employees of the rating organization may be examined under oath and shall exhibit all books, records, accounts, documents or agreements governing its method of operation. The commissioner may waive the examination upon proof that the rating organization has, within a reasonably recent period, been examined by the insurance supervisory official of another state, pursuant to the laws of that state, and upon the filing with the commissioner of a copy of the report of the examination.   
  In connection with any transaction involving the purchase or sale of a fee simple possessory interest (title evidencing beneficial ownership) in real property in this state, the person conducting or handling the settlement, at or before the closing of settlement and disbursement of any funds, shall obtain from the purchaser a statement in writing that the purchaser has received a notice that owner's title insurance may be available to the purchaser and that the purchaser does or does not desire to purchase the insurance coverage. The notice shall not be required of a trustee under a deed of trust or in transactions that are to convey only a security interest in the property of an existing owner. In addition, notice under this section is not intended to duplicate and shall not be required where, in connection with the issuance of a mortgagee's title policy, notice with respect to owner's title insurance is given pursuant to rules of the department under this chapter. The notice may be combined with or attached to any other notices required of the purchaser; provided, that the notice required by this section is separately signed.   The following or any other substantially similar form shall be sufficient for the purposes of this section:  Notice and Acknowledgment With Respect to Owner's Title Insurance   RE:  (address or brief property description)   Pursuant to  56-35-133, the undersigned purchaser or purchasers, hereby acknowledge(s) that they have received a notice that owner's title insurance may be available to them at their expense.   I(we) hereby desire to obtain owner's title insurance.   I(we) hereby decline to obtain owner's title insurance.   Tennessee law requires that you sign this acknowledgment. I (we) further acknowledge that the settlement agent in this transaction [or insert name of settlement agent here] shall have no responsibility to the undersigned for the status of the title to the real estate we are purchasing.   Signature of Purchaser or   Purchasers   Date:   Notice and Acknowledgment With Respect to Owner's Title Insurance RE: (address or brief property description) Pursuant to   56-35-133 , the undersigned purchaser or purchasers, hereby acknowledge(s) that they have received a notice that owner's title insurance may be available to them at their expense.  I(we) hereby desire to obtain owner's title insurance.  I(we) hereby decline to obtain owner's title insurance. Tennessee law requires that you sign this acknowledgment. I (we) further acknowledge that the settlement agent in this transaction [or insert name of settlement agent here] shall have no responsibility to the undersigned for the status of the title to the real estate we are purchasing. Signature of Purchaser or Purchasers Date:   Click to view form.    In the event that the person conducting or handling the settlement shall fail to obtain from the purchaser the statement required by this section, the closing or settlement agent may cure the omission at any time subsequent to the closing of settlement but prior to actual or constructive notice of a claim or possible claim against the title of the real estate that was the subject of the settlement by sending a certified letter, return receipt requested, to the last known address of the purchaser, which includes the notification provided in this section.   The notification provided by this section shall not be required in any of the following transactions:  A judicial or nonjudicial foreclosure;   A sale pursuant to a court decree;   A tax sale;   A transfer evidenced by a deed upon which recording tax is not payable pursuant to  67-4-409; or   Any transaction wherein the purchaser has elected to obtain owner's title insurance or wherein the seller has elected to provide owner's title insurance to the purchaser.     
  No person within this state shall act as or hold out to be a title insurance agent unless properly licensed in accordance with chapter 6, part 1 of this title.   The examination administered to applicants for a title insurance agent's license shall include questions regarding the search and examination of title to real property.   Any title insurance agent who is employed by a title insurance agency or company shall not be required to enter into any agreement, term or condition as set forth in  56-35-131 insofar as the agent's employment with the title insurance agency or company is concerned; provided, that the agent meets all other licensing requirements.   
  Every title insurance agent licensed shall, within thirty (30) days after the date the license is issued, file with the commissioner a bond in the amount of twenty-five thousand dollars ($25,000), or cash and/or securities in like amount.   The bond, or cash and/or securities, on file with the commissioner shall be maintained for so long as the title insurance agent's license remains in effect.   The bond shall be made payable to this state for the use and benefit of all persons who suffer pecuniary loss in a real estate transaction, involving the solicitation or issuance of title insurance, caused by any act of fraud, dishonesty, theft, embezzlement or willful misconduct on the part of the title insurance agent.   Any person suffering the pecuniary loss may bring suit on the bond in the person's own name in any court of competent jurisdiction in Tennessee.   The bond shall be executed by a surety company authorized to do business in Tennessee, and shall be in a form acceptable to the commissioner.   Nothing in this section shall be construed to be in derogation of any other rights which may be held or accrued by any person involved in the solicitation, transaction, or issuance of title insurance.   
 No portion of the expense of examination, satisfaction of the requirements of this chapter for the filing of a bond or cash and/or securities, or any other qualification for the issuance or continuance of a title insurance agent's license shall be paid for or defrayed by a title insurance company.  
  Every title insurance company qualified under this chapter shall obtain from the commissioner approval of appointments for every agent writing or soliciting insurance for it as provided in this state. Appointments of agents shall expire one minute past midnight (12:01 a.m.), January 1 of each year, or may be terminated by the insurer at any time by submitting the required termination form to the commissioner as set forth in  56-6-153 [repealed].   Annually, and prior to January 1 of each year, every title insurance company shall file with the commissioner, in the form and manner that the commissioner prescribes, a designation or certification of all its agents whose appointments are to be renewed.   The fee for each appointment or renewal of an insurance agent and for each duplicate request for appointment of an insurance agent shall be six dollars ($6.00) and shall be in lieu of all other taxes on this privilege. Appointment fees shall not be refundable.   This section does not apply to any executive, traveling salaried employees or persons employed by the agents solely for the performance of clerical, stenographic or similar office duties.   
 Appointments of agents may be revoked, at any time, by an instrument in writing signed by the president or vice president of the appointing company and filed with the commissioner, and shall be effective from the date received and filed by the commissioner.  
 This chapter shall be known and may be cited as the Standard Nonforfeiture Law for Individual Deferred Annuities.  
 This chapter does not apply to any reinsurance, group annuity purchased under a retirement plan or plan of deferred compensation established or maintained by an employer, including a partnership or sole proprietorship, or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under the Internal Revenue Code,  408 (26 U.S.C.  408), premium deposit fund, variable annuity, investment annuity, immediate annuity, any deferred annuity contract after annuity payments have commenced or reversionary annuity, nor to any contract that shall be delivered outside this state through an agent or other representative of the company issuing the contract.  
  In the case of contracts issued on or after March 12, 2004, no contract of annuity, except as stated in  56-36-102, shall be delivered or issued for delivery in this state unless it contains in substance the following provisions, or corresponding provisions, which in the opinion of the commissioner are at least as favorable to the contract holder, upon cessation of payment of considerations under the contract:  That upon cessation of payment of considerations under a contract, or upon the written request of the contract owner, the company shall grant a paid-up annuity benefit on a plan stipulated in the contract of the value as is specified in  56-36-105  56-36-108 and 56-36-110;   If a contract provides for a lump sum settlement at maturity, or at any other time, that upon surrender of the contract at or prior to the commencement of any annuity payments, the company shall pay in lieu of any paid-up annuity benefit a cash surrender benefit of the amount as is specified in  56-36-105, 56-36-106, 56-36-108, and 56-36-110. The company may reserve the right to defer the payment of the cash surrender benefit for a period not to exceed six (6) months after demand therefor with surrender of the contract after making written request and receiving written approval of the commissioner. The request shall address the necessity and equitability to all policyholders of the deferral;   A statement of the mortality table, if any, and interest rates used in calculating any minimum paid-up annuity, cash surrender or death benefits that are guaranteed under the contract, together with sufficient information to determine the amounts of the benefits; and   A statement that any paid-up annuity, cash surrender or death benefits that may be available under the contract are not less than the minimum benefits required by any statute of the state in which the contract is delivered and an explanation of the manner in which the benefits are altered by the existence of any additional amounts credited by the company to the contract, any indebtedness to the company on the contract, or any prior withdrawals from or partial surrenders of the contract.     Notwithstanding the requirements of this section, any deferred annuity contract may provide that if no considerations have been received under a contract for a period of two (2) full years and the portion of the paid-up annuity benefit at maturity on the plan stipulated in the contract arising from considerations paid prior to the period would be less than twenty dollars ($20.00) monthly, the company may at its option terminate the contract by payment in cash of the then present value of the portion of the paid-up annuity benefit, calculated on the basis of the mortality table, if any, and interest rate specified in the contract for determining the paid-up annuity benefit, and by such payment shall be relieved of any further obligation under the contract.   
  Prior to July 1, 2006, a company may elect to comply with this subsection (a) or subsection (b). On and after July 1, 2006, all companies shall comply with subsection (b). The minimum values as specified in this chapter in  56-36-105  56-36-108 and 56-36-110 of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this section:    and increased by any existing additional amounts credited by the company to the contract.    With respect to contracts providing for flexible considerations issued prior to July 1, 2002, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to that time at a rate of interest of three percent (3%) per annum of percentages of the net considerations, as defined in subdivision (a)(1)(B), prior to that time, decreased by the sum of:  Any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of three percent (3%) per annum; and   The amount of any indebtedness to the company on the contract, including interest due and accrued;     With respect to contracts providing for flexible considerations issued on and after July 1, 2002, the minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to such time at a rate of interest of one and one half percent (1.5%) per annum of percentages of the net considerations, as defined in subdivision (a)(1)(B), prior to such time, decreased by the sum of:  Any prior withdrawals from or partial surrenders of the contract accumulated at a rate of interest of one and one half percent (1.5%) per annum; and   The amount of any indebtedness to the company on the contract, including interest due and accrued;      and increased by any existing additional amounts credited by the company to the contract;    The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount not less than zero (0) and shall be equal to the corresponding gross considerations credited to the contract during that contract year, less an annual contract charge of thirty dollars ($30.00), and less a collection charge of one dollar and twenty-five cents ($1.25), per consideration credited to the contract during that contract year. The percentages of net considerations shall be sixty-five percent (65%) of the net consideration for the first contract year and eighty-seven and one half percent (87.5%) of the net considerations for the second and later contract years. Notwithstanding the preceding sentence, the percentage shall be sixty-five percent (65%) of the portion of the total net consideration for any renewal contract year that exceeds by not more than two (2) times the sum of those portions of the net considerations in all prior years for which the percentage was sixty-five percent (65%);     With respect to contracts providing for fixed scheduled considerations, minimum nonforfeiture amounts shall be calculated on the assumption that considerations are paid annually in advance and shall be defined as for contracts with flexible considerations that are paid annually with two (2) exceptions:  The portion of the net consideration for the first contract year to be accumulated shall be the sum of sixty-five percent (65%) of the net consideration for the first contract year plus twenty-two and one half percent (22.5%) of the excess of the net consideration for the first contract year over the lesser of the net considerations for the second and third contract years; and   The annual contract charge shall be the lesser of:   Thirty dollars ($30.00); or   Ten percent (10%) of the gross annual consideration; and       With respect to contracts providing for a single consideration, minimum nonforfeiture amounts shall be defined as for contracts with flexible considerations, except that the percentage of net consideration used to determine the minimum nonforfeiture amount shall be equal to ninety percent (90%) and the net consideration shall be the gross consideration less a contract charge of seventy-five dollars ($75.00).     The minimum values as specified in this chapter in  56-36-105  56-36-108 and 56-36-110 of any paid-up annuity, cash surrender or death benefits available under an annuity contract shall be based upon minimum nonforfeiture amounts as defined in this subsection (b).   The minimum nonforfeiture amount at any time at or prior to the commencement of any annuity payments shall be equal to an accumulation up to such time at rates of interest as indicated in subdivision (b)(2) of the net considerations, as defined in this section, paid prior to such time, decreased by the sum of subdivisions (b)(1)(A)(i)-(iv):   Any prior withdrawals from or partial surrenders of the contract accumulated at rates of interest as indicated in subdivision (b)(2);   An annual contract charge of fifty dollars ($50.00), accumulated at rates of interest as indicated in subdivision (b)(2);   Any premium tax paid by the company for the contract, accumulated at rates of interest as indicated in subdivision (b)(2); and   The amount of any indebtedness to the company on the contract, including interest due and accrued; and     The net considerations for a given contract year used to define the minimum nonforfeiture amount shall be an amount equal to eighty-seven and one half percent (87.5%) of the gross considerations credited to the contract during that contract year.     The interest rate used in determining minimum nonforfeiture amounts shall be an annual rate of interest determined as the lesser of three percent (3%) per annum and the following, which shall be specified in the contract if the interest rate will be reset:  The five-year constant maturity treasury rate reported by the federal reserve as of a date, or average over a period, rounded to the nearest one-twentieth of one percent (0.05%), specified in the contract no longer than fifteen (15) months prior to the contract issue date or redetermination date under subdivision (b)(2)(D);   Reduced by one hundred twenty-five (125) basis points;   Where the resulting interest rate is not less than one percent (1%); and   The interest rate shall apply for an initial period and may be redetermined for additional periods. The redetermination date, basis and period, if any, shall be stated in the contract. The basis is the date or average over a specified period that produces the value of the five-year constant maturity treasury rate to be used at each redetermination date.     During the period or term that a contract provides substantive participation in an equity indexed benefit, it may increase the reduction described in subdivision (b)(2)(B) by up to an additional one hundred (100) basis points to reflect the value of the equity index benefit. The present value at the contract issue date, and at each redetermination date thereafter, of the additional reduction shall not exceed the market value of the benefit. The commissioner may require a demonstration that the present value of the additional reduction does not exceed the market value of the benefit. Lacking such a demonstration that is acceptable to the commissioner, the commissioner may disallow or limit the additional reduction.   The commissioner may adopt rules and regulations, in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to implement subdivision (b)(3) and to provide for further adjustments to the calculation of minimum nonforfeiture amounts for contracts that provide substantive participation in an equity index benefit and for other contracts that the commissioner determines adjustments are justified.     
 Any paid-up annuity benefit available under a contract shall be such that its present value on the date annuity payments are to commence is at least equal to the minimum nonforfeiture amount on that date. The present value shall be computed using the mortality table, if any, and the interest rate specified in the contract for determining the minimum paid-up annuity benefits guaranteed in the contract.  
 For contracts that provide cash surrender benefits, the cash surrender benefits available prior to maturity shall not be less than the present value as of the date of surrender of that portion of the maturity value of the paid-up annuity benefit that would be provided under the contract at maturity arising from considerations paid prior to the time of cash surrender, reduced by the amount appropriate to reflect any prior withdrawals from or partial surrenders of the contract, the present value being calculated on the basis of an interest rate not more than one percent (1%) higher than the interest rate specified in the contract for accumulating the net considerations to determine the maturity value, decreased by the amount of any indebtedness to the company on the contract, including interest due and accrued, and increased by any existing additional amounts credited by the company to the contract. In no event shall any cash surrender benefit be less than the minimum nonforfeiture amount at that time. The death benefit under the contracts shall be at least equal to the cash surrender benefit.  
 For contracts which do not provide cash surrender benefits, the present value of any paid-up annuity benefit available as a nonforfeiture option at any time prior to maturity shall not be less than the present value of that portion of the maturity value of the paid-up annuity benefit provided under the contract arising from considerations paid prior to the time the contract is surrendered in exchange for, or changed to, a deferred paid-up annuity, the present value being calculated for the period prior to the maturity date on the basis of the interest rate specified in the contract for accumulating the net considerations to determine the maturity value, and increased by any existing additional amounts credited by the company to the contract. For contracts that do not provide any death benefits prior to the commencement of any annuity payments, the present values shall be calculated on the basis of the interest rate and the mortality table specified in the contract for determining the maturity value of the paid-up annuity benefit. However, in no event shall the present value of a paid-up annuity benefit be less than the minimum nonforfeiture amount at that time.  
 For the purpose of determining the benefits calculated under  56-36-106 and 56-36-107, in the case of annuity contracts under which an election may be made to have annuity payments commenced at optional maturity dates, the maturity date shall be deemed to be the latest date for which election shall be permitted by the contract, but shall not be deemed to be later than the anniversary of the contract next following the annuitant's seventieth birthday or the tenth anniversary of the contract, whichever is later.  
 Any contract that does not provide cash surrender benefits or does not provide death benefits at least equal to the minimum nonforfeiture amount prior to the commencement of any annuity payments shall include a statement in a prominent place in the contract that the benefits are not provided.  
 Any paid-up annuity, cash surrender or death benefits available at any time, other than on the contract anniversary under any contract with fixed scheduled considerations, shall be calculated with allowance for the lapse of time and the payment of any scheduled considerations beyond the beginning of the contract year in which cessation of payment of considerations under the contract occurs.  
 For any contract that provides, within the same contract by rider or supplemental contract provisions, both annuity benefits and life insurance benefits that are in excess of the greater of cash surrender benefits or a return of the gross considerations with interest, the minimum nonforfeiture benefits shall be equal to the sum of the minimum nonforfeiture benefits for the annuity portion and the minimum nonforfeiture benefits, if any, for the life insurance portion computed as if each portion were a separate contract. Notwithstanding  56-36-105  56-36-108 and 56-36-110, additional benefits payable:   In the event of total and permanent disability;   As reversionary annuity or deferred reversionary annuity benefits; or   As other policy benefits additional to life insurance, endowment and annuity benefits, and considerations for the additional benefits;  shall be disregarded in ascertaining the minimum nonforfeiture amount, paid-up annuity, cash surrender and death benefits that may be required by this chapter. The inclusion of the additional benefits shall not be required in any paid-up benefits, unless the additional benefits separately would require minimum nonforfeiture amounts, paid-up annuity cash surrender and death benefits.    
 After March 13, 1978, any company may file with the commissioner a written notice of its election to comply with this chapter after a specified date, which shall be the operative date of this chapter for the company, and this chapter shall become operative with respect to annuity contracts thereafter issued by the company. If a company makes no election, the operative date of this chapter for the company shall be March 13, 1980, and until the operative date the company shall continue to be governed by  56-7-112.  
 The commissioner may adopt rules and regulations, in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to implement this chapter.  
 This chapter shall be known and may be cited as the Premium Finance Company Act of 1980.  
 As used in this chapter, unless the context otherwise requires:   Commissioner means the commissioner of financial institutions;   Licensee means a premium finance company holding a license issued under this chapter;   Person means an individual, partnership, association, business corporation, nonprofit corporation, common law trust, joint-stock company or any other group of individuals however organized;   Premium finance agreement means an agreement by which an insured or prospective insured promises to pay to a premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent or producing agent in payment of premiums of an insurance contract, together with interest and a service charge as authorized and limited by this chapter;   Premium finance company means a person engaged in the business of entering into premium finance agreements or acquiring premium finance agreements from other premium finance companies; and   Premiums financed means any interest assigned pursuant to a premium finance agreement or other assignment in or relating to an insurance policy or contract of insurance, to the extent of the rights retained by an assignor or assignee of that policy or contract of insurance for the refund of premiums and related charges paid.   
  No person shall engage in the business of a premium finance company in this state without first having obtained a license as a premium finance company from the commissioner.    Licenses issued pursuant to this chapter expire on December 31. A license may be renewed for the ensuing twelve-month period upon application by the license holder showing continued compliance with the requirements of this section and payment of the nonrefundable supervision fee, as provided in  45-1-118(i). The supervision fee is applicable to each location. A licensee making timely and complete application for renewal of its license may continue to operate under its existing license until its application is approved or denied. The completed renewal application and the payment of the annual supervision fee must be sent to the department on or before December 31, but no earlier than November 1, of each year.   A licensee submitting a renewal application pursuant to this chapter for a license expiring on March 31, 2019, must pay the supervision fee as provided in  45-1-118(i) for each location. The completed renewal application and payment must be sent to the department on or before March 1, 2019. A renewed license issued under this chapter with a beginning effective date of April 1, 2019, expires on December 31, 2019.     The commissioner has the authority, at any time, to require the applicant to disclose fully the identity of all stockholders, partners, officers, and employees, and has discretion to refuse to issue or renew a license in the name of any firm, partnership or corporation if not satisfied that any officer, employee, stockholder or partner thereof who may materially influence the applicant's conduct meets the standards of this chapter.   The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this chapter. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   The commissioner may employ persons as necessary to examine or investigate and make reports on alleged violations of this chapter or compliance with the other provisions of this chapter. The costs for an examination or investigation of licensees shall be assessed pursuant to  45-1-118(i). An unlicensed person subject to the licensing requirements of this chapter, who is examined or investigated in accordance with this chapter, shall pay to the commissioner the reasonable and actual expenses of the investigation or examination.   The commissioner may establish a biennial license arrangement for the filing of the application for licensure renewal, but in no case shall the supervision fee be payable for more than one (1) year at a time.   
  Upon the filing of an application and the payment of the nonrefundable supervision fee, as provided in  45-1-118(i), the commissioner shall make an investigation of each applicant and shall issue a license if the applicant is qualified in accordance with this chapter. If the commissioner does not so find, the commissioner shall, at the request of the applicant, give the applicant a full hearing in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   The commissioner shall issue or renew a license, as may be applied for, when the commissioner is satisfied that the person to be licensed:  Is competent and trustworthy and intends to act in good faith in the capacity involved by the license for which the person applied;   Has a good business reputation and has had experience, training or education so as to be qualified in the business for which the license is required; and   If a corporation, is a corporation incorporated under the laws of this state or a foreign corporation authorized to transact business in this state.     
  The commissioner may revoke or suspend the license of any premium finance company when after investigation the commissioner finds that:  The license issued to the company was obtained by fraud;   There was any misrepresentation in the application for the license;   The holder of the license has otherwise proven untrustworthy or incompetent to act as a premium finance company; or   The company has violated any of the provisions of this chapter.     Before the commissioner revokes, suspends or refuses to renew the license of any premium finance company, the aggrieved person shall be entitled to a hearing in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. In lieu of revoking or suspending the license for any of the causes enumerated in this section, after hearing as herein provided, the commissioner may subject the company to a penalty of not more than two hundred dollars ($200) for each offense when the commissioner finds that the public interest would not be harmed by the continued operation of the company. The amount of the penalty shall be paid by the company to the commissioner.   If the commissioner refuses to issue to any person a license as a premium finance company, or revokes, suspends or refuses to renew the license of any premium finance company, or imposes a penalty on the company, after a hearing as provided under subsection (b), the applicant or licensee may appeal from the refusal to issue a license or from the adjudication in accordance with the Uniform Administrative Procedures Act.   
  Every licensee shall maintain corporate and accounting records, including complete records of its premium finance transactions, and the records shall be open to examination and investigation by the commissioner. The commissioner may at any time during regular business hours examine the records at any location at which the records are maintained.   Every licensee shall preserve its records of the premium finance transactions, including cards used in a card system, if any, for at least two (2) years after making the final entry in respect to any premium finance agreement. The preservation of records in photographic, microfilm or microfiche form shall constitute compliance with this requirement.   
  A premium finance agreement shall:  Be dated and signed by the insured or on behalf of the insured by a power of attorney, and its printed portion shall be in at least eight-point type;   Contain the name and place of business of the insurance agent negotiating the related insurance contract, the name and residence or the place of business of the insured as specified by the insured, the name and place of business of the premium finance company to which payments are to be made, a brief description of the insurance contracts involved and the amount of the premium; and   Set forth the following items where applicable:  The total amount of the premiums;   The amount of the down payment;   The principal balance (the difference between subdivisions (a)(3)(A) and (B));   The amount of the interest;   The balance payable by the insured (sum of subdivisions (a)(3)(C) and (D)); and   The number of installments required, the amount of each installment expressed in dollars, and the due date or period of the installments.       The items set out in subdivision (a)(3) need not be stated in the sequence or order in which they appear in subdivision (a)(3), and additional items may be included to explain the computations made in determining the amount to be paid by the insured. Compliance with the federal Truth In Lending Act (15 U.S.C.  1601 et seq.), will satisfy disclosure requirements of this section.   
  A premium finance company shall not charge, or contract for an interest charge, other than as permitted by this chapter.   The interest is to be computed on the balance of the premiums due, after subtracting the down payment made by the insured in accordance with the premium finance agreement, from the effective date of the insurance contract, for which the premiums are being advanced, to and including the date when the final installment of the premium finance agreement is payable.   The maximum effective rate of interest under this chapter shall:  Be determined in accordance with the actuarial method;   In the case of precomputed interest, be calculated and determined as of the effective date of the insurance contract on the assumption that all scheduled payments will be made as contracted; and   Not be affected by the prepayment of the loan, in whole or in part.     The maximum effective rate of interest per annum under this chapter shall not exceed twenty-four percent (24%) per annum.   The term of a loan for the purposes of this section commences on the effective date of the insurance contract for which the premium is being advanced. Differences in the lengths of months are disregarded and, for any period less than a month, each day may be counted as one thirtieth (1/30) of a month.   Notwithstanding any premium finance agreement, any insured may prepay the obligation in full at any time. In this event, the insured shall receive a refund credit, which refund credit shall represent at least as great a proportion of the interest as the sum of the periodic balances after the month in which prepayment is made bears to the sum of all periodic balances under the schedules of installments in the agreement. Where the amount of the refund credit is less than one dollar ($1.00), no refund need be made.   
 No licensee under this chapter has the power to charge premium loan charges other than, or in amounts greater than, the following:   Licensees may charge, in the case of the precomputed loan, a service charge in an amount equal to four percent (4%) of the total amount of the loan, which charge may be deducted in advance from the principal of the premium loan; provided, that a licensee who contracts for the payment of interest on the balances from time to time outstanding, commonly referred to as a revolving or open-end account, shall be limited to contracting for a service charge not to exceed fifteen dollars ($15.00) and payable no more frequently than once per calendar year per premium loan account. This service charge shall be in lieu of all other compensation for services, expenses, detriments or commitments directly incident to the loan, except those charges that are otherwise specifically provided in this chapter. This charge is authorized and limited on the basis that it is generally reasonably related to the total costs and expenses that it is designed to cover, and in order to make the amount of the charges more certain and readily ascertainable by the registrants, their borrowers and the commissioner, and to that end registrants shall not be required to maintain detailed records with respect to the services, expenses, detriments or commitments covered thereby. This charge shall not, however, be imposed on that portion of a loan used to pay any existing loan or part thereof owing by the same borrower or spouse or both to the same licensee or any affiliated lender.    A premium finance agreement may provide for the payment by the insured of a delinquency charge of two dollars ($2.00) to a maximum of five percent (5%) of the delinquent installment on any installment, which is in default for a period of ten (10) days or more; provided, that the charge shall not be collected more than once for the same delinquency.   If the default results in the cancellation of any insurance contract listed in the agreement, the agreement may provide for the payment by the insured of a cancellation charge of five dollars ($5.00).     A premium finance agreement may provide for payment of collection costs, attorney's fees equal to fifteen percent (15%) of the outstanding indebtedness and any other charges that arose because one (1) party breached the contract.   None of the charges referred to in this section shall be considered directly or indirectly in determining whether a violation of the usury laws has occurred under a premium finance agreement.   
  When a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract or contracts listed in the agreement, the insurance contract or contracts shall not be cancelled by the premium finance company unless the cancellation is effectuated in accordance with this section.   Not less than ten (10) days' written notice shall be mailed to the insured, at the insured's last known address as shown on the records of the premium finance company, of the intent of the premium finance company to cancel the insurance contract unless the default is cured within the ten-day period; provided, that if a default results from the refusal of a bank to honor a loan repayment check, the default shall be treated as a request of the insured for cancellation and the premium finance company shall not be required to provide an additional ten (10) days' written notice to the insured.   After expiration of the ten-day period, the premium finance company may thereafter cancel the insurance contract or contracts by mailing to the insurer a notice of cancellation. The insurance contract shall be cancelled as if the notice of cancellation had been submitted by the insured, but without requiring the return of the insurance contract or contracts. The premium finance company shall also mail a notice of cancellation to the insured at the insured's last known address as shown on the records of the premium finance company.   All statutory, regulatory and contractual restrictions providing that the insurance contract may not be cancelled unless notice is given to a governmental agency, mortgagee or other third party shall apply where cancellation is effected under this section. The insurer shall give the prescribed notice on behalf of itself or the insured to any governmental agency, mortgagee or other third party on or before the second business day after the day it receives the notice of cancellation, taking into consideration the number of days' notice required to complete the cancellation.   
  Whenever a financed insurance contract is cancelled, the insurer shall return whatever gross unearned premiums are due under the insurance contract directly to the premium finance company for the account of the insured or insureds as soon as reasonably possible, but in no event shall the period for payment exceed thirty (30) days after the effective date of cancellation. In the event that the crediting of return premiums to the account of the insured results in a surplus over the amount due from the insured, the premium finance company shall refund the excess to the insured within thirty (30) days; provided, that no refund shall be required if it amounts to less than one dollar ($1.00). Failure by the insurer to remit the unearned premium to the finance company, as required by this subsection (a), shall make the insurer liable for any interest or finance fees that are assessed against the policyholder as a result of the failure to timely remit unearned premiums after the required period to remit the refund.   When cancellation of a financed insurance contract is requested by the premium finance company, the insurance company shall base the refund of the unearned premiums on a pro rata basis.   
  A premium finance company, seller, building or savings and loan association, bank, trust company, industrial loan and thrift company or credit union authorized to do business in this state that finances insurance premiums, shall be deemed to have a perfected assignment and security interest in any premiums financed if the buyer or borrower signs a written agreement assigning a security interest in the premiums financed to the premium finance company, seller, seller's assignee, or lender. No filing or other recordation of the premium finance agreement or financing statement shall be necessary to perfect the validity of the agreement as a valid assignment and secured transaction as against creditors, subsequent purchasers, pledgees, encumbrancers, trustees in bankruptcy or any other insolvency proceeding under any law, or anyone having the status or power of the aforementioned or their successors or assigns.   Title 47, chapter 9, shall govern the relative priorities of security interests in, and any right of set-off against, funds advanced pursuant to a premium finance agreement or cash proceeds of a premium financed.   
 Any premium finance company that willfully and knowingly violates the provisions of any section of this chapter commits a Class C misdemeanor.  
 This chapter does not apply to:   The financing of insurance premiums by any seller who sells goods or services pursuant to an installment sale contract wherein a time price differential is charged, or to any building or savings and loan association, bank, trust company, industrial loan and thrift company or credit union authorized to do business in this state, which finances insurance premiums incidental to other extensions of credit;   Any insurance company, association or exchange authorized to do business in this state that solely finances the insurance premiums for the insurance policies it issues or a subsidiary of an authorized insurer admitted in this state or a corporation under substantially the same management or control as an admitted insurer or group of insurers, where the subsidiary, managed or controlled company is engaged in the business of financing insurance premiums on policies issued only by its parent insurer or affiliated group of insurers; and   Any insurance agent or producing agent licensed to do business in this state who finances premiums on policies solely written by the agent or producing agent.   
 This chapter is reenacted in its entirety as amended by Acts 1981, ch. 414, and shall continue to be entitled the Premium Finance Company Act of 1980.  
  In addition to any other powers imposed upon the commissioner by law, the commissioner is authorized to require persons subject to this chapter to be licensed through a multi-state automated licensing system. Pursuant to this authority, the commissioner may:  Promulgate any rules reasonably necessary for participation in, transition to, or operation of a multi-state automated licensing system;   Establish relationships or enter into agreements reasonably necessary for participation in, transition to, or operation of a multi-state automated licensing system. The agreements may include, but are not limited to, operating agreements, information sharing agreements, interstate cooperative agreements, and technology licensing agreements;   Require that applications for licensing under this chapter and renewals of such licenses be filed with a multi-state automated licensing system;   Require that any fees required to be paid under this chapter be paid through a multi-state automated licensing system;   Establish deadlines for transitioning licenses to a multi-state automated licensing system. The commissioner may deny any applications or renewal applications not filed with a multi-state automated licensing system after the deadlines have passed, notwithstanding any other deadlines established in this chapter. The commissioner shall provide reasonable notice of any transition deadlines to licensees; and   Take such further actions as are reasonably necessary to give effect to this section.     Nothing in this section authorizes the commissioner to require a person who is not subject to this chapter to submit information to, or participate in, a multi-state automated licensing system.   Notwithstanding any other provision of this section, the commissioner retains full authority and discretion to license persons under this chapter and to enforce this chapter. Nothing in this section reduces or derogates that authority and discretion.   Applicants for and holders of licenses issued under this chapter must pay all costs associated with submitting an application or transitioning a license to a multi-state automated licensing system, as well as all costs associated with maintaining and renewing any license issued by the commissioner on a multi-state automated licensing system.   
 The commissioner is authorized to use a multi-state automated licensing system as an agent for channeling information, whether criminal or noncriminal in nature, and whether derived from or distributed to the United States department of justice, any other state or federal governmental agency, or any other source that the commissioner is authorized to request or distribute under this chapter.  
 In order to promote more effective regulation and reduce regulatory burden through supervisory information sharing:   The requirements under any federal or state law regarding the privacy or confidentiality of any information or material provided to a multi-state automated licensing system, and any privilege arising under federal or state law, including the rules of any federal or state court, with respect to such information or material, continue to apply to the information or material after it has been disclosed to a multi-state automated licensing system. The information or material may be shared with all state and federal regulatory officials with premium finance company oversight authority without the loss of privilege or confidentiality protections provided by federal or state law, including the protection available under  45-1-120;   For purposes of subdivision (1), the commissioner may enter into agreements or sharing agreements with other governmental agencies, the Conference of State Bank Supervisors, or other associations representing governmental agencies, as established by rule, regulation, or order of the commissioner;   Information or material that is subject to a privilege or confidentiality protection under subdivision (1) shall not be subject to:  Disclosure under any federal or state law governing disclosure to the public of information held by an officer or agency of the federal government or the respective state; or   Subpoena or discovery or admission into evidence in any private civil action or administrative process, unless the person to whom such information or material pertains, in the person's discretion, waives any applicable privilege held by a multi-state automated licensing system, in whole or in part;     This section supersedes any inconsistent provisions of title 10, chapter 7, part 5, pertaining to the records open to public inspection; and   This section does not apply with respect to information or material relating to publicly adjudicated disciplinary and enforcement actions against persons subject to this chapter that is included in a multi-state automated licensing system for access by the public.   
  The commissioner shall collect and pay into the state treasury the following nonrefundable fees:  For receiving and reviewing each new application for admission from every foreign or domestic insurance company, including application for eligibility of surplus lines insurers, captive insurance companies, protected cells of captive insurance companies, and incorporated protected cells of captive insurance companies, six hundred seventy-five dollars ($675);   For issuing each new certificate of authority to a company, foreign or domestic, including letter of notification of eligibility of surplus lines insurers, upon application for admission or eligibility, as the case may be, four hundred forty dollars ($440);   For annual review for determination of continuing eligibility of surplus lines insurers, two hundred seventy dollars ($270);   For each company's annual statement, five hundred fifteen dollars ($515);   For amendments to the company's certificate of authority, ninety dollars ($90.00);   For each seal of office, with certificate, seven dollars ($7.00);   For copies of any paper on file or deposit with the commissioner or the commissioner's office, fifty cents (50) per page;   For receiving and reviewing each change of business plan or change in ownership for a captive insurance company, four hundred dollars ($400); and   For receiving and reviewing each change of ownership for a protected cell of a captive insurance company or an incorporated protected cell of a captive insurance company, one hundred twenty-five dollars ($125).     This section shall apply to all insurance companies, including state and county mutual fire insurance companies, title insurance companies, associations, fraternal benefit societies, captive insurance companies and surplus lines insurers maintaining eligibility status, notwithstanding any law or statute under which companies, associations and societies may have been organized.   
  The fees for the valuation of life insurance policies, which are provided in  56-4-101, shall be collected for the use and benefit of the state and shall be held by the commissioner as expendable receipts, and the expense of operation of the department, including the salaries and traveling expenses of the actuaries employed pursuant to  56-1-207, shall be paid out of the fees collected. At the end of each fiscal year, any remaining funds after the payment of the expense of operation of the department shall be remitted to the state treasurer and become a part of the general fund.   The fees for receiving and reviewing each new application for admission and the annual fee for review of continuing eligibility of surplus lines insurers shall be collected for use and benefit of the state and shall be held by the commissioner as expendable receipts, and all salaries and traveling expenses of the personnel employed in the processing and review for admission or eligibility shall be paid out of such fees collected. At the end of each fiscal year, any remaining funds after payment of salaries and expenses of the personnel shall be remitted to the state treasurer and become a part of the general fund.   
 Any fraternal insurance societies or companies not subject to valuation fees as provided in  56-4-101 shall pay a per diem fee and the expense of the actuary on each annual valuation in the same manner that insurance companies are required to pay fees and expenses to the examiner assigned by the commissioner, and the per diem fees and expenses shall not exceed the maximum compensation provided for the actuaries in  56-1-207.  
 If the commissioner exacts or receives, either directly or indirectly, any sum of money from any insurance company doing business in this state other than the fees allowed by law, or willfully issues a fraudulent or false certificate of soundness to the company; or, directly or indirectly, receives any money or other valuable thing for doing or not doing any official act as commissioner, other than the fees allowed by law, the commissioner commits a Class E felony.  
  With respect to any revenues or receipts collected by the department, any other law to the contrary notwithstanding, the amounts determined to have been erroneously paid may be refunded by the procedure developed by the commissioner of finance and administration and approved by the comptroller of the treasury.   The procedure shall provide that no refund shall be made unless within three (3) years from December 31 of the year in which the erroneous payment was made, the refund is either requested by the claimant or made by the state on its own motion.   
 With regard to each insurer qualified to transact only the business of reinsuring credit life and credit accident and credit health insurance, the commissioner shall collect a nonrefundable annual regulatory fee of three thousand dollars ($3,000). One half (12) of the regulatory fee shall be collected on April 1, which, notwithstanding  56-1-501, shall also be the date on or before which the insurer's annual statement shall be filed, and the balance shall be collected on September 1 of each year, except that the initial regulatory fee collected shall be reduced pro rata to reflect the number of months during the year in which the certificate of authority has been in effect. The regulatory fees paid into the department under this section shall be held by the commissioner as expendable receipts for the purpose of administering chapter 7, part 9 of this title.  
  Every domestic or foreign insurance company writing life, fire, marine, fidelity, surety, casualty, liability, or other forms of insurance shall pay directly to the commissioner the taxes as provided for in this part.   As used in this part, insurance company means any insurance, fidelity or surety company, including any corporation, company, partnership, association, society, order, fraternal or otherwise, individual or aggregation of individuals engaging in, or proposing or attempting to engage in, any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships and corporations.   
 Sections 56-4-20156-4-218 do not apply to fraternal benefit associations and societies as defined in chapter 25 of this title, nor to those exempt from the provisions provided in  56-25-704.  
 The tax imposed by this part shall be for state purposes only, and no county or city shall be authorized to levy or collect a like tax.  
 As used in this part, gross premiums means maximum gross premiums as provided in the policy contracts, new and renewal, including policy or membership fees, whether paid in part or in whole by cash, automatic premium loans, dividends applied in any manner whatsoever, and without deduction or exclusion of dividends in any manner; but excluding premiums returned on cancelled policies, or on account of reduction in rates, or reductions in the amount insured or experience rating refunds on life insurance policies and disability insurance policies.  
    All insurance companies writing the forms of insurance enumerated in  56-4-201, except life insurance companies and fraternal benefit associations, orders or societies, and except insurance companies and self-insurers covered by  56-4-206 and 56-4-207, shall pay two and one half percent (2.5%) on gross premiums paid by or for policyholders residing in this state or on property located in this state. Domestic and foreign life insurance companies shall pay a tax equal to one and three fourths percent (1.75%) of gross premiums received from citizens of and residents of this state.   Any governmental agency operating as a self-insurer and contracts either for a percentage or a flat fee for the administration of its self-insurance plan with an insurance company shall not be obligated to pay the premium tax.     The taxes shall be reported and payable in an electronic format approved by the commissioner on a quarterly basis with payments being due on or before June 1, August 20, December 1, and March 1. The taxes shall be reported and payable on electronic return forms approved by the commissioner. Installments of the annual premium taxes due and payable for each quarter as described in this section shall be based on the estimated amount of gross premiums received during that prior calendar quarter. A final payment of tax due for the preceding calendar year shall be made at the time each insurance company files its March 1 return. The final payment shall be measured by the gross premium, as defined in  56-4-204, received by the respective companies during the calendar year immediately preceding. Any insurance company that fails to report and pay any installment of tax, promptly and correctly as provided by this section, or that estimates any installment of tax to be less than eighty percent (80%) of the amount finally shown to be due in any quarter, shall be subject to interest and penalty as provided in  56-4-216 for any underpayment of taxes due and payable for that quarter. Any insurance company paying, for each installment required in this section, twenty-five percent (25%) of the amount of the annual premium taxes reported on its annual return for the preceding year shall not be subject to any penalty or interest for the underpayment.   The minimum amount of tax payable by any company under this chapter for the privilege of transacting business for any calendar year shall be one hundred fifty dollars ($150).     For the purposes of this section only, domestic life insurance company means:  A life insurance company that maintains in Tennessee:  The offices of its president and secretary;   Its principal administrative and operating offices; and   Its books and records with regard to insurance transactions; or     An insurance company authorized only to transact the business of reinsuring credit life and credit accident and health insurance, if the insurance company otherwise meets the requirements of subdivision (b)(1), if and to the extent that the tax imposed in this part on gross premium receipts on credit life and credit accident and health insurance is allocated pursuant to the reinsurance agreement from the ceding insurer to the reinsuring insurer, and the agreements shall be effective to enable the reinsuring company to use the premium tax liability so allocated as a credit under  56-4-217; provided, that the ceding company may not use as a credit under  56-4-217 any tax liability allocated by the ceding company to the reinsuring company; and provided, further, that no allocation of premium tax liability as described in this part shall relieve the ceding company from responsibility for payment of the full premium tax and for the filing of sworn returns in accordance with this section.     From revenues generated by the premium tax on fire insurance levied by this section, a sum sufficient shall be earmarked for the payment of the pay supplement of six hundred dollars ($600) to eligible firefighters by the commission on firefighting personnel standards and education pursuant to title 4, chapter 24.   
 Every insurance company writing workers' compensation insurance under the Workers' Compensation Law, compiled in title 50, chapter 6, shall be subject to and pay a tax of four percent (4%) on gross premiums collected for workers' compensation insurance, plus a surcharge of four tenths of one percent (0.4%) on gross premiums, the surcharge to be earmarked for the administration of the Tennessee Occupational Safety and Health Act, compiled in title 50, chapter 3. This tax shall be paid at the same time and in the same manner as the tax levied upon insurance companies by  56-4-205; provided, that the surcharge of four tenths of one percent (0.4%) on the tax on workers' compensation insurance premiums levied by this section does not apply to any employer who employs ten (10) or fewer employees, unless the employer is in the business of construction or manufacturing.  
  If any employer covered by the Workers' Compensation Law, compiled in title 50, chapter 6, carries its own insurance as provided by that chapter, the employer shall pay to the commissioner four percent (4%) on the premium that the employer would be required to pay if the employer carried the full coverage insurance called for with licensed insurance companies; provided, that the tax so paid by any employer shall in no instance be less than five dollars ($5.00), and a surcharge of four tenths of one percent (0.4%) on the premium the employer would have been required to pay, the surcharge to be earmarked for the administration of the Tennessee Occupational Safety and Health Act, compiled in title 50, chapter 3. The tax shall be paid by the self-insurers to the commissioner on or before June 30 of each year. Any company or corporation electing to operate as a self-insurer and having been duly qualified as such subsequent to June 30 of any year shall pay the tax based on the estimated payroll for the balance of the year when the permit is issued; provided, that the surcharge of four tenths of one percent (0.4%) on the tax on workers' compensation insurance premiums levied by this section shall not apply to any employer who employs ten (10) or fewer employees, unless the employer is in the business of construction or manufacturing.   This section shall not apply to county or municipal governments.   
  In addition to the premium taxes levied by  56-4-205, all companies writing fire insurance and lines of business having fire coverages as a part of the risk rate shall pay three fourths of one percent (0.75%) on that portion of the premium applicable to the fire risk for the purpose of executing the fire marshal law.   For the purpose of subsection (a), the following portions of the amounts required to be reported by line of business in the annual statement required by  56-1-501 shall be considered premiums for insurance covering the peril of fire:  Fire lines, one hundred percent (100%);   Farmowners and homeowners multiple peril, fifty-five percent (55%);   Commercial multiple peril, fifty percent (50%);   Inland marine, twenty percent (20%);   Automobile physical damage, eight percent (8%); and   Aircraft physical damage, eight percent (8%).     This tax shall be paid at the same time and in the same manner as the tax levied upon insurance companies by  56-4-205.   
  As used in this chapter, Tennessee securities means real estate owned by an insurance company described in subdivision (b)(1) in this state; bonds of the state of Tennessee; bonds or interest- bearing warrants of any county, city, town, school district, municipality or subdivision thereof which is now or may hereafter be constituted and authorized to issue bonds or warrants under the constitution and laws of this state; notes or bonds secured by mortgage or trust deed on property in this state, including those insured by the federal housing administration, the farm home administration, the federal government or any branch agency, department or bureau thereof; the cash deposits in regular established national or state banks or trust companies in this state, and other short-term investments, on the basis of average daily balances throughout the preceding calendar year; and any other property or security in Tennessee or issued by Tennessee corporations in which by law such insurance company may invest its funds.    Any insurance company writing the forms of insurance enumerated in  56-4-201, except life insurance companies, fraternal benefit associations, orders or societies, health and accident insurance companies, life and accident insurance companies and nonprofit group hospital service plans, meeting the conditions set forth in this section, shall be entitled to a reduction of or credit upon its gross premiums tax as provided under this part. Any company desiring to qualify for the credit or reduction shall report to the commissioner, on or before March 1 of each year, the amount that the company had invested on March 31, June 30, September 30, and December 31 of the year preceding in Tennessee securities, and the amount that it had invested on those dates in similar securities in the other state in which it had its highest percentage of admitted assets invested.   If the report of the insurance company shows that the company, as of March 31, June 30, September 30, and December 31 of the year preceding had invested in Tennessee securities, an amount that was not less than seventy percent (70%) nor more than eighty percent (80%) of the amount it had invested in similar securities in the other state in which it then had the highest percentage of its admitted assets invested, the insurance company's tax on its gross premiums shall be reduced by an amount equal to twenty-five percent (25%) of the tax.   If the report shows the insurance company had invested in the Tennessee securities on the date specified in subdivision (a)(1), an amount that was in excess of eighty percent (80%) but not more than ninety percent (90%) of the amount it had invested in similar securities in the other state in which it then had the highest percentage of its admitted assets invested, the company's tax on its gross premiums shall be reduced by an amount equal to fifty percent (50%) of the tax.   If the report shows the insurance company had invested in the Tennessee securities on the date specified in subdivision (a)(1), an amount that was in excess of ninety percent (90%) of the amount it had invested in similar securities in the other state in which it then had the highest percentage of its admitted assets invested, the company's tax on its gross premiums shall be reduced by an amount equal to seventy-five percent (75%) of the tax.   Subdivisions (b)(1)-(4) shall only be applicable to a company having investments, as shown by the report, in Tennessee securities equal to at least twenty-five percent (25%) of its total admitted assets, extended at each quarterly statement value.      For the purposes of this section, the securities of such insurance company invested in another state in which it then had the highest percentage of its admitted assets invested, as shown in the report, includes:  Bonds of the other state;   Bonds or interest bearing warrants of any county, city, town, school district, municipality or subdivision of any county, city, town, school district or municipality, valued at amortized or market value; notes or bonds secured by mortgage or trust deed on property in the other state, including those insured by the federal housing administration, the farm home administration, the federal government or any branch agency, department or bureau of the federal government, valued at unpaid principal;   The cash deposits in regular established national or state banks or trust companies, and other short-term investments, in such other state on the basis of average daily balances throughout the preceding calendar year; and   Any other property or security in such other state or issued by corporations domiciled in such other state in which by law such insurance company may invest its funds.     Values of the property or security listed in subdivision (c)(1) are to be valued at market value for purposes of determining the percentage of investment between investments in this state and investments in the other state with the highest percentage of admitted assets invested.     The reduction or credit provided by this section shall not be applicable with respect to the gross premium tax on premiums paid under policies of insurance directly or indirectly reinsured with any affiliate or affiliates of the company that is the direct writer of the policies, unless the affiliates that actually bear the risk of loss under the reinsurance arrangements would, if considered on a consolidated basis, qualify for the reduction or credit were the affiliates the direct writer.    If a workers' compensation self-insurance pool established in  50-6-405(c) invests in excess of eighty percent (80%) of its assets, as determined by generally accepted accounting principles, as of December 31 of the preceding year, in Tennessee securities, the workers' compensation self-insurance pools' taxes on its gross premiums shall be reduced by an amount equal to fifty percent (50%) for the current year.   A workers' compensation self-insurance pool desiring to qualify for the credit or reduction shall report to the commissioner on or before March 1 of each year, the amount the pool had invested as of December 31 of the year preceding with cash and short-term investments based on average daily balances.     As used in this section:  Affiliate means any insurance company that controls, is controlled by, or is under common control with the insurer writing the policies; and   Control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a company. Control is deemed to exist if any company, directly or indirectly, owns, controls, holds with power to vote, or holds proxies representing more than eighty percent (80%) of the voting securities of any other company.     
 The charge for valuation of life policies as contained in  56-4-101 shall be allowed as a credit against the premium taxes collected under this part whenever the charges are paid to the commissioner as provided by that section; provided, that no credit shall be allowed for any valuation fees paid prior to January 1, 1945.  
 The taxes imposed under this part shall be for the privilege of transacting business for each calendar quarter of each year but shall be measured by the gross premiums and consideration received by the respective companies during the quarter immediately preceding.  
  The payment of the taxes provided in this part shall be in lieu of all other taxes, except as provided in  56-4-217, except ad valorem taxes upon real and personal property, and except fees required by law of the companies.   Nothing in this section shall be construed to provide an exemption from the sales and use tax imposed by title 67, chapter 6.   
 Any insurance company ceasing for any cause to transact new business in this state shall continue to pay the taxes provided in this part in accordance with  56-4-215.  
  A foreign insurance company that takes out or renews a license to transact business in this state shall, upon the expiration of their license for any cause, or upon their ceasing to transact new business in this state, continue to pay the same tax upon its business remaining in force in this state, and in like manner and at like times as other duly licensed insurance companies of the same class are required to pay by any current law in force at that time.   Such foreign companies that fail to pay the taxes required of them by this section, within sixty (60) days after the taxes are due, shall be liable for a penalty of fifty percent (50%) in addition to the taxes, recoverable at law or in equity.   Compliance with this section shall be a condition upon which any foreign insurance company shall be authorized to obtain or renew a license, and the acceptance of these terms or conditions shall be conclusively presumed from the taking out or the renewing of the license.   
   Any foreign or domestic company failing and neglecting to make returns and payments promptly and correctly as provided by  56-4-205 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 company 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 and no penalty or interest may be waived.   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 company to file the premium tax returns and pay the tax imposed in this part, without penalty attached, but the tax shall bear interest as provided in subdivision (a)(1) from the date the amount was due.   For good cause shown, the commissioner may grant an exemption from the electronic reporting requirements of  56-4-205 and permit timely filings and payments by nonelectronic means upon application made in advance of the delinquency date.     Any company failing to pay the tax due plus penalty and interest for sixty (60) days beyond the due date shall 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 certificate of authority granted to the agent or agents for that company to transact business in the state.   Notwithstanding any other statutes of this state, no grace period for the filing of returns and payments shall be allowed.   A premium tax return and payment made to the department shall not be considered as paid on or before the due date unless the premium tax return and payment are received in the office of the commissioner, in the electronic manner approved by the commissioner, on or before the due date.   If an exemption is granted pursuant to subdivision (a)(3), a premium tax return and payment made to the department shall not be considered as paid on or before the due date unless:  The premium tax return and payment are received in the office of the commissioner on or before the due date;    The premium tax return and payment bear a post office cancellation mark stamped by the United States postal service on or before the due date, or are mailed by certified or registered mail, or have a certificate of mailing on or before the due date. A premium tax return and payment received by the department bearing a metered mail stamp and no post office cancellation mark stamped by the United States postal service shall be deemed filed and received on the date the premium tax return arrives at the department;   In the event a premium tax return and payment are mailed, but not received by the department, or received, and the cancellation mark is illegible or omitted, the return and payment shall be deemed filed and received, on the date they were mailed, if the sender establishes that the premium tax return and payment were deposited in the United States mail. In order to establish proof of mailing under these circumstances, a record authenticated by the United States postal service that the original mailing was sent registered mail, certified mail, or by certificate of mailing, shall be the only proof accepted by the department; or     The premium tax and payment are received in a manner established by the commissioner by rules. The rules may provide for the filing of premium tax returns and payments to be made through electronic means. The commissioner is also authorized to promulgate rules that provide for a convenience fee to cover the cost of accepting electronic premium tax returns and payments. Any fee set by rule under the authority of this subdivision (e)(3) 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 premium tax returns and payments.     
  The amount of the premium taxes collected under  56-4-201  56-4-214 shall be a single credit against the sum total of the taxes imposed by the Franchise Tax Law, compiled in title 67, chapter 4, part 21, and by the Excise Tax Law, compiled in title 67, chapter 4, part 20.   For tax years beginning on or after December 15, 2002, the excise tax imposed by title 67, chapter 4, part 20, and the franchise tax imposed by title 67, chapter 4, part 21, shall no longer be applicable to insurance companies, as defined in  56-1-102.   
  When, by the laws of any other state or foreign country, any premium or income or other taxes, or any fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions are imposed upon Tennessee insurance companies doing business in the other state or foreign country, or upon their agents in the other state or foreign country, that are in excess of the taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions imposed upon the insurance companies of the other state or foreign country doing business in this state, or that might seek to do business in this state, or upon their agents in the state, so long as the laws continue in force, the same premium or income or other taxes, or fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions and restrictions of whatever kind shall be imposed upon the companies of the other state or foreign country doing business in this state, or upon their agents in this state. The commissioner shall compute the burden of premium taxes on the basis of the basic premium tax rate levied by the laws of the other state or foreign country for the kind of business transacted without reduction in the basic premium rate for investments that a like Tennessee company may qualify for or as a result of investments the company may have made in Tennessee securities. Any tax, license or other obligation imposed by any city, county or other political subdivision of a state or foreign country on the Tennessee insurance companies shall be deemed to be imposed by the state or foreign country within the meaning of this section, and the commissioner, for the purpose of this section, shall compute the burden of the tax, license or other obligation on an aggregate statewide or foreign countrywide basis as an addition to the rate of tax and to the charges that are or would be payable by similar Tennessee insurance companies in the state or foreign country. This section shall be applied on a retaliatory basis without consideration of any reciprocity an insurance company domiciled in another state or foreign country may claim due to lower premium or income or other taxes, or lower fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions or restrictions that are imposed upon the insurance companies of other states or foreign countries doing business in this state. Each foreign insurance company doing business in this state shall furnish, over the signature and oath of its responsible officers, the necessary information for the computation of the taxes upon forms prescribed by the commissioner. The commissioner may issue any and all necessary regulations to carry out the purposes of this section. This section shall not apply to ad valorem taxes on real or personal property, to personal income taxes, or to any examination fees provided in  56-1-413.   The time, period and manner of payment of the retaliatory tax shall be the same in all cases as that of the gross premium tax provided for in  56-4-205, and no interest charges or credits shall be made or allowed for use or loss of use of funds due to any conflict of the time, period or manner of payment in this state and the time, period or manner in a foreign state or country.   Notwithstanding any other provision under this title, claims challenging liability imposed by this section must be brought in the chancery court of Davidson County pursuant to the procedures set out in title 67, chapter 1, part 9.   
  With respect to any revenues or receipts collected by the department, any other law to the contrary notwithstanding, the amounts determined to have been erroneously paid may be refunded by the procedure developed by the commissioner of finance and administration and approved by the comptroller of the treasury.   The procedure shall provide that no refund shall be made unless within three (3) years from December 31 of the year in which the erroneous payment was made the refund is either requested by the claimant or made by the state on its own motion. A refund of taxes that is based solely on a final court adjudication shall not be made to any person that is not either a party to the action or a party to another similar action brought pursuant to title 67, chapter 1, part 9. The decision of the appropriate state official with respect to any refund request shall be final and not subject to review in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
  The rate of taxation shall be zero (0) on all premiums or considerations under life insurance policies or annuity contracts issued in connection with any pension plan, annuity plan or profit-sharing plan qualified for federal income tax advantages under the Internal Revenue Code of 1954, part I, subchapter D, subtitle A (26 U.S.C.  401 et seq.), or to any trust qualified for income tax advantages under the Internal Revenue Code of 1954,  501(a) (26 U.S.C.  501(a)).   This section is declared to be remedial in nature and to that end shall apply to all such life insurance policies, annuity contracts or trusts occurring on or after January 1, 1988.   
  An in-state insurance company that has an insurance company affiliate may enter into reinsurance agreements with the affiliate, pursuant to which the tax imposed on gross premiums under  56-4-205 is allocated from the ceding company to the reinsuring company. The reinsurance agreements shall be effective to enable the reinsuring company to use the premium tax liability so allocated as a credit under  56-4-217; provided, that the ceding company may not use as a credit under  56-4-217 any tax liability allocated by the ceding company to the reinsuring company. No allocation of premium tax liability as described in this section shall relieve the ceding company from responsibility for payment of the full premium tax on insurance business written in this state and for the filing of sworn returns in accordance with this section. Nothing in this section shall result in a reduction of the premium tax and franchise and excise tax liability of the ceding company from that which would have been imposed in the absence of this section.   As used in this section:  In-state insurance company means an insurance company:  Having its principal place of business in this state; and   That does not transact insurance business in any other state; and     Insurance company affiliate means a corporation:  Authorized to conduct insurance business in this state after March 19, 1991;   That does not transact insurance business in any other state; and   Fifty percent (50%) or more of the voting stock of which is directly or indirectly controlled by, or under common control with, an in-state insurance company.       
  Every corporation, company, partnership, or individual writing, issuing, servicing and/or collecting installments on contracts now being written or issued or contracts heretofore written, issued and sold in this state, commonly known as income reserve contracts, installment investment trusts, including investors' syndicates, investment associations and the like, each of which is called an investment company in this part, or which corporation, company, partnership, or individual is engaged in servicing contracts now being issued or heretofore issued or collecting installments on the contracts, shall be deemed to be engaged in a business declared to be a privilege; and for the purpose of providing revenue for the state, there shall be levied against and collected from each investment company a special tax measured by gross profits or income, as defined in  56-4-305, of the investment company or that portion of the gross profits or income as shall be allocated to the state, as provided in this part.   Notwithstanding subsection (a), no tax under this part shall be imposed on any person registered as a broker or a dealer under  3(a)(4) or (5) of the Securities Exchange Act of 1934 (15 U.S.C.  78c(a)(4) or (a)(5)), regardless of any related or incidental activities carried on by the person in connection with its business as a broker or a dealer.   
  The business declared in this part to be a privilege is for state purposes only and taxable as a privilege by the state alone, and no county or municipality may impose any tax upon the privilege, or upon the privilege of conducting business or acting as agent or representative of any investment company, as defined in  56-4-301 and 56-4-303.    The tax provided in this part shall be in lieu of and substituted for any and all other taxes heretofore imposed by any law, general or special, against or on the investment companies, as defined in  56-4-301 and 56-4-303, except ad valorem taxes upon real estate and tangible personal property owned by the investment companies and located in the state.   The exemption from other taxes shall include all other privilege taxes, such as taxes upon or for the use of the franchise, capital, notes, reserves, surpluses, loans, accounts and other income and profits of the investment companies. The members, shareholders, account holders, certificate holders, or contract holders are exempt from any and all privilege taxes and income taxes imposed by any law now on the statute books, upon profits, dividends, interest or income in the nature of profits, dividends, or interest received from the investment company.     Nothing in this section shall be construed to provide an exemption from the sales and use tax imposed by title 67, chapter 6.   
  Each investment company issuing its certificates, investment contracts, income reserve contracts, or instruments of like nature, pursuant to applications or orders for certificates, investment contracts, income reserve contracts, or instruments of like nature, solicited within the state, shall be deemed to be engaged in business within the state, and shall be subject to the terms and provisions of this part.   Each investment company issuing certificates, investment contracts, income reserve contracts, or instruments of like nature that are delivered in the state shall be deemed to be engaged in business within the state, and shall be subject to the terms and provisions of this part.   Each investment company engaged in the business of writing, issuing and/or servicing or collecting installments upon the investment contracts, being issued in this state or heretofore issued, shall be subject to the terms and provisions of this part.   
  Each investment company, as defined in  56-4-301 and 56-4-303, shall pay annually to the commissioner of revenue the tax provided under this part, which tax shall be measured as to each investment company engaged in business wholly within this state, by the entire gross profits or income of the investment company during the year for which the tax is payable; and as to each investment company engaged in business or operating partly within and partly without the state, the tax shall be measured by the portion of the gross profits or income of the investment company allocated to the state, as provided in  56-4-306.   The tax as to each investment company engaged in business or operating wholly within the state shall be an amount equivalent to two percent (2%) of the aggregate or total of the gross profits or income of the investment company, and as to each investment company engaged in business or operating partly within and partly without the state, the tax shall be an amount equivalent to two percent (2%) of the portion of the aggregate or total of the gross profits or income of the investment company allocated to this state, as provided in  56-4-306.   
  Gross profits or income, as used in this part, means gross income from all sources, except as provided in subsection (b), including income on tax exempt securities, loans, dividends and interest on stocks, bonds or other investments, plus net rentals on real estate, less the net amount of tax paid by the investment company on its tangible assets wherever located; provided, that there shall not be included in gross profits or income any principal of loans, any premiums, service fees, or receipts from members, certificate holders or contract holders, other than interest on contract loans; and provided, further, that there shall not be included in gross profits or income interest earned but uncollected that is not more than ninety (90) days past due, and interest that is more than ninety (90) days past due shall likewise not be included in gross profits or income, unless the interest more than ninety (90) days past due has been capitalized.   Nothing in this part shall be construed so as to include among the gross profits or income, exempt-interest dividends from a regulated investment company qualified under the Internal Revenue Code, subchapter M, chapter 1, subtitle A (26 U.S.C.  851-858); provided, that not less than seventy-five percent (75%) of the value of the investments of the regulated investment company shall be in bonds of the state, or any county or municipality or political subdivision thereof, including any agency, board, authority or commission of any of the above.   
 The portion of the gross profits or income of the investment company to be allocated to the state where the investment company is engaged in business or operating partly within and partly without the state shall be the proportion of the gross profits or income of the investment company determined by dividing the gross amount received, during the year for which the tax is payable, from members, certificate holders or contract holders of the investment company who reside within the state, by the gross amount received during the year from all the members, certificate holders or contract holders, as the case may be, of the investment company, whether the members, certificate holders or contract holders reside within or without this state.  
  An annual report shall be filed with the commissioner on or before the first day of the fourth month following the close of the investment company's fiscal year.   The close of the investment company's fiscal year for purposes of this part shall coincide with the close of the investment company's fiscal year for federal income tax purposes.   The annual return shall be sworn and shall be made on forms prepared and furnished by the commissioner showing the total or aggregate gross income or profits as defined in  56-4-305, and showing appropriate figures necessary to determine what portion of gross profits or income shall be allocated to the state.   
  The commissioner is vested with the following powers:  To examine at the expense of the investment company, subject to this part, the books and records, for the purpose of determining the amount of taxes due, in the event of the failure of the investment company to make its return or for the purpose of verifying or correcting any return made; and   To issue distress warrants for the collection of any tax due and unpaid, or to institute suit in the courts of law or chancery, for the use and benefit of the state.     Upon the failure or refusal of any investment company subject to this part to file a return or upon the filing of a false return, the investment company shall thereafter be estopped to dispute the accuracy of the assessment made by the commissioner.   
 The net amount of all taxes collected under this part shall be payable by the commissioner to the state treasurer, and shall become part of the general funds of the state.  
 As used in this part, unless the context otherwise requires, production credit association means a corporation organized and chartered pursuant to  20 of the Farm Credit Act of 1933, Act June 16, 1933, ch. 98,  20, 48 Stat. 259, engaged in business in this state, and not exempt by virtue of the laws of the United States from taxation by this state.  
  The business declared to be taxable in this part is for state purposes only and taxable by the state alone and no county or municipality may impose any taxes upon the business, except ad valorem taxes upon real estate and tangible personal property owned by the production credit association.   The tax shall be in lieu of, and in substitution for, any and all other taxes levied against or on the association, except ad valorem taxes upon real estate and tangible personal property owned by the association.   Nothing in this section shall be construed to provide an exemption from the sales and use tax imposed by title 67, chapter 6.   
  Each production credit association shall pay annually to the commissioner of revenue the specified privilege tax provided under this part, which tax is to be measured by the income of the association, and shall be computed at the rate of three and three fourths percent (3.75%) of the net receipts of the association.    Net receipts shall be computed on an accrual basis and are defined to be the gross receipts from the following sources:  Interest on loans;   Loan service fees;   Interest on securities unless by law otherwise tax exempt;   Compensation or fees or services performed;   Capital gains from the sale of real and personal property; and   Other receipts; LESS      Patronage refunds; and   All expenses of the association, which expenses shall include, in addition to the usual and normal expenses of operation:   (a)  Bad debts charged off; or  (i)  (a)  Bad debts charged off; or   Annual additions for valuation reserves against loan assets in an amount equal to one half of one percent (0.5%) of the loans outstanding at the end of the fiscal year, to the extent that earnings in the year in excess of other operating expenses permit, until the reserves are equal to, but are not in excess of, three and one half percent (3.5%) of loans outstanding at the end of the fiscal year, whichever sum is greater;     Interest paid or accrued;   Legal recording and abstract fees;   Depreciation on capital assets;   Federal, county and city taxes paid or accrued;   Operating expenses on acquired property;   Capital losses; and   Other ordinary and necessary items of expense.         
  The annual tax to be levied and collected under this part shall be levied as of December 31 in each and every year, and shall be due and payable by not later than March 1 in each and every year.   On or before March 1 in each and every year, each association shall make a sworn return to the commissioner, showing the taxable income of the association, as defined in  56-4-402.   
  The commissioner is vested with the following powers:  To examine the books and records of the production credit association for the purpose of determining the amount of taxes due, in the event of the failure of the association to make its return or for the purpose of verifying or correcting any return made; and   To issue distress warrants for the collection of any taxes due and unpaid or to institute suit in the courts of law or chancery, for the use and benefit of the state; and     Upon the failure or refusal of any association to file a return, or upon the filing of a false and fraudulent return, the association shall thereafter be estopped to dispute the accuracy of the assessment made by the commissioner.   
 The net amount of all taxes collected under this part shall be payable by the commissioner to the state treasurer, and shall become part of the general funds of the state.  
  Each plan that purchases a contract of insurance that provides for indemnification of claims made by plan participants, except in the event of a catastrophic loss, shall register annually with the department of commerce and insurance, in the manner and on forms prescribed by the department.   Catastrophic loss, as used in this section, means any contract of insurance that provides for indemnification of claims made by plan participants in the amount of twenty-five thousand dollars ($25,000) or more per individual participant or an accumulated loss in any one (1) plan contract year in the amount of and over one hundred fifty thousand dollars ($150,000) for the employee plan.   
  The registration requirements of this chapter include, but are not limited to:  The employer's name and insurance federal employer identification number;   The total number of employees covered by the employee welfare benefit plan;   The size of the insurance reserve fund under the plan;   An attached copy of insurance benefits provided to employees and their dependents under the plan; and   An attached copy of any indemnity supplemental insurance that insures the plan benefits, with disclosure of the point at which the indemnity insurance begins coverage of those plan benefits.     Registrations shall be filed and received in the office of the department of commerce and insurance no later than twelve o'clock (12:00) midnight of January 31 of each year.   
 The information registered and reported in accordance with  56-40-102 shall be accurate as of the date of registration.  
 Any plan that violates this chapter shall be subject to a fine and/or a civil penalty of not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) for each violation. Each year that a plan fails to register in accordance with this chapter constitutes a separate violation.  
 The department shall promulgate necessary and appropriate rules and regulations pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to implement the effect and intent of this chapter.  
 As used in this chapter, unless the context otherwise requires:   Association means the Tennessee property and casualty insurance association; and   Insurance means property insurance as defined in  56-2-201, and casualty insurance as defined in  56-2-201, except for:  Hazardous waste or environmental impairment insurance; and   Any kind of insurance that is available through the Tennessee automobile insurance plan or any other existing residual market mechanism as defined in chapter 5 of this title.     
 If the commissioner of commerce and insurance finds after a hearing that, in any part of this state, property and casualty insurance is not readily available in the voluntary market and that the public interest requires its availability, the commissioner may authorize formation of a voluntary risk sharing or market assistance plan under  56-41-111.  
  If, after public hearing, the commissioner finds that the voluntary risk sharing or market assistance plan has failed, or that no plan has been established, to restore availability of the needed insurance coverages, the commissioner may establish the Tennessee property and casualty insurance association as an unincorporated association. The purpose of the association shall be to provide a market for certain kinds of property and casualty insurance on a self-supported basis without subsidy from other kinds of insurance.   The association shall perform its functions under a plan of operation approved by the commissioner. The plan of operation shall:  Give consideration to the need for adequate and readily accessible coverage, to alternative methods of improving the market affected, to the preferences of insurers and agents, to the inherent limitations of the insurance mechanism, to the need for reasonable underwriting standards, and to the requirement of reasonable loss prevention measures;   Establish procedures that will create minimum interference with voluntary markets;   Spread the burden imposed by the association equitably and efficiently within the insurance industry; and   Establish procedures for applicants and participants to have grievances reviewed by an impartial body.     
  The administrative powers of the association are vested in a board of directors, approved by the commissioner, consisting of seven (7) members who shall be elected and votes shall be cast and counted on a weighted basis in accordance with the premiums written of each member insurer. In addition, there shall be appointed by the commissioner two (2) members who shall be licensed agents or a representative of an agent's association.   Members of the board of directors may be reimbursed from the assets of the association for expenses incurred by them as members of the board of directors and for reasonable and equitable compensation as may be prescribed by the terms of the plan of operation.   The board of directors shall submit to the commissioner a plan of operation for the association and make suitable or necessary amendments to the plan to assure the fair, reasonable and equitable administration of the association. The plan of operation shall become effective upon the commissioner's approval in writing. The commissioner has the authority to modify or amend the plan.   If the association fails to submit a plan of operation within a reasonable period of time, or if at any time thereafter the association fails to submit amendments to the plan of operation, the commissioner, after a public hearing, may promulgate a plan of operation that is, in the commissioner's discretion, necessary or advisable to effectuate this title.   
  The plan of operation shall require participation by all insurers licensed in Tennessee and transacting direct insurance of the type covered by the specific plan, and all agents appointed to represent the  insurers in this state for the specified types of business, except that the commissioner may exclude classes of persons for administrative convenience or because it is not equitable or practicable to require them to participate in the plan. Type of insurance means personal or commercial property and casualty coverage as defined in this title.   The plan may provide for optional participation by insurers not required to participate under subsection (a).   
  The plan of operation shall specify the basis of participation of insurers and agents and the conditions under which risks must be accepted.   Every participating insurer and agent shall provide to any person seeking coverage:  The kinds available under the plan of operation; and   The services prescribed in the plan of operation, including full information on the requirements and procedures for obtaining coverage under the plan of operation, assuming coverage cannot be placed in the voluntary market.     
  The plan of operation shall provide for the method of underwriting and classifying risks, making and filing rates, adjusting and processing claims, and any other insurance or investment function that is necessary for the purpose of providing essential insurance coverage.   All policies issued by the association shall be subject to a nonprofit group retrospective rating plan to be approved by the commissioner, under which the final premium for all policyholders of the association, as a group, will be equal to the administrative expenses, loss and loss adjustment expenses, plus a reasonable allowance for contingencies and servicing. Policyholders shall be given full credit for all investment income, net of expenses and a reasonable management fee on policyholder supplied funds. Any additional premium resulting from a retrospective adjustment will first be collected from the stabilization fund set forth in  56-41-108. If these funds are insufficient to pay the entire amount due, the balance will be recouped through surcharges upon policyholders in accordance with a procedure approved by the commissioner.   In providing for the recoupment of deficits that may be incurred by the association, an option shall be offered to an insured each policy year to pay a capital stabilization charge that shall not exceed one hundred percent (100%) of the premium charged to the insurer in that year. The commissioner shall determine the amount of the charge from the appropriate factors of loss experience and risks associated with the plan of operation and the insurer. An insured who pays the stabilization charge shall not be required to pay any assessment to recoup a deficit in the plan incurred in any policy year for which the charge is paid. The plan of operation shall provide for the return to the insured so much of the insured's payment as remains after all actual or potential liabilities under the policy have been discharged.   
  There is created a stabilization reserve fund, to be administered in accordance with procedures submitted by the association and approved by the commissioner.   Each policyholder shall pay to the association a stabilization reserve fund charge equal to one half (12) of each premium due for insurance issued by the association until the fund reaches a level deemed appropriate by the commissioner. The means of payment shall be set forth in the plan of operation and shall be separately stated in the policy. The association shall cancel the policy of any policyholder who fails to pay the stabilization reserve fund charge.   The moneys held in trust shall be used solely for the purpose of discharging when due any retrospective premium charges payable by policyholders of the association under the group retrospective rating plan authorized by this chapter. Payment of retrospective premium charges shall be made by the board of directors upon certification to the board by the association of the amount due.   Any moneys remaining in the fund after all the retrospective premium charges have been paid shall be returned to policyholders under procedures authorized by the board of directors.   
  The association has, for the purposes of this section and to the extent approved by the commissioner, the general powers and authority granted under the laws of this state to insurers authorized to transact property and casualty insurance as defined in  56-41-101.   The association shall take any action to make available necessary property and casualty insurance, including, but not limited to:  Assessing participating insurers amounts necessary to pay the obligations of the association, administrative expenses, the cost of examinations and other expenses authorized by this title. The assessment of each member insurer for the type of insurance designated in the plan shall be in the proportion that the net direct written premiums of the member insurer for the preceding calendar year bear to the net direct written premiums of all member insurers for the preceding calendar year. However, the basis for participation shall exclude those premiums that are used for participation ratios in other existing residual market mechanisms. A member insurer may not be assessed in any one (1) year an amount greater than five percent (5%) of the member insurer's direct written premiums for the preceding calendar year. Each member insurer shall be allowed a premium tax credit at the rate of twenty percent (20%) per year for five (5) successive years following termination of the association;   Entering into contracts necessary or proper to carry out the purposes of this chapter;   Suing or being sued, including taking any legal action necessary to recover any assessments for, on behalf of, or against member insurers;   Investigating claims brought against the association and adjusting, compromising, settling, and paying covered claims to the extent of the association's obligation and deny all other claims. The association may process claims through its employees or through one (1) or more member insurers or other persons designated as servicing facilities. Designation of a service facility is subject to approval of the commissioner;   Classifying risks as may be applicable and equitable;   Establishing appropriate rates, rate classifications, and rate adjustments, and filing the  rates with the commissioner in accordance with this chapter;   Pooling risks among member insurers;   Issuing and marketing, through agents, policies of insurance providing coverage required by this chapter in its own name or on behalf of the member insurers;   Administering separate pools, separate accounts, or other plans as may be deemed appropriate for separate insurers or groups of insurers;   Investing, reinvesting, and administering all funds and moneys held by the association;   Developing, effectuating, and promulgating any loss prevention programs intended to serve the best interests of the association and the insuring public;   Operating and administering any combination of plans, pools, or other arrangements as deemed appropriate to best accomplish the fair and equitable operation of the association for the purposes of making available commercial insurance coverage; and   Any other action necessary or proper to effectuate the purposes of this chapter.     
  The association shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions, except taxes levied on real or personal property and as excepted in subsection (b).   Premium taxes shall apply to premiums received for insurance placed through the association.   
 Insurers doing business in this state are authorized to prepare voluntary risk sharing or market assistance plans providing any specific kind, line or class of insurance coverage, or subdivision or combination of any specific kind, line or class of insurance coverage, for all or any part of the state in which the insurance is not readily available in the voluntary market and that the public interest requires to be available. Voluntary risk sharing or market assistance plans shall be submitted to the commissioner and may be put into operation only with the commissioner's approval. If the commissioner finds that a voluntary risk sharing or market assistance plan would sufficiently provide essential insurance coverage, the commissioner may authorize formulation of the  plans in lieu of establishing the association.  
 All obligations and duties arising under the plan of operation and under policies issued by the association shall remain in full force and effect during their terms.  
 There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner, or any of the commissioner's staff, the association or its directors, agents or employees, or against any participating insurer because of any statements made or actions taken in good faith in connection with any inspections, examinations, hearings, reports, and communications concerning the operation of this association.  
 The commissioner shall make an examination as may be required into the affairs of any organization set up under this agreement at least once every five (5) years. The examination shall be conducted and the report filed in the manner prescribed for insurance companies in this title. The expenses of the examination shall be paid by the organization established under this chapter in the manner prescribed by this title.  
 This chapter shall be known and may be cited as the Long-Term Care Insurance Act.  
  The purpose of this chapter is to promote the public interest, to promote the availability of long-term care insurance policies, to protect applicants for long-term care insurance, as defined, from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, to facilitate public understanding and comparison of long-term care insurance policies and to facilitate flexibility and innovation in the development of long-term care insurance coverage.   The requirements of this chapter apply to policies delivered or issued for delivery in this state on or after July 1, 2008. This chapter is not intended to supersede the obligations of entities subject to this chapter to comply with the substance of other applicable insurance laws insofar as they do not conflict with this chapter, except that laws and regulations designed and intended to apply to medicare supplement insurance policies shall not be applied to long-term care insurance.   
 As used in this chapter, unless the context otherwise requires:   Applicant means:  In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and   In the case of a group long-term care insurance policy, the proposed certificate holder;     Certificate means any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this state;   Commissioner means the commissioner of commerce and insurance;   Group long-term care insurance means a long-term care insurance policy that is delivered or issued for delivery in this state and issued to:  One (1) or more employers or labor organizations, or to a trust or to the trustees of a fund established by one (1) or more employers or labor organizations, or a combination thereof, for employees or former employees, or a combination of employees or former employees, or for members or former members, or a combination of members or former members, of the labor organizations;   Any professional, trade or occupational association for its members or former or retired members, or combination of former or retired members, if the association:   Is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation; and   Has been maintained in good faith for purposes other than obtaining insurance;       An association or a trust or the trustee or trustees of a fund established, created or maintained for the benefit of members of one (1) or more associations. Prior to advertising, marketing or offering the policy within this state, the association or associations, or the insurer of the association or associations, shall file evidence with the commissioner that the association or associations have at the outset a minimum of one hundred (100) persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least one (1) year and have a constitution and bylaws that provide that:        The association or associations hold regular meetings not less than annually to further purposes of the members;   Except for credit unions, the association or associations collect dues or solicit contributions from members; and   The members have voting privileges and representation on the governing board and committees;    Thirty (30) days after the filing, the association or associations will be deemed to satisfy the organizational requirements, unless the commissioner makes a finding that the association or associations do not satisfy those organizational requirements; or   A group other than as described in subdivisions (4)(A)-(C), subject to a finding by the commissioner that:   The issuance of the group policy is not contrary to the best interest of the public;   The issuance of the group policy would result in economies of acquisition or administration; and   The benefits are reasonable in relation to the premiums charged;   Long-term care insurance means any insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than twelve (12) consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis, for one (1) or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital. Long-term care insurance includes group and individual annuities and life insurance policies or riders that provide directly or supplement long-term care insurance. Long-term care insurance also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. Long-term care insurance includes group and individual policies or riders whether issued by insurers, fraternal benefit societies, nonprofit health, hospital, and medical service corporations, prepaid health plans, health maintenance organizations or any similar organization. Long-term care insurance does not include any insurance policy that is offered primarily to provide basic medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage;   Policy means any policy, contract, subscriber agreement, rider or endorsement delivered or issued for delivery in this state by an insurer, fraternal benefit society, nonprofit health, hospital or medical service corporation, prepaid health plan, health maintenance organization or any similar organization; and   (A)  Qualified long-term care insurance contract or federally tax-qualified long-term care insurance contract means an individual or group insurance contract that meets the requirements of  7702(b) of the Internal Revenue Code of 1986 (26 U.S.C.  7702(b)), as follows:   The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subdivision (7)(A)(i) by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;   The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVII of the Social Security Act (42 U.S.C.  1391 et seq.), or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subdivision (7)(A)(ii) do not apply to expenses that are reimbursable under Title XVII of the Social Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this subdivision (7)(A)(ii) by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;   The contract is guaranteed renewable, within the meaning of  7702B(b)(1)(C) of the Internal Revenue Code of 1986 (26 U.S.C  7702B(b)(1)(C));   The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in subdivision (7)(A)(v);   All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and   The contract meets the consumer protection provisions set forth in  7702B(g) of the Internal Revenue Code of 1986 (26 U.S.C  7702B(g)).   Qualified long-term care insurance contract or federally tax-qualified long term care insurance contract also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of  7702B(b) and (e) of the Internal Revenue Code of 1986 (26 U.S.C  7702B(b) and (e)).  
 No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described in  56-42-103(4)(D), unless this state or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this state has made a determination that the requirements have been met.  
  The commissioner shall adopt regulations that include standards for full and fair disclosure, setting forth the manner, content and required disclosures for the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions and definitions of terms.   No long-term care insurance policy may:  Be cancelled, nonrenewed or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder;   Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder;   Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care. This evaluation of the amount of coverage provided shall be based on aggregate days of care covered for lower levels of care when compared to days of care covered for skilled care; or   Require a policyholder to have received skilled care before coverage for intermediate care or custodial care begins.     Preexisting condition:  No long-term care insurance policy or certificate, other than a policy or certificate issued to a group as defined in  56-42-103(4)(A), (B) or (C), shall use a definition of preexisting condition that is more restrictive than the following: Preexisting condition means a condition for which medical advice or treatment was recommended by, or received from, a provider of health care services, within six (6) months preceding the effective date coverage of an insured person;   No long-term care insurance policy or certificate other than a policy or certificate issued to a group as defined in  56-42-103(4)(A), (B) or (C) may exclude coverage for a loss or confinement that is the result of a preexisting condition, unless the loss or confinement begins within six (6) months following the effective date of coverage of an insured person;   The commissioner may extend the limitation periods set forth in subdivisions (c)(1) and (2) as to specific age group categories in specific policy forms upon findings that the extension is in the best interest of the public; and   The definition of preexisting condition does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subdivision (c)(2) expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subdivision (c)(2).     Prior hospitalization/institutionalization:  No long-term care insurance policy may be delivered or issued for delivery in this state if the policy:  Conditions eligibility for any benefits on a prior hospitalization requirement;   Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or   Conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement.     A long-term care insurance policy containing any limitations or conditions for eligibility other than those prohibited in subdivision (d)(1) shall clearly label in a separate paragraph of the policy or certificate entitled Limitations or Conditions on Eligibility for Benefits the limitations or conditions, including any required number of days of confinement.  A long-term care insurance policy containing a benefit advertised, marketed or offered as a home health care or home care benefit may not condition receipt of benefits on a prior institutionalization requirement.   A long-term care insurance policy that conditions eligibility of noninstitutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than thirty (30) days from which benefits are paid.   No long-term care insurance policy or rider that provides benefits only following institutionalization shall condition the benefits upon admission to a facility for the same or related conditions within a period of less than thirty (30) days after discharge from the institution.       The commissioner may adopt regulations establishing loss ratio standards for long-term care insurance policies; provided, that a specific reference to long-term care insurance policies is contained in the regulation.   Right to return  free look:  Individual long-term care insurance policyholders have the right to return the policy within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. Individual long-term care insurance policies shall have a notice prominently printed on the first page of the policy, or attached to the policy, stating in substance that the policyholder shall have the right to return the policy within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. Upon return of the policy for cancellation, the company shall mail the premiums directly to the policyholder and shall not require the policyholder to meet with the agent to receive the refund; and   A person insured under a long-term care insurance policy issued pursuant to a direct response solicitation shall have the right to return the policy within thirty (30) days of its delivery and to have the premium refunded if, after examination, the insured person is not satisfied for any reason. Long-term care insurance policies issued pursuant to a direct response solicitation shall have a notice prominently printed on the first page, or attached to the first page, stating in substance that the insured person shall have the right to return the policy within thirty (30) days of its delivery and to have the premium refunded if, after examination, the insured person is not satisfied for any reason.     Outline of coverage:  An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose.   The commissioner shall prescribe a standard format, including style, arrangement and overall appearance and the content of an outline of coverage.    In the case of agent solicitations, an agent must deliver the outline of coverage prior to the presentation of an application or enrollment form.   In the case of direct response solicitations, the outline of coverage must be presented in conjunction with the application or enrollment form.   In the case of a policy issued to a group defined in  56-42-103(4)(A), an outline of coverage shall not be required to be delivered; provided, that the information described in subdivision (g)(4) is contained in other materials relating to enrollment. Upon request, these other materials shall be made available to the commissioner.     The outline of coverage shall include:  A description of the principal benefits and coverage provided in the policy;   A statement of the principal exclusions, reductions and limitations contained in the policy;   A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premiums. Continuation or conversion provisions of group coverage shall be specifically described;   A statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions;   A description of the terms under which the policy or certificate may be returned and premium refunded;   A brief description of the relationship of cost of care and benefits; and   A statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under  7702B(b) of the Internal Revenue Code of 1986 (26 U.S.C.  7702B(b)).       A certificate issued pursuant to a group long-term care insurance policy, which policy is delivered or issued for delivery in this state shall include:  A description of the principal benefits and coverage provided in the policy;   A statement of the principal exclusions, reductions and limitations contained in the policy; and   A statement that the group master policy determines governing contractual provisions.     If an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than thirty (30) days after the date of approval.   At the time of the policy delivery, a policy summary shall be delivered for an individual life insurance policy that provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, but regardless of request shall make delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:  An explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;   An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits, if any, for each covered person;   Any exclusions, reductions and limitations on benefits of long-term care;   A statement that no long-term care inflation protection option is available under the policy;   If applicable to the policy type, the summary shall also include:  A disclosure of the effects of exercising other rights under the policy;   A disclosure of guarantees related to long-term care costs of insurance charges; and   Current and projected maximum lifetime benefits; and     The provisions of the policy summary listed in subdivisions (j)(1)-(5) may be incorporated into a basic illustration, or into the life insurance policy summary, which is required to be delivered in accordance with rules promulgated by the commissioner.     Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. The report shall include:  Any long-term care benefits paid out during the month;   An explanation of any changes in the policy, e.g. death benefits or cash values, due to long-term care benefits being paid out; and   The amount of long-term care benefits existing or remaining.     If a claim under a long-term care insurance contract is denied, the issuer shall, within sixty (60) days of the date of a written request by the policyholder or certificate holder, or a representative of the policyholder or certificate holder:  Provide a written explanation of the reasons for the denial; and   Make available all information directly related to the denial.     Any policy or rider advertised, marketed or offered as long-term care or nursing home insurance shall comply with this chapter.   In addition to any other requirements under this chapter, the commissioner may require by rule that other information be given to the prospective applicant for long-term care insurance at the time of initial solicitation or thereafter.   
  For a policy or certificate that has been in force for less than six (6) months, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage.   For a policy or certificate that has been in force for at least six (6) months but less than two (2) years, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and that pertains to the condition for which benefits are sought.   After a policy or certificate has been in force for two (2) years, it is not contestable upon the grounds of misrepresentation alone. The policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.    A long-term care insurance policy or certificate may be field issued if the compensation to the field issuer is not based on the number of policies or certificates issued.   For purposes of subdivision (d)(1), field issued means a policy or certificate issued by a producer or a third-party administrator pursuant to the underwriting authority granted to the producer or third party administrator by an insurer and using the insurer's underwriting guidelines.     If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.   In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by  56-7-2307(3). In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care.   
  Except as provided in subsection (b), a long-term care insurance policy may not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate including a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy. In the event the policyholder or certificate holder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates.   When a group long-term care insurance policy is issued, the offer required in subsection (a) shall be made to the group policyholder; however, if the policy is issued as group long-term care insurance as defined in  56-42-103(4)(D), including a continuing care retirement community or other similar entity, the offering shall be made to each proposed certificate holder.   The commissioner shall promulgate regulations specifying the type or types of nonforfeiture benefits to be offered as part of long-term care insurance policies and certificates, the standards for nonforfeiture benefits, and the rules regarding contingent benefit upon lapse, including a determination of the specified period of time during which a contingent benefit upon lapse will be available and the substantial premium rate increase that triggers a contingent benefit upon lapse as described in subsection (a).   
   An individual may not sell, solicit or negotiate long-term care insurance unless the individual is licensed as an insurance producer for accident and health or sickness or life and has completed a one-time, eight-hour training course. A person currently authorized to sell long-term care insurance may continue to sell the long-term care insurance after July 1, 2008, as long as the person completes a one-time, eight-hour training course by or before July 1, 2009.   The training requirements of subsection (b) may be approved as continuing education courses under  56-6-107(c) and any rules promulgated under  56-6-107(c).      Continuing education, as established by rule, may be required of all licensed producers who sell, solicit or negotiate long-term care insurance; provided, that they are not otherwise exempt from continuing education pursuant to  56-6-107(c).   The training required under subdivision (b)(1) shall consist of topics related to long-term care insurance, long-term care services and, if applicable, qualified state long-term care insurance partnership programs, including, but not limited to:  State and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including medicaid;   Available long-term services and providers;   Changes or improvements in long-term care services or providers;   Alternatives to the purchase of private long-term care insurance;   The effect of inflation on benefits and the importance of inflation protection; and   Consumer suitability standards and guidelines.     The training required by this section shall not include training that is insurer or company product specific or that includes any sales or marketing information, materials or training, other than those required by state or federal law.      Insurers subject to this chapter shall:  Obtain verification that a producer receives training as required by subdivisions (a)(1) and (b)(1) prior to selling, soliciting or negotiating the insurer's long-term care insurance products;   Maintain a record of such verification subject to the state's record retention requirements; and   Make the record available to the commissioner upon request.     Insurers subject to this chapter shall maintain records with respect to the training of its producers concerning the distribution of its partnership policies that will allow the department to provide assurance to the state medicaid agency that producers have received the training contained in subdivision (b)(2)(A) as required by subdivision (a)(1), and that producers have demonstrated an understanding of the partnership policies and their relationship to public and private coverage of long-term care, including medicaid, in this state. These records shall be maintained in accordance with the state's record retention requirements and shall be made available to the commissioner upon request.     The satisfaction of these training requirements in any state shall be deemed to satisfy the training requirements in this state.   
 The commissioner shall issue reasonable regulations for the administration and enforcement of this chapter, including, but not limited to, rules to promote premium adequacy and to protect the policyholder in the event of substantial rate increases, and to establish minimum standards for producer education, marketing practices, producer compensation, producer testing, penalties and reporting practices for long-term care insurance.  
 In addition to any other penalties provided by the laws of this state, any insurer and any producer found to have violated any requirement of this state relating to the regulation of long-term care insurance or the marketing of long-term care insurance shall be subject to a civil penalty of up to three (3) times the amount of any commissions paid for each policy involved in the violation or up to ten thousand dollars ($10,000), whichever is greater.  
 This chapter shall be known and may be cited as the Tennessee Legal Insurance Act.  
 This chapter shall be interpreted liberally in order to:   Encourage the development of effective and economically sound methods for making legal services more readily available;   Protect the interests of the users of legal services and of the public of this state with a minimum of restrictions on experimentation with new forms of organization, administration, or benefits;   Seek to have the risk inherent in experimentation borne by the promoters of new plans rather than by the consumers;   Permit and encourage the providing of legal services through persons other than professional insurers subject to practical and reasonable financial and regulatory requirements;   Permit and encourage fair and effective competition among the various systems of financing legal services; and   Maintain a high level of quality and conformity to professional insurers subject to practical and reasonable financial and regulatory requirements.   
 As used in this chapter, unless the context otherwise requires:   Commissioner means the commissioner of commerce and insurance;   Contractual obligation in subdivision (4)(A) includes any arrangement in which those persons for whom services are to be provided under the arrangement have reasonable expectations of enforceable rights;   Insurer means any person who obtains a certificate of authority under this chapter;    Legal insurance means the assumption of a contractual obligation to provide specified legal services or reimbursement for legal expenses in consideration of a specified payment for an interval of time, regardless of whether the payment is made by the beneficiaries individually or by a third person for them, in such a manner that the total cost incurred by assuming the obligation is to be spread directly or indirectly among a group of persons;   Legal insurance does not include the provision of or reimbursement for legal services incidental to other insurance coverages; and   The following are not considered legal insurance under the insurance laws of this state:   Retainer contracts and contingent fee contracts made with individual clients with the fees based on estimates of the nature and amount of services that will be provided to the specific client and similar contracts made with a group of clients involved in the same or closely related legal matters, such as class actions;   Legal services provided by unions or employee associations to their members in matters relating to employment or occupation;   Legal services provided by an agency of the federal or state government or subdivision thereof to its employees; or   Services of a lawyer referral service operated, sponsored or approved by a bar association representative of the general bar of the geographical area in which the association exists; and       Person means any natural or artificial person including, but not limited to, an individual, partnership, association, trust or corporation.   
   No person may transact the business of legal insurance in this state without first obtaining a certificate of authority:  Under this chapter; or   Under the general laws pertaining to insurance.     Any person may apply to the commissioner for, and obtain, a certificate of authority to transact the business of legal insurance in compliance with this chapter. This section does not by itself enlarge the powers of any corporation given by its articles of incorporation or charter, but does authorize a corporation formed under the general business, insurance or general nonprofit corporation laws of this state to include in its powers the authority to transact legal insurance.   Any application shall be in a form prescribed by the commissioner. If the applicant is not domiciled in this state, the application must be accompanied by a power of attorney duly executed by the applicant appointing the commissioner, and duly authorized deputies, as the true and lawful attorneys of the applicant in and for this state, upon whom all lawful process in any legal action or proceeding against the applicant on a cause of action arising in this state may be served.     This chapter does not apply to any person issuing group, blanket or franchise policies if fewer than ten percent (10%) of the certificate holders or insureds reside in this state and the person is regulated to a comparable extent by another state in which a larger number of certificate holders or insureds reside.   
  Upon receipt of an application for a certificate of authority, the commissioner shall issue a certificate pursuant to this chapter upon payment of the application fee prescribed in  56-43-115, if the commissioner is satisfied that the following conditions are met:  The persons responsible for the conduct of the affairs of the applicant are competent, trustworthy and of good reputation;   The applicant demonstrates the willingness and ability to assure that the promised benefits can be provided. In making this determination, the commissioner shall consider so far as applicable:  The adequacy of capital and surplus considered in relation to the other items in this subsection (a);   Any agreement with lawyers for the provision of legal services;   The financial soundness of the applicant's arrangements for legal services and the schedule of rates proposed to be used in connection with the arrangements;   Any agreement with another person authorized under this chapter, an insurer licensed under the general insurance law to do business in this state to provide reinsurance, or an agency of the federal or state government for insuring the payment of the cost of legal services or the provision for automatic applicability of an alternative coverage in the event the insurer is unable to perform its obligations;   Any surety bond or deposit of cash or securities as a guarantee that the obligations will be duly performed; and   If the applicant is licensed as an insurer under other insurance laws, whether the applicant has complied with the requirements of those laws.       A certificate of authority shall be perpetual and shall continue in force unless there are grounds for suspension or revocation.   
   Each contractual obligation for legal insurance shall be evidenced by a policy or master policy. Legal insurance may be written on an individual, group, blanket or franchise basis. Each person insured under a group policy must be issued a certificate of coverage. No legal insurance policy or certificate of any kind may be issued or delivered in this state unless and until a copy of the form of the policy or certificate has been filed with the commissioner and approved.   The forms must meet the following requirements:  Policies must contain a detailed list and description of the legal services promised or the legal matters for which expenses are to be reimbursed and the amount of reimbursement;   Policies and certificates must indicate prominently the name of the insurer and the full address of its principal place of business; and   Certificates issued under group policies may summarize the terms of the master contract but must contain a full and clear statement of the benefits provided.     The commissioner may disapprove a form if it is found that it:  Does not meet the requirements of subdivision (a)(2);   Is unfair, unfairly discriminatory, misleading, obscure or encourages misrepresentation or misunderstanding of the contract, including cases where the form:   Provides coverage or benefits that are too restricted to achieve the purposes for which the policy is designed;   Fails to attain a reasonable degree of readability, simplicity and conciseness; or   Is misleading, deceptive or obscure because of its physical aspects, such as format, typography, style, color, material or organization;     Provides coverage or benefits or contains other provisions that would endanger the financial soundness of the insurer; or   Is contrary to law.        Rate filing or rate review requirements shall be the same as those for personal risk insurance in chapter 5, part 3 of this title.   The rates must meet the following requirements:  They must be established and justified in accordance with generally accepted insurance principles, including, but not limited to, the experience or judgment of the insurer making the rate filing or actuarial computations;   They may not be excessive, inadequate or unfairly discriminatory. Rates are not unfairly discriminatory because they are averaged broadly among persons insured under group, franchise or blanket policies; and   The commissioner may by written order suspend or modify the requirement of filing for any risk, group or class of risk, the rates for which cannot practically be filed before they are used.       If the commissioner determines that any form reviewed under subsection (a) and any schedule of rates reviewed under subsection (b) complies with the requirements of this section, the commissioner shall approve, within thirty (30) days, which may be extended for an additional thirty (30) days by notice in writing to the person making the filing prior to the expiration of the first thirty (30) days. If disapproving a filing, the commissioner shall notify the person making it in writing specifying the reasons for the disapproval. A hearing shall be granted within thirty (30) days after a request in writing by any person aggrieved by the decision of the commissioner. If the commissioner does not disapprove a form or schedule of rates within thirty (30) days of the filing or an extension of the form or schedule, it shall be deemed approved. The commissioner may, after notice and hearing, disapprove any rate that has been previously approved or deemed approved.   Any schedule of compensation paid either directly to lawyers or to beneficiaries as reimbursement of costs incurred for covered legal services shall be filed with the commissioner within thirty (30) days after its use.   The commissioner may require the submission of whatever relevant information is reasonably necessary in determining whether to approve or disapprove a filing made pursuant to subsection (a), (b) or (d).   
  No insurer may enter into any exclusive agency contract or management contract unless the contract is first filed with the commissioner and not disapproved under this section within thirty (30) days after filing, or a reasonable extended period as the commissioner may specify by notice within the thirty (30) days.   The commissioner shall disapprove a contract under subsection (a) if the commissioner finds that:  It subjects the insurer to excessive charges;   The contract extends for an unreasonable period of time;   The contract does not contain fair and adequate standards of performance;   The persons empowered under the contract to manage the insurer are not sufficiently trustworthy, competent, experienced and free from conflict of interest to manage the insurer with due regard for the interests of its insureds, creditors or the public; or   The contract contains provisions that impair the interests of the insurer's insureds or creditors of the public in this state.     
 An insurer shall annually, on or before March 1, file with the commissioner a report verified by at least two (2) principal officers. The report shall be on forms prescribed by the commissioner and shall include:   A financial statement of the insurer's legal insurance business including:  Its balance sheet; and   Its receipts and disbursements for the preceding year;     Any material changes in the information submitted pursuant to  56-43-105;   Such information about the number of persons protected and terminated as may be prescribed by the commissioner; and   Such other information relating to the performance of the insurer as is necessary to enable the commissioner to carry out the commissioner's duties under this chapter.   
  An insurer must maintain the reserves necessary for the sound operation of the business, including unearned premium reserves. The amount and manner of calculating these reserves shall be determined by rule by the commissioner in accordance with  56-43-112.   In establishing and enforcing reserve requirements, the commissioner shall prescribe and allow a reasonable phase-in period prior to mandating full compliance with the reserve requirements by any person transacting the business of legal insurance on January 1, 1990.   
 The investable funds generated through the transaction of the business of legal insurance by persons who are not licensed to transact other lines of insurance shall be invested in securities or other investments permitted by the laws of this state for the investment of assets of life insurance.  
  The Tennessee Consumer Protection Act, compiled in title 47, chapter 18, applies to persons transacting the business of legal insurance, except as is inconsistent with this chapter.   The Uniform Insurers Rehabilitation and Liquidation Act of this title, shall apply to a person transacting the business of legal insurance under this chapter.   Subject to this chapter,  56-2-107 and 56-2-111 apply to persons transacting the business of legal insurance.   The insurance law applies generally to legal insurance offered by insurers licensed to write other kinds of insurance; provided, that legal insurance sold by the insurers under a certificate of authority obtained under this chapter shall be regulated by   56-43-102  56-43-107, 56-43-112 and 56-43-116 instead of corresponding sections of the insurance code.    Orders or rules or regulations of the commissioner issued under this chapter shall be subject to the general insurance laws and/or the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, relating to hearings and appeals.   Except as otherwise provided in this chapter, the  general insurance law does not apply to insurers authorized under this chapter.     
  The commissioner may promulgate in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, reasonable rules as are necessary or proper to carry out this chapter.   The commissioner may, in accordance with subsection (a), promulgate reasonable rules and regulations to provide for the licensing of agents.   
  The commissioner shall make an examination of the affairs of any insurer as often as the commissioner deems it necessary for the protection of the interests of the people of this state.   The provisions concerning financial valuations and examinations of companies, compiled in chapter 1, part 4 of this title, apply to examinations conducted under this chapter.   
 The commissioner may suspend, revoke or refuse to renew any certificate of authority to a person transacting the business of legal insurance under this chapter pursuant to Chapters 1 2 and 8 of this title.  
 Every person subject to this chapter shall pay to the commissioner the fees required by chapter 4 of this title.  
 Legal insurance premiums are taxed at the rate of two and one half percent (2.5%).  
 All applications, filings, and reports required under this chapter shall be treated as public documents.  
 The penalty provisions set out in this title shall apply.  
 This chapter applies to all domestic, foreign and alien insurers who are authorized to transact business in this state.  
   Each domestic, foreign and alien insurer who is authorized to transact insurance in this state shall annually, on or before March l of each year, file with the National Association of Insurance Commissioners (NAIC), and pay the fee established by the NAIC for filing, reviewing or processing of the information, a copy of its annual statement convention blank, together with the additional filings as prescribed by the commissioner for the preceding year.   The information filed with the NAIC shall be in the same format and scope as that required by the commissioner of commerce and insurance and shall include the signed jurat page and the actuarial certification. Any amendments and addenda to the annual statement filing subsequently filed with the commissioner shall also be filed with the NAIC. Each insurer doing business in more than one (1) state, and any other insurers as required by the commissioner, shall also file with the NAIC annual and quarterly financial statement information in computer readable format as required by the insurance regulatory information system.     Foreign insurers that are domiciled in a state that has a law substantially similar to subsection (a) shall be deemed in compliance with this section.   
 In the absence of actual malice, members of the NAIC, their duly authorized committees, subcommittees and task forces, their delegates, NAIC employees and all others charged with the responsibility of collecting, reviewing, analyzing and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the commissioner under the authority of this chapter, and shall not be subject to civil liability for libel, slander or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required under this chapter.  
 The commissioner may suspend, revoke or refuse to renew the certificate of authority of any insurer failing to file its annual statement when due, or within any extension of time that the commissioner, for good cause, may have granted.  
 The purpose of this chapter is to regulate the formation and/or operation of risk retention groups and purchasing groups in this state formed pursuant to the federal Liability Risk Retention Act of 1986 (RRA 1986) (15 U.S.C.  3901 et seq.), to the extent permitted by such law.  
 As used in this chapter, unless the context otherwise requires:   Commissioner means the commissioner of commerce and insurance or the commissioner, director or superintendent of insurance in any other state;   Completed operations liability means liability arising out of the installation, maintenance, or repair of any product at a site that is not owned or controlled by:  Any person who performs that work; or   Any person who hires an independent contractor to perform that work, but includes liability for activities that are completed or abandoned before the date of the occurrence giving rise to the liability;     Domicile, for purposes of determining the state in which a purchasing group is domiciled, means:  For a corporation, the state in which the purchasing group is incorporated; and   For an unincorporated entity, the state of its principal place of business;     Hazardous financial condition means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able to:  Meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or   Pay other obligations in the normal course of business;     Insurance means primary insurance, excess insurance, reinsurance, surplus lines insurance and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state;   Liability:  Means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses,  because of injuries to other persons, damage to their property, or other damage or loss to other persons resulting from or arising out of:   Any business, whether profit or nonprofit, trade, product, services, including professional services, premises or operations; or   Any activity of any state or local government, or any agency or political subdivision of state or local government; and     Does not include personal risk liability and an employer's liability with respect to its employees other than legal liability under the federal Employers' Liability Act (45 U.S.C.  51 et seq.);     Personal risk liability means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from any personal, familial or household responsibilities or activities, rather than from responsibilities or activities referred to in subdivision (6);   Plan of operation or a feasibility study means an analysis that presents the expected activities and results of a risk retention group including, at a minimum:  Information sufficient to verify that its members are engaged in businesses or activities similar or related with respect to the liability to which the members are exposed by virtue of any related, similar or common business, trade, product, services, premises or operations;   For each state in which it intends to operate, the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer;   Historical and expected loss experience of the proposed members and national experience of similar exposures to the extent that this experience is reasonably available;   Pro forma financial statements and projections;   Appropriate opinions by a qualified, independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;   Identification of management, underwriting and claims procedures, marketing methods, managerial oversight methods, investment policies or reinsurance agreements;   Identification of each state in which the risk retention group has obtained, or sought to obtain, a charter and license, and a description of its status in each such state; and   Other matters that may be prescribed by the commissioner of the state in which the risk retention group is chartered for liability insurance companies authorized by the insurance laws of that state;     Product liability means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage, including damages resulting from the loss of use of property, arising out of the manufacture, design, importation, distribution, packaging, labeling, lease or sale of a product, but does not include the liability of any person for those damages if the product involved was in the possession of the person when the incident giving rise to the claim occurred;   Purchasing group means any group that:  Has as one (1) of its purposes the purchase of liability insurance on a group basis;   Purchases the insurance only for its group members and only to cover the group member's similar or related liability exposure, as described in subdivision (10)(C);   Is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, services, premises, or operations; and   Is domiciled in any state;     Risk retention group means any corporation or other limited liability association:  Whose primary activity consists of assuming and spreading all, or any portion, of the liability exposure of its group members;   That is organized for the primary purpose of conducting the activity described under subdivision (11)(A);   That:   Is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or   Before January l, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, had certified to the insurance commissioner of at least one (1) state that it satisfied the capitalization requirements of that state, except that the group shall be considered to be a risk retention group only if it has been engaged in business continuously since such date, and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability, as the terms were defined in the Product Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), before the date of the enactment of the Liability Risk Retention Act of 1986 (15 U.S.C.  3901 et seq.);     That does not exclude any person from membership in the group solely to provide for members of the group a competitive advantage over such a person;   That has:   As its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group; or   As its sole owner an organization that has as:        Its members only persons who comprise the membership of the risk retention group; and   Its owners only persons who comprise the membership of the risk retention group and who are provided insurance by the group;    Whose members are engaged in businesses or activities similar or related with respect to the liability of which the members are exposed by virtue of any related, similar or common business trade, product, services, premises or operations;   Whose activities do not include the provision of insurance other than:   Liability insurance for assuming and spreading all or any portion of the liability of its group members; and   Reinsurance with respect to the liability of any other risk retention group, or any members of the other group, that is engaged in businesses or activities so that the group or member meets the requirement described in subdivision (11)(F) from membership in the risk retention group that provides the reinsurance; and   The name of which includes the phrase Risk Retention Group; and   State means any state of the United States or the District of Columbia.  
  A risk retention group shall, pursuant to this chapter, be chartered and licensed to write only liability insurance pursuant to this chapter and, except as provided elsewhere in this chapter, must comply with all of the laws, rules, regulations and requirements applicable to the insurers chartered and licensed in this state and with  56-45-104, to the extent the requirements are not a limitation on laws, rules, regulations or requirements of this state.   Before it may offer insurance in any state, each risk retention group shall also submit for approval to the commissioner a plan of operation or feasibility study. The risk retention group shall submit an appropriate revision in the event of any subsequent material change in any item of the plan of operation or feasibility study, within ten (10) days of the change. The group shall not offer any additional kinds of liability insurance, in this state or in any other state, until a revision of the plan or study is approved by the commissioner.    At the time of filing its application for a charter, the risk retention group shall provide to the commissioner in summary form the following information:  The identity of the initial members of the group;   The identity of those individuals who organized the group or who will provide administrative services or otherwise influence or control the activities of the group;   The amount and nature of initial capitalization;   The coverages to be afforded; and   The states in which the group intends to operate.     Upon receipt of this information, the commissioner shall forward the information to the National Association of Insurance Commissioners.   Providing notification to the National Association of Insurance Commissioners is in addition to, and does not suffice as, satisfying the requirements of  56-45-104 or any other sections of this chapter.     Governance Standards For Risk Retention Groups.  Within one (1) year of April 7, 2016, existing risk retention groups shall ensure compliance with the following governance standards. Risk retention groups that are licensed on or after April 7, 2016, shall be in compliance with the following standards at the time of licensure:   The board of directors of the risk retention group shall have a majority of independent directors. If the risk retention group is a reciprocal, then the attorney-in-fact would be required to adhere to the same standards regarding independence of operation and governance as imposed on the risk retention group's board of directors/subscribers advisory committee under the standards set out in this subsection (d); and, to the extent permissible under state law, service providers of a reciprocal risk retention group should contract with the risk retention group and not the attorney-in-fact;   No director qualifies as independent unless the board of directors affirmatively determines that the director has no material relationship with the risk retention group. Each risk retention group shall disclose these determinations to its domestic regulator, at least annually. For purposes of this subdivision (d)(1)(B), any person who is a direct or indirect owner of or subscriber in the risk retention group (or is an officer, director, or employee of such an owner and insured, unless some other position of such officer, director, or employee constitutes a material relationship), as contemplated by 15 U.S.C.  3901(a)(4)(E)(ii) of the Liability Risk Retention Act, is considered to be independent;     Service Provider Contracts.  The term of any material service provider contract with the risk retention group shall not exceed five (5) years. Any such contract, or its renewal, shall require the approval of the majority of the risk retention group's independent directors. The risk retention group's board of directors shall have the right to terminate any service provider, audit or actuarial contract at any time for cause after providing adequate notice pursuant to the terms of the contract. The service provider contract is deemed material if the amount to be paid for such contract is greater than or equal to five percent (5%) of the risk retention group's annual gross written premium or two percent (2%) of its surplus, whichever is greater;   No service provider contract constituting a material relationship shall be entered into unless the risk retention group has notified the commissioner in writing of its intention to enter into such transaction at least thirty (30) days prior to entering into the proposed transaction and the commissioner has not disapproved it within such period;     Written Policy.  The risk retention group's board of directors shall adopt a written policy in the plan of operation as approved by the board that requires the board to:  Assure that all owner and insureds of the risk retention group receive evidence of ownership interest;   Develop a set of governance standards applicable to the risk retention group;   Oversee the evaluation of the risk retention group's management, including, but not limited to, the performance of the captive manager, managing general underwriter or other party or parties responsible for underwriting, determination of rates, collection of premium, adjusting or settling claims, or the preparation of financial statements;   Review and approve the amount to be paid to material service providers; and   Review and approve, at least annually:   The risk retention group's goals and objectives relevant to the compensation of officers and service providers;   The officers' and service providers' performance in accordance with those goals and objectives; and   The continued engagement of the officers and material service providers;       Audit Committee.  The risk retention group shall have an audit committee composed of at least three (3) independent board members. A non-independent board member may participate in the activities of the audit committee, if invited by the members, but cannot be a member of such committee;   The audit committee shall have a written charter that defines the committee's purpose, which, at a minimum, must be to:   Assist board oversight of the:  Integrity of the risk retention group's financial statements;   Compliance with legal and regulatory requirements; and   Qualifications, independence, and performance of the independent auditor and actuary;     Discuss the annual audited financial statements and quarterly financial statements with management;   Discuss the annual audited financial statements with the independent auditor and, if advisable, discuss quarterly financial statements with the independent auditor;   Discuss policies with respect to risk assessment and risk management;   Meet separately and periodically, either directly or through a designated representative of the committee, with management and independent auditors;   Review with the independent auditor any audit problems or difficulties and management's response;   Set clear hiring policies of the risk retention group regarding the hiring of employees or former employees of the independent auditor;   Require the external auditor to rotate the lead (or coordinating) audit partner having primary responsibility for the risk retention group's audit as well as the audit partner responsible for reviewing that audit so that neither individual performs audit services for a particular risk retention group for more than five (5) consecutive fiscal years; and   Report regularly to the board of directors;     The domestic regulator may waive the requirement to establish an audit committee composed of independent board members if the risk retention group is able to demonstrate to the domestic regulator that it is impracticable to do so and the risk retention group's board of directors itself is otherwise able to accomplish the purposes of an audit committee, as described in subdivision (d)(4)(B);     Governance Standards.  The board of directors shall adopt governance standards and shall make such standards available electronically, including, but not limited to, posting such information on the risk retention group's web site, or by other means, and provide such information to members/insureds upon request. Governance standards shall include:  The process by which the directors are elected by the owner and insureds;   Director qualification standards;   Director responsibilities;   Director access to management and, as necessary and appropriate, independent advisors;   Director compensation;   Director orientation and continuing education;   Management succession policies and procedures; and   The policies and procedures that are followed for annual performance evaluation of the board;     Business Conduct and Ethics.  The board of directors shall adopt and disclose a code of business conduct and ethics for directors, officers and employees and promptly disclose to the board of directors any waivers of the code for directors or executive officers. The code shall address the following topics:  Conflicts of interest;   Matters subject to the corporate opportunities doctrine under the group's state of domicile;   Confidentiality;   Fair dealing;   Protection and proper use of risk retention group assets;   Compliance with all applicable laws, rules, and regulations; and   Mandatory reporting of any illegal or unethical behavior which affects the operation of the risk retention group;     The captive manager, president, or chief executive officer of the risk retention group shall promptly notify the domestic regulator in writing if either becomes aware of any material noncompliance with any of these governance standards; and   For purposes of this subsection (d):  Board of directors or board means the governing body of the risk retention group elected by the owners and insureds to establish policy, elect or appoint officers and committees, and make other governing decisions;   Director means a natural person designated in the formation documents of the risk retention group, or designated, elected or appointed by any other manner, name or title to act as a director;   Material relationship includes, but is not limited to:   The receipt, in any twelve-month period, of compensation or payment of any other item of value by a person, a member of the person's immediate family or any business with which the person is affiliated from the risk retention group, or a consultant or service provider to the risk retention group that is greater than or equal to five percent (5%) of the risk retention group's gross written premium for such twelve-month period or two percent (2%) of its surplus, whichever is greater, as measured at the end of any fiscal quarter falling in such twelve-month period. Such person or the person's immediate family member shall not be independent until one (1) year after the person's compensation from the risk retention group falls below the threshold;   In regards to a relationship with an auditor, a director or an immediate family member of a director who is affiliated with or employed in a professional capacity by a present or former internal or external auditor of the risk retention group is not independent until one (1) year after the end of the affiliation, employment, or auditing relationship; or   In regards to a relationship with a related entity, a director or immediate family member of a director who is employed as an executive officer of another company where any of the risk retention group's present executives serve on that other company's board of directors is not independent until one (1) year after the end of such service or the employment relationship; and     Service providers includes captive managers, auditors, accountants, attorneys, actuaries, investment advisors, managing general underwriters or other parties responsible for underwriting, determination of rates, collection of premium, adjusting and settling claims, or the preparation of financial statements. Any reference to attorneys in this subdivision (d)(8)(D) does not include defense counsel retained by the risk retention group to defend claims, unless the amount of fees paid to such attorneys are material as referenced in subdivision (d)(8)(C).       
  Risk retention groups chartered and licensed in states other than this state, and seeking to do business as a risk retention group in this state, shall comply with the laws of this state as follows:  Before offering insurance in this state, a risk retention group shall submit to the commissioner:  A statement identifying the state or states in which the risk retention group is chartered and licensed as a liability insurance company, charter date, its principal place of business, and other information, including information on its membership, the commissioner may require to verify that the risk retention group is qualified under  56-45-102(11); and   A copy of its plan of operations or feasibility study and revisions of the plan or study submitted to the state in which the risk retention group is chartered and licensed; provided, that the provision relating to the submission of a plan of operation or feasibility study shall not apply with respect to any line or classification of liability insurance that was:   Defined in the Product Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), before October 27, 1986; and   Offered before October 27, 1986, by any risk retention group that had been chartered and operating for not less than three (3) years before that date;       The risk retention group shall submit a copy of any material revision to its plan of operation or feasibility study required by  56-45-103(b) within thirty (30) days of the date of the approval of such revision by the commissioner of its chartering state, or if no such approval is required, within thirty (30) days of the filing; and   A statement of registration, for which a filing fee shall be determined by the commissioner, that designates the commissioner as its agent for the purpose of receiving service of legal documents or process.     Any risk retention group doing business in this state shall submit to the commissioner:  A copy of the group's financial statement submitted to the state in which the risk retention group is chartered and licensed, which shall be certified by an independent public accountant and contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist under criteria established by the National Association of Insurance Commissioners;   A copy of each examination of the risk retention group as certified by the commissioner or public official conducting the examination;   Upon request by the commissioner, a copy of any information or document pertaining to any outside audit performed with respect to the risk retention group; and   Other information that may be required to verify its continuing qualification as a risk retention group under  56-45-102(11).      Each risk retention group is liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within this state, and shall report to the commissioner the net premiums written for risks resident or located within this state. The risk retention group is subject to taxation, and any applicable fines and penalties related to the taxation, on the same basis as a foreign admitted insurer.   To the extent licensed agents or brokers are utilized pursuant to  56-45-112, they shall report to the commissioner the premiums for direct business for risks resident or located within this state that the licensees have placed with, or on behalf of, a risk retention group not chartered in this state.   To the extent that insurance agents or brokers are utilized pursuant to  56-45-112, the agent or broker shall keep a complete and separate record of all policies procured from each such risk retention group, which record shall be open to examination by the commissioner upon request. These records shall, for each policy and each kind of insurance provided under the policy, include:  The limit of liability;   The time period covered;   The effective date;   The name of the risk retention group that issued the policy;   The gross premium charged; and   The amount of return premiums, if any.       Any risk retention group, its agents and representatives shall comply with the Unfair Claims Settlement Practices Act, compiled in  56-8-104.   Any risk retention group shall comply with  56-8-104, regarding deceptive, false or fraudulent acts or practices. If the commissioner seeks an injunction regarding the conduct, the injunction must be obtained from a court of competent jurisdiction.   Any risk retention group must submit to an examination by the commissioner to determine its financial condition, if the commissioner of the jurisdiction in which the group is chartered and licensed has not initiated an examination or does not initiate an examination within sixty (60) days after a request by the commissioner of commerce and insurance. The examination shall be coordinated to avoid unjustified repetition, and conducted in an expeditious manner and in accordance with the National Association of Insurance Commissioners (NAIC) examiner handbook.   Every application form for insurance from a risk retention group, and every policy, on its front and declaration pages, issued by a risk retention group, shall contain in ten (10) point type the following notice:  NOTICE   This policy is issued by your risk retention group. Your risk retention group may not be subject to all of the insurance laws and regulations of your state. State insurance insolvency guaranty funds are not available for your risk retention group.    The following acts by a risk retention group are prohibited:  The solicitation or sale of insurance by a risk retention group to any person who is not eligible for membership in the group; and   The solicitation or sale of insurance by, or operation of, a risk retention group that is in hazardous financial condition or financially impaired.     No risk retention group is allowed to do business in this state if an insurance company is directly or indirectly a member or owner of the risk retention group, other than in the case of a risk retention group all of whose members are insurance companies.   The terms of any insurance policy issued by any risk retention group shall not provide, or be construed to provide, coverage prohibited generally by statutes of this state or declared unlawful by the highest court of the state whose law applies to the policy.   A risk retention group not chartered in this state and doing business in this state shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state insurance commissioner if there has been a finding of financial impairment after an examination under subsection (f).   A risk retention group that violates this chapter will be subject to fines and penalties, including revocation of its right to do business in this state, applicable to licensed insurers generally.   
  No risk retention group is required or permitted to join or contribute financially to any insurance insolvency guaranty fund, or similar mechanism, in this state, nor shall any risk retention group, or its insureds or claimants against its insureds, receive any benefit from any such fund for claims arising under the insurance policies issued by the risk retention group.   When a purchasing group obtains insurance covering its members' risks from an insurer not authorized in this state or a risk retention group, the risks, wherever resident or located, shall not be covered by any insurance guaranty fund or similar mechanism in this state.   When a purchasing group obtains insurance covering its members' risks from an authorized insurer, only risks resident or located in this state shall be covered by the state guaranty fund subject to  56-12-111.   Notwithstanding  56-41-105 to the contrary, the commissioner may require a risk retention group to participate, or exempt a risk retention group from participation, in any mechanism established or authorized under the law of this state for the equitable apportionment among insurers of liability insurance losses and expenses incurred on policies written through the mechanism, and the risk retention group shall submit sufficient information to the commissioner to enable the commissioner to apportion on a nondiscriminatory basis the risk retention group's proportionate share of the losses and expenses.   
 A policy of insurance issued to a risk retention group, or any member of that group, shall not be required to be countersigned.  
 A purchasing group and its insurer or insurers are subject to all applicable laws of this state, except that a purchasing group and its insurer or insurers are exempt, in regard to liability insurance for the purchasing group, from any law that would:   Prohibit the establishment of a purchasing group;   Make it unlawful for an insurer to provide or offer to provide insurance on a basis providing, to a purchasing group or its members, advantages based on their loss and expense experience not afforded to other persons with respect to rates, policy forms, coverages or other matters;   Prohibit a purchasing group or its members from purchasing insurance on a group basis described in subdivision (2);   Prohibit a purchasing group from obtaining insurance on a group basis because the group has not been in existence for a minimum period of time or because any member has not belonged to the group for a minimum period of time;   Require that a purchasing group have a minimum number of members, common ownership or affiliation, or certain legal form;   Require that a certain percentage of a purchasing group obtain insurance on a group basis;   Otherwise discriminate against a purchasing group or any of its members; or   Require that any insurance policy issued to a purchasing group or any of its members be countersigned by an insurance agent or broker residing in this state.   
  A purchasing group that intends to do business in this state shall, prior to doing business, furnish notice to the commissioner, which notice shall:  Identify the state in which the group is domiciled;   Identify all other states in which the group intends to do business;   Specify the lines and classifications of liability insurance that the purchasing group intends to purchase;   Identify the insurance company or companies from which the group intends to purchase its insurance and the domicile of the company;   Specify the method by which, and the person or persons, if any, through whom insurance will be offered to its members whose risks are resident or located in this state;   Identify the principal place of business of the group; and   Provide other information that may be required by the commissioner to verify that the purchasing group is qualified under  56-45-102(10).     A purchasing group shall, within ten (10) days, notify the commissioner of any changes in any of the items set forth in subsection (a).   The purchasing group shall register with and designate the commissioner, or other appropriate authority, as its agent, solely for the purpose of receiving service of legal documents or process, for which a filing fee shall be determined by the commissioner, except that the requirements do not apply in the case of a purchasing group that only purchases insurance that was authorized under the federal Products Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), and:  That in any state of the United States:  Was domiciled before April 1, 1986; and   Is domiciled on and after October 27, 1986;     That:  Before October 27, 1986, purchased insurance from an insurance carrier licensed in any state; and   Since October 27, 1986, purchased its insurance from an insurance carrier licensed in any state; or     That was a purchasing group under the requirements of the Product Liability Risk Retention Act of 1981 (15 U.S.C.  3901 et seq.), before October 27, 1986.     Each purchasing group that is required to give notice pursuant to subsection (a) shall also furnish such information as may be required by the commissioner to:  Verify that the entity qualifies as a purchasing group;   Determine where the purchasing group is located; and   Determine appropriate tax treatment.     
  A purchasing group may not purchase insurance from a risk retention group that is not chartered in a state or from an insurer not admitted in this state, unless the purchase is effected through a licensed agent or broker acting pursuant to the surplus lines laws and regulations of this state.   A purchasing group that obtains liability insurance from an approved surplus lines insurer in this state or a risk retention group shall inform each of the members of the group that have a risk resident or located in this state that the risk is not protected by an insurance insolvency guaranty fund in this state, and that the risk retention group or the insurer may not be subject to all insurance laws and regulations of this state.   No purchasing group may purchase insurance providing for a deductible or self-insured retention applicable to the group as a whole. Coverage may provide for a deductible or self-insured retention applicable to individual members.   Purchases of insurance by purchasing groups are subject to the same standards regarding aggregate limits that are applicable to all purchases of group insurance.   
 Premium taxes and taxes on premiums paid for coverage of risks resident or located in this state by a purchasing group or any members of the purchasing groups shall be:   Imposed at the same rate and subject to the same interest, fines and penalties as applicable to premium taxes and taxes on premiums paid for similar coverage from a similar insurance source by other insureds; and   Paid first by the insurance source, and, if not by the source, by the agent or broker for the purchasing group, and, if not by the agent or broker, then by the purchasing group, and, if not by the purchasing group, then by each of its members.   
 The commissioner is authorized to make use of any of the powers established under the insurance code of this state to enforce the laws of this state not specifically preempted by the Risk Retention Act of 1986, including the commissioner's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders, impose penalties and seek injunctive relief. With regard to any investigation, administrative proceedings or litigation, the commissioner can rely on the procedural laws of this state. The injunctive authority of the commissioner, in regard to risk retention groups, is restricted by the requirement that any injunction be issued by a court of competent jurisdiction.  
  No person, firm, association or corporation shall act or aid in any manner in soliciting, negotiating or procuring liability insurance in this state from a risk retention group unless the person, firm, association or corporation is licensed as an insurance agent or broker in accordance with chapter 6 of this title.    No person, firm, association or corporation shall act or aid in any manner in soliciting, negotiating or procuring liability insurance in this state for a purchasing group from an authorized insurer or a risk retention group chartered in a state unless the person, firm, association or corporation is licensed as an insurance agent or broker in accordance with chapter 6 of this title.   No person, firm, association or corporation shall act or aid in any manner in soliciting, negotiating or procuring liability insurance coverage in this state for any member of a purchasing group under a purchasing group's policy unless the person, firm, association or corporation is licensed as an insurance agent or broker in accordance with chapter 6 of this title.   No person, firm, association or corporation shall act or aid in any manner in soliciting, negotiating or procuring liability insurance from an approved surplus lines insurer on behalf of a purchasing group located in this state unless the person, firm, association or corporation is licensed as a surplus lines agent or an excess line broker in accordance with chapter 14 of this title.     For purposes of acting as an agent or broker for a risk retention group or purchasing group pursuant to subsections (a) and (b), the requirement of residence in this state does not apply.   Every person, firm, association or corporation licensed pursuant to chapter 6 of this title, on business placed with risk retention groups or written through a purchasing group, shall inform each prospective insured of the notice required by  56-45-104(g), in the case of a risk retention group, and  56-45-109(b), in the case of a purchasing group.   
 An order issued by any district court of the United States enjoining a risk retention group from soliciting or selling insurance, or operating in any state, or in all states or in any territory or possession of the United States, upon a finding that the risk retention group is in hazardous financial or financially impaired condition, is enforceable in the courts of this state.  
 The commissioner is authorized to promulgate, and from time to time amend, rules and regulations relating to risk retention groups as may be necessary or desirable to carry out this chapter. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 This part shall be known and may be cited as the Risk-Based Capital for Insurers Act.  
 As used in this part, unless the context otherwise requires:   Adjusted RBC Report means an RBC report that has been adjusted by the commissioner in accordance with  56-46-103(e);   Corrective order means an order issued by the commissioner specifying corrective actions that the commissioner has determined are required;   Domestic insurer means any insurance company domiciled in Tennessee;   Foreign insurer means any insurance company that is licensed to do business in Tennessee under this title but is not domiciled in Tennessee;   Life and/or health insurer means any insurance company licensed for those lines in Tennessee, or a property and casualty insurer writing only accident and health insurance;   NAIC means the National Association of Insurance Commissioners;   Negative trend means, with respect to a life and/or health insurer, negative trend over a period of time, as determined in accordance with the Trend Test Calculation included in the RBC Instructions;   Property and casualty insurer means any insurance company licensed in those lines in Tennessee, but does not include monoline mortgage guaranty insurers, financial guaranty insurers and title insurers;   RBC Instructions means the RBC Report including risk-based capital instructions adopted by the NAIC, as the RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC;   RBC Level means an insurer's Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC where:  Authorized Control Level RBC means the number determined under the risk-based capital formula in accordance with the RBC Instructions;   Company Action Level RBC means, with respect to any insurer, the product of 2.0 and its Authorized Control Level RBC;   Mandatory Control Level RBC means the product of 0.70 and the authorized Control Level RBC; and   Regulatory Action Level RBC means the product of 1.5 and its authorized Control Level RBC;     RBC Plan means a comprehensive financial plan containing the elements specified in  56-46-104(b). If the commissioner rejects the RBC Plan, and it is revised by the insurer, with or without the commissioner's recommendation, the plan shall be called the Revised RBC Plan;   RBC Report means the report required in  56-46-103; and   Total adjusted capital means the sum of:  An insurer's statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed pursuant to  56-1-501; and   The other items, if any, that the RBC Instructions may provide.     
  Every domestic insurer shall, on or prior to each March 1 (the filing date), prepare and submit to the commissioner a report of its RBC Levels as of the end of the calendar year just ended, in a form and containing the information that is required by the RBC Instructions. In addition, every domestic insurer shall file its RBC Report:  With the NAIC in accordance with the RBC Instructions; and   With the insurance commissioner in any state in which the insurer is authorized to do business, if the insurance commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC Report not later than the later of:  Fifteen (15) days from the receipt of notice to file its RBC Report with that state; or   The filing date.       A life and health insurer's RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account, and may adjust for the covariance between:  The risk with respect to the insurer's assets;   The risk of adverse insurance experience with respect to the insurer's liabilities and obligations;   The interest rate risk with respect to the insurer's business; and   All other business risks and other relevant risks that are set forth in the RBC Instructions, determined in each case by applying the factors in the manner set forth in the RBC Instructions.     A property and casualty insurer's RBC shall be determined in accordance with the formula set forth in the RBC Instructions. The formula shall take into account and may adjust for the covariance between:  Asset risk;   Credit risk;   Underwriting risk; and   All other business risks and other relevant risks that are set forth in the RBC Instructions;  determined in each case by applying the manner set forth in the RBC Instructions.      An excess of capital over the amount produced by the risk-based capital requirements contained in this part and the formulas, schedules and instructions referenced in this part is desirable in the business of insurance. Accordingly, insurers should seek to maintain capital above the RBC levels required by this part. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this part.   If a domestic insurer files an RBC Report that in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC Report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC Report as so adjusted is referred to as an Adjusted RBC Report.   
  Company Action Level Event means any of the following events:  The filing of an RBC Report by an insurer that indicates that:  The insurer's Total Adjusted Capital is greater than or equal to its Regulatory Action Level RBC but less than its Company Action Level RBC;   If a life and/or health insurer, the insurer has Total Adjusted Capital that is greater than or equal to its Company Action Level RBC but less than the product of its Authorized Control Level RBC and 3.0 and has a negative trend; or   If a property and casualty insurer, the insurer has total adjusted capital that is greater than the product of its Authorized Control Level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the Property and Casualty RBC instructions;     The notification by the commissioner to the insurer of an Adjusted RBC Report that indicates an event in subdivision (a)(1); provided the insurer does not challenge the Adjusted RBC Report under  56-46-108; or   If, pursuant to  56-46-108, an insurer challenges an Adjusted RBC Report that indicates the event in subdivision (a)(1), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.     In the event of a Company Action Level Event, the insurer shall prepare and submit to the commissioner an RBC Plan, which shall:  Identify the conditions that contribute to the Company Action Level Event;   Contain proposals of corrective actions that the insurer intends to take and would be expected to result in the elimination of the Company Action Level Event;   Provide projections of the insurer's financial results in the current year and at least the four (4) succeeding years, both in the absence of proposed corrective actions, including projections of statutory operating income, net income, capital and/or surplus. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense and benefit component;   Identify the key assumptions impacting the insurer's projections and the sensitivity of the projections to the assumptions; and   Identify the quality of, and problems associated with, the insurer's business including, but not limited to, its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case.     The RBC Plan shall be submitted:  Within forty-five (45) days of the Company Action Level Event; or   If the insurer challenges an Adjusted RBC Report pursuant to  56-46-108, within forty-five (45) days after notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.     Within sixty (60) days after the submission by an insurer of an RBC Plan to the commissioner, the commissioner shall notify the insurer whether the RBC Plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the RBC Plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination, and may set forth proposed revisions that will render the RBC Plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the insurer shall prepare a Revised RBC Plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the Revised RBC Plan to the commissioner:  Within forty-five (45) days after the notification from the commissioner; or   If the insurer challenges the notification from the commissioner under  56-46-108, within forty-five (45) days after a notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.     In the event of a notification by the commissioner to an insurer that the insurer's RBC Plan or Revised RBC Plan is unsatisfactory, the commissioner may, at the commissioner's discretion, subject to the insurer's right to a hearing under  56-46-108, specify in the notification that the notification constitutes a Regulatory Action Level Event.   Every domestic insurer that files an RBC Plan or Revised RBC Plan with the commissioner shall file a copy of the RBC Plan or Revised RBC Plan with the insurance commissioner in any state in which the insurer is authorized to do business if:  That state has an RBC provision substantially similar to  56-46-109(a); and   The insurance commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the RBC Plan or Revised RBC Plan in that state no later than the later of:  Fifteen (15) days after the receipt of notice to file a copy of its RBC Plan or Revised RBC Plan with the state; or   The date on which the RBC Plan or Revised RBC Plan is filed under subsections (c) and (d).       
  Regulatory Action Level Event means, with respect to any insurer, any of the following events:  The filing of an RBC Report by the insurer that indicates that the insurer's Total Adjusted Capital is greater than or equal to its Authorized Control Level RBC but less than its Regulatory Action Level RBC;   The notification by the commissioner to an insurer of an Adjusted RBC Report that indicates the event in subdivision (a)(1); provided, that the insurer does not challenge the Adjusted RBC Report under  56-46-108;   If, pursuant to  56-46-108, the insurer challenges an Adjusted RBC Report that indicates the event in subdivision (a)(1), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge;   The failure of the insurer to file an RBC Report by the filing date, unless the insurer has provided an explanation for the failure that is satisfactory to the commissioner and has cured the failure within ten (10) days after the filing date;   The failure of the insurer to submit an RBC Plan to the commissioner within the time period set forth in  56-46-104(c);   Notification by the commissioner to the insurer that:  The RBC Plan or Revised RBC Plan submitted by the insurer is, in the judgment of the commissioner, unsatisfactory; and   The notification constitutes a Regulatory Action Level Event with respect to the insurer; provided, that the insurer has not challenged the determination under  56-46-108;     If, pursuant to  56-46-108, the insurer challenges a determination by the commissioner under subdivision (b)(6), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge;   Notification by the commissioner to the insurer that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan, but only if the failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event in accordance with its RBC Plan or Revised RBC Plan and the commissioner has so stated in the notification; provided, that the insurer has not challenged the determination under  56-46-108; or   If, pursuant to  56-46-108, the insurer challenges a determination by the commissioner under subdivision (b)(8), the notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the challenge.     In the event of a Regulatory Action Level Event the commissioner shall:  Require the insurer to prepare and submit an RBC Plan or, if applicable, a Revised RBC Plan;   Perform such examination or analysis as the commissioner deems necessary of the assets, liabilities and operations of the insurer including a review of its RBC Plan or Revised RBC Plan; and   Subsequent to the examination or analysis, issue an order specifying corrective actions that the commissioner determines are required.     In determining corrective actions, the commissioner may take into account factors deemed relevant with respect to the insurer based upon the commissioner's examination or analysis of the assets, liabilities and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC Instructions. The RBC Plan or Revised RBC Plan shall be submitted:  Within forty-five (45) days after the occurrence of the Regulatory Action Level Event;   If the insurer challenges an Adjusted RBC Report pursuant to  56-46-108 and the challenge is not frivolous in the judgment of the commissioner, within forty-five (45) days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge; or   If the insurer challenges a Revised RBC Plan pursuant to  56-46-108 and the challenge is not frivolous in the judgment of the commissioner, within forty-five (45) days after the notification to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.     The commissioner may retain actuaries and investment experts and other consultants as may be necessary in the judgment of the commissioner to review the insurer's RBC Plan or Revised RBC Plan, examine or analyze the assets, liabilities and operations of the insurer and formulate the corrective order with respect to the insurer. The fees, costs and expenses relating to consultants shall be borne by the affected insurer or such other party as directed by the commissioner.   
  Authorized Control Level Event means any of the following events:  The filing of an RBC Report by the insurer that indicates that the insurer's Total Adjusted Capital is greater than or equal to its Mandatory Control Level RBC but less than its Authorized Control Level RBC;   The notification by the commissioner to the insurer of an Adjusted RBC Report that indicates the event in subdivision (a)(1); provided, that the insurer does not challenge the Adjusted RBC Report under  56-46-108;   If, pursuant to  56-46-108, the insurer challenges an Adjusted RBC Report that indicates the event in subdivision (a)(1), notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge;   The failure of the insurer to respond, in a manner satisfactory to the commissioner, to a corrective order; provided, that the insurer has not challenged the corrective order under  56-46-108; or   If the insurer has challenged a corrective order under  56-46-108 and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.     In the event of an Authorized Control Level Event with respect to an insurer, the commissioner shall:  Take the actions that are required under  56-46-105 regarding an insurer with respect to which a Regulatory Action Level Event has occurred; or   If the commissioner deems it to be in the best interests of the policyholders and creditors of the insurer and of the public, take actions necessary to cause the insurer to be placed under regulatory control pursuant to chapter 9 of this title. In the event the commissioner takes such actions, the Authorized Control Level Event shall be deemed sufficient grounds for the commissioner to take action pursuant to chapter 9 of this title, and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in chapter 9 of this title. In the event the commissioner takes actions under this subsection (b) pursuant to an Adjusted RBC Report, the insurer shall be entitled to the protections that are afforded to insurers under chapter 9, part 2 of this title.     
  Mandatory Control Level Event means any of the following events:  The filing of an RBC Report that indicates that the insurer's Total Adjusted Capital is less than its Mandatory Control Level RBC;   Notification by the commissioner to the insurer of an Adjusted RBC Report that indicates the event in subdivision (a)(1); provided, that the insurer does not challenge the Adjusted RBC Report under  56-46-108; or   If, pursuant to  56-46-108, the insurer challenges an Adjusted RBC Report that indicates the event in subdivision (a)(1), notification by the commissioner to the insurer that the commissioner has, after a hearing, rejected the insurer's challenge.     In the event of a Mandatory Control Level Event:  With respect to a life insurer, the commissioner shall take actions necessary to place the insurer under regulatory control pursuant to chapter 9 of this title. In that event, the Mandatory Control Level Event shall be deemed sufficient grounds for the commissioner to take action pursuant to chapter 9 of this title, and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in chapter 9 of this title. If the commissioner takes actions pursuant to an Adjusted RBC Report, the insurer shall be entitled to the protections of chapter 9, part 2 of this title pertaining to summary proceedings. Notwithstanding any of this subdivision (b)(1), the commissioner may forego action for up to ninety (90) days after the Mandatory Control Level Event if the commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the ninety-day period.   With respect to a property and casualty insurer, the commissioner shall take actions necessary to place the insurer under regulatory control pursuant to chapter 9 of this title, or in the case of an insurer that is writing no business and that is running-off its existing business, may allow the insurer to continue its run-off under the supervision of the commissioner. In either event, the Mandatory Control Level Event shall be deemed sufficient grounds for the commissioner to take action pursuant to chapter 9 of this title, and the commissioner shall have the rights, powers and duties with respect to the insurer as are set forth in chapter 9 of this title. If the commissioner takes actions pursuant to an Adjusted RBC Report, the insurer shall be entitled to the protections of chapter 9, part 2 of this title pertaining to summary proceedings. Notwithstanding any of this subdivision (b)(2), the commissioner may forego action for up to ninety (90) days after the Mandatory Control Level Event if the commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the ninety-day period.     
  The insurer shall have the right to a confidential departmental hearing, on a record, at which the insurer may challenge any determination or action by the commissioner, upon any of the following:  Notification to an insurer by the commissioner of an Adjusted RBC Report; or   Notification to an insurer by the commissioner that:  The insurer's RBC Plan or Revised RBC Plan is unsatisfactory; and   The notification constitutes a Regulatory Action Level Event with respect to the insurer; or     Notification to any insurer by the commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that the failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan; or   Notification to an insurer by the commissioner of a Corrective Order with respect to the insurer.     The insurer shall notify the commissioner of its request for a hearing within five (5) days after the notification by the commissioner under subdivision (a)(1), (2), (3) or (4). Upon receipt of the insurer's request for a hearing, the commissioner shall set a date for the hearing, which date shall be no less than ten (10) nor more than thirty (30) days after the date of the insurer's request.   
  All RBC reports, to the extent the information in the RBC report is not required to be set forth in a publicly available annual statement schedule, and RBC Plans, including the results or report of any examination or analysis of an insurer performed pursuant to this part and any corrective order issued by the commissioner pursuant to examination or analysis, with respect to any domestic insurer or foreign insurer that are in the possession or control of the department of commerce and insurance shall be confidential by law and privileged, shall not be subject to  10-7-503 or   56-1-602, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties.   It is the judgment of the general assembly that the comparison of an insurer's Total Adjusted Capital to any of its RBC Levels is a regulatory tool that may indicate the need for possible corrective action with respect to the insurer, and is not intended as a means to rank insurers generally. Therefore, except as otherwise required under  this part, the making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to the RBC Levels of any insurer, or of any component derived in the calculation, by any insurer, agent, broker or other person engaged in any manner in the insurance business would be misleading and is therefore prohibited; provided, that if any materially false statement with respect to the comparison regarding an insurer's Total Adjusted Capital to its RBC Levels (or any of them) or an inappropriate comparison of any other amount to the insurer's RBC Levels is published in any written publication and the insurer is able to demonstrate to the commissioner with substantial proof the falsity of the statement, or the inappropriateness, as the case may be, then the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement.   It is the further judgment of the general assembly that the RBC Instructions, RBC Reports, Adjusted RBC Reports, RBC Plan or Revised RBC Plans are intended solely for use by the commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers and shall not be used by the commissioner for ratemaking nor considered as evidence in any rate proceeding nor used by the commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that an insurer or any affiliate is authorized to write.   Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (a).   In order to assist in the performance of the commissioner's duties, the commissioner may:  Share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (a), with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;   Receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and   Enter into agreements governing sharing and use of information consistent with this subsection (e).     Disclosure of documents, materials or information to the commissioner under this section or as a result of sharing as authorized in subsection (e) shall not constitute waiver of any applicable privilege or claim of confidentiality.   
  This part is supplemental to any other laws of this state, and shall not preclude or limit any other powers or duties of the commissioner under the laws, including, but not limited to, chapter 9 of this title.   The commissioner may adopt reasonable rules necessary for the implementation of this part.   The commissioner may exempt from the application of this part any domestic property and casualty insurer that:  Writes direct business only in this state;   Writes direct annual premiums of two million dollars ($2,000,000) or less; and   Assumes no reinsurance in excess of five percent (5%) of direct premium written.     
  Any foreign insurer shall, upon the written request of the commissioner, submit to the commissioner an RBC Report as of the end of the calendar year just ended the later of:  The date an RBC Report would be required to be filed by a domestic insurer under this part; or   Fifteen (15) days after the request is received by the foreign insurer.     Any foreign insurer shall, at the written request of the commissioner, promptly submit to the commissioner a copy of any RBC Plan that is filed with the insurance commissioner of any other state.   In the event of a Company Action Level Event, Regulatory Action Level Event or Authorized Control Level Event with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer, or, if no RBC statute is in force in that state, under this part, if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC Plan in the manner specified under that state's RBC statute, or, if no RBC statute is in force in that state, under  56-46-104, the commissioner may require the foreign insurer to file an RBC Plan with the commissioner. In this event, the failure of the foreign insurer to file an RBC Plan with the commissioner shall be grounds to order the insurer to cease and desist from writing new insurance business in this state.   In the event of a Mandatory Control Level Event with respect to any foreign insurer, if no domiciliary receiver has been appointed with respect to the foreign insurer under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the commissioner may make application to the chancery court of Davidson County pursuant to chapter 9 of this title with respect to the liquidation of property of foreign insurers found in this state, and the occurrence of the Mandatory Control Level Event shall be considered adequate grounds for the application.   
 There shall be no liability on the part of, and no cause of action shall arise against, the commissioner or the department of commerce and insurance or its employees or agents for any action taken by them in the performance of their powers and duties under this part.  
 All notices by the commissioner to an insurer which may result in regulatory action under this part shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the insurer's receipt of such notice.  
 As used in this part, these terms have the following meanings:   Adjusted RBC report means an RBC report which has been adjusted by the commissioner in accordance with  56-46-202(d);   Corrective order means an order issued by the commissioner specifying corrective actions which the commissioner has determined are required;   Domestic health organization means a health organization domiciled in this state;   Foreign health organization means a health organization that is licensed to do business in this state under Chapters 27 28, 30, 31, 32 and 51 of this title but is not domiciled in this state;    Health organization means a health maintenance organization, limited health service organization, dental or vision plan, hospital, medical and dental indemnity or service corporation, or other managed care organization licensed pursuant to Chapters 27 28, 30, 31, 32 and 51 of this title;   Health organization does not include an organization that is licensed as either a life and health insurer or a property and casualty insurer under this title and that is otherwise subject to either the life or property and casualty RBC requirements;     NAIC means the National Association of Insurance Commissioners;   RBC instructions means the RBC report including risk-based capital instructions adopted by the NAIC, as these RBC instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC;   RBC level means a health organization's Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC where:  Company Action Level RBC means, with respect to any health organization, the product of 2.0 and its Authorized Control Level RBC;   Regulatory Action Level RBC means the product of 1.5 and its Authorized Control Level RBC;   Authorized Control Level RBC means the number determined under the risk-based capital formula in accordance with the RBC Instructions; and   Mandatory Control Level RBC means the product of 0.70 and the Authorized Control Level RBC;      RBC plan means a comprehensive financial plan containing the elements specified in  56-46-203(b);   If the commissioner rejects the RBC plan, and it is revised by the health organization, with or without the commissioner's recommendation, the plan shall be called the revised RBC plan;     RBC report means the report required in  56-46-202;   Total adjusted capital means the sum of:  A health organization's statutory capital and surplus, also known as net worth, as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under  56-27-117 for medical service plans,  56-28-111 for hospital service corporations,  56-30-117 for dental service plans,  56-31-116 for vision service plans,  56-32-108 for health maintenance organizations, and  56-51-134 for prepaid limited health services organizations; and   Such other items, if any, as the RBC instructions may provide.     
  A domestic health organization shall, on or prior to March 1 of each year (the filing date), prepare and submit to the commissioner a report of its RBC levels as of the end of the previous calendar year, in a form and containing such information as is required by the RBC instructions. In addition, a domestic health organization shall file its RBC report:  With the NAIC in accordance with the RBC instructions; and   With the insurance commissioner in any state in which the health organization is authorized to do business, if the insurance commissioner has notified the health organization of its request in writing, in which case the health organization shall file its RBC report by the later of:  Fifteen (15) days from the receipt of notice to file its RBC report with that state; or   The filing date.       A health organization's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take the following into account (and may adjust for the covariance between) determined in each case by applying the factors in the manner set forth in the RBC instructions:  Asset risk;   Credit risk;   Underwriting risk; and   All other business risks and such other relevant risks as are set forth in the RBC instructions.     An excess of capital, also known as net worth, over the amount produced by the risk-based capital requirements contained in this part and the formulas, schedules and instructions referenced in this part is desirable in the business of health insurance. Accordingly, health organizations should seek to maintain capital above the RBC levels required by this part. Additional capital is used in the insurance business and helps to secure a health organization against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this part.   If a domestic health organization files an RBC report that in the judgment of the commissioner is inaccurate, then the commissioner shall adjust the RBC report to correct the inaccuracy and shall notify the health organization of the adjustment. The notice shall contain a statement of the reason for the adjustment. An RBC report as so adjusted is referred to as an adjusted RBC report.   
  Company Action Level Event means any of the following events:  The filing of an RBC report by a health organization that indicates that:  The health organization's total adjusted capital is greater than or equal to its Regulatory Action Level RBC but less than its Company Action Level RBC; or   If a health organization has total adjusted capital which is greater than or equal to its Company Action Level RBC but less than the product of its Authorized Control Level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the Health RBC instructions;     Notification by the commissioner to the health organization of an adjusted RBC report that indicates an event in subdivision (a)(1); provided, that the health organization does not challenge the adjusted RBC report under  56-46-207; or   If, pursuant to  56-46-207, a health organization challenges an adjusted RBC report that indicates the event in subdivision (a)(1), the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge.     If a Company Action Level Event occurs, the health organization shall prepare and submit to the commissioner an RBC plan that shall:  Identify the conditions that contribute to the Company Action Level Event;   Contain proposals of corrective actions that the health organization intends to take and that would be expected to result in the elimination of the Company Action Level Event;   Provide projections of the health organization's financial results in the current year and at least the two (2) succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory balance sheets, operating income, net income, capital and surplus, and RBC levels. The projections for both new and renewal business might include separate projections for each major line of business and separately identify each significant income, expense and benefit component;   Identify the key assumptions impacting the health organization's projections and the sensitivity of the projections to the assumptions; and   Identify the quality of, and problems associated with, the health organization's business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business, and use of reinsurance, if any, in each case.     The RBC plan shall be submitted:  Within forty-five (45) days of the Company Action Level Event; or   If the health organization challenges an adjusted RBC report pursuant to  56-46-207, within forty-five (45) days after notification to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge.     Within sixty (60) days after the submission by a health organization of an RBC plan to the commissioner, the commissioner shall notify the health organization whether the RBC plan shall be implemented or is, in the judgment of the commissioner, unsatisfactory. If the commissioner determines the RBC plan is unsatisfactory, the notification to the health organization shall set forth the reasons for the determination, and may set forth proposed revisions which will render the RBC plan satisfactory, in the judgment of the commissioner. Upon notification from the commissioner, the health organization shall prepare a revised RBC plan, which may incorporate by reference any revisions proposed by the commissioner, and shall submit the revised RBC plan to the commissioner:  Within forty-five (45) days after the notification from the commissioner; or   If the health organization challenges the notification from the commissioner under  56-46-207, within forty-five (45) days after a notification to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge.     If the commissioner notifies a health organization that its RBC plan or revised RBC plan is unsatisfactory, the commissioner may at the commissioner's discretion, subject to the health organization's right to a hearing under  56-46-207, specify in the notification that the notification constitutes a Regulatory Action Level Event.   Every domestic health organization that files an RBC plan or revised RBC plan with the commissioner shall file a copy of the RBC plan or revised RBC plan with the insurance commissioner in any state, in which the health organization is authorized to do business if:  The state has an RBC provision substantially similar to  56-46-208(a); and   The insurance commissioner of that state has notified the health organization of its request for the filing in writing, in which case the health organization shall file a copy of the RBC plan or revised RBC plan in that state by the later of:  Fifteen (15) days after the receipt of notice to file a copy of its RBC plan or revised RBC plan with the state; or   The date on which the RBC plan or revised RBC plan is filed under subsections (c) and (d).       
  Regulatory Action Level Event means, with respect to a health organization, any of the following events:  The filing of an RBC report by the health organization that indicates that the health organization's total adjusted capital is greater than or equal to its Authorized Control Level RBC but less than its Regulatory Action Level RBC;   Notification by the commissioner to a health organization of an adjusted RBC report that indicates the event in subdivision (a)(1); provided, that the health organization does not challenge the adjusted RBC report under  56-46-207;   If, pursuant to  56-46-207, the health organization challenges an adjusted RBC report that indicates the event in subdivision (a)(1), the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge;   The failure of the health organization to file an RBC report by the filing date, unless the health organization has provided an explanation for the failure that is satisfactory to the commissioner and has cured the failure within ten (10) days after the filing date;   The failure of the health organization to submit an RBC plan to the commissioner within the time period set forth in  56-46-203(c);   Notification by the commissioner to the health organization that:  The RBC plan or revised RBC plan submitted by the health organization is, in the judgment of the commissioner, unsatisfactory; and   Notification constitutes a Regulatory Action Level Event with respect to the health organization; provided, that the health organization has not challenged the determination under  56-46-207;     If, pursuant to  56-46-207, the health organization challenges a determination by the commissioner under subdivision (a)(6), the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the challenge;   Notification by the commissioner to the health organization that the health organization has failed to adhere to its RBC plan or revised RBC plan, but only if the failure has a substantial adverse effect on the ability of the health organization to eliminate the Company Action Level Event in accordance with its RBC plan or revised RBC plan and the commissioner has so stated in the notification, provided the health organization has not challenged the determination under  56-46-207; or   If, pursuant to  56-46-207, the health organization challenges a determination by the commissioner under subdivision (a)(8), the notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the challenge.     In the event of a Regulatory Action Level Event the commissioner shall:  Require the health organization to prepare and submit an RBC plan or, if applicable, a revised RBC plan;   Perform such examination or analysis as the commissioner deems necessary of the assets, liabilities and operations of the health organization including a review of its RBC plan or revised RBC plan; and   Subsequent to the examination or analysis, issue an order specifying such corrective actions as the commissioner shall determine are required (a corrective order).     In determining corrective actions, the commissioner may take into account factors the commissioner deems relevant with respect to the health organization based upon the commissioner's examination or analysis of the assets, liabilities and operations of the health organization, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC plan or revised RBC plan shall be submitted:  Within forty-five (45) days after the occurrence of the Regulatory Action Level Event;   If the health organization challenges an adjusted RBC report pursuant to  56-46-207 and the challenge is not frivolous in the judgment of the commissioner, within forty-five (45) days after the notification to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge; or   If the health organization challenges a revised RBC plan pursuant to  56-46-207 and the challenge is not frivolous in the judgment of the commissioner, within forty-five (45) days after the notification to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge.     The commissioner may retain actuaries, investment experts, and other consultants as may be necessary in the judgment of the commissioner to review the health organization's RBC plan or revised RBC plan, examine or analyze the assets, liabilities and operations (including contractual relationships) of the health organization, and formulate the corrective order with respect to the health organization. The fees, costs and expenses relating to consultants shall be borne by the affected health organization or such other party as directed by the commissioner.   
  Authorized Control Level Event means any of the following events:  The filing of an RBC report by the health organization that indicates that the health organization's total adjusted capital is greater than or equal to its Mandatory Control Level RBC but less than its Authorized Control Level RBC;   The notification by the commissioner to the health organization of an adjusted RBC report that indicates the event in subdivision (a)(1); provided, that the health organization does not challenge the adjusted RBC report under  56-46-207;   If, pursuant to  56-46-207, the health organization challenges an adjusted RBC report that indicates the event in subdivision (a)(1), notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge;   The failure of the health organization to respond, in a manner satisfactory to the commissioner, to a corrective order; provided, that the health organization has not challenged the corrective order under  56-46-207; or   If the health organization has challenged a corrective order under  56-46-207 and the commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the health organization to respond, in a manner satisfactory to the commissioner, to the corrective order subsequent to rejection or modification by the commissioner.     If an Authorized Control Level Event occurs with respect to a health organization, the commissioner shall:  Take such actions as are required under  56-46-204 regarding a health organization with respect to which a Regulatory Action Level Event has occurred; or   If the commissioner deems it to be in the best interests of the policyholders and creditors of the health organization and of the public, take such actions as are necessary to cause the health organization to be placed under regulatory control under chapter 9 of this title. In the event the commissioner takes such actions, the Authorized Control Level Event shall be deemed sufficient grounds for the commissioner to take action under chapter 9 of this title, and the commissioner shall have the rights, powers and duties with respect to the health organization as are set forth in chapter 9 of this title. In the event the commissioner takes actions under this subsection (b) pursuant to an adjusted RBC report, the health organization shall be entitled to such protections as are afforded to health organizations under chapter 9, part 2 of this title pertaining to summary proceedings.     
  Mandatory Control Level Event means any of the following events:  The filing of an RBC report which indicates that the health organization's total adjusted capital is less than its Mandatory Control Level RBC;   Notification by the commissioner to the health organization of an adjusted RBC report that indicates the event in subdivision (a)(1); provided, that the health organization does not challenge the adjusted RBC report under  56-46-207; or   If, pursuant to  56-46-207, the health organization challenges an adjusted RBC report that indicates the event in subdivision (a)(1), notification by the commissioner to the health organization that the commissioner has, after a hearing, rejected the health organization's challenge.      In the event of a Mandatory Control Level Event, the commissioner shall take such actions as are necessary to place the health organization under regulatory control under chapter 9 of this title. In that event, the Mandatory Control Level Event shall be deemed sufficient grounds for the commissioner to take action under chapter 9 of this title, and the commissioner shall have the rights, powers and duties with respect to the health organization as are set forth in chapter 9 of this title. If the commissioner takes actions pursuant to an adjusted RBC report, the health organization shall be entitled to the protections of chapter 9, part 2 of this title pertaining to summary proceedings.   Notwithstanding subdivision (b)(1), the commissioner may forego action for up to ninety (90) days after the Mandatory Control Level Event if the commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within the ninety-day period.     
 Upon the occurrence of any of the following events the health organization shall have the right to a confidential departmental hearing, on the record, at which the health organization may challenge any determination or action by the commissioner. The health organization shall notify the commissioner of its request for a hearing within five (5) days after the notification by the commissioner under subdivision (1), (2), (3) or (4). Upon receipt of the health organization's request for a hearing, the commissioner shall set a date for the hearing, which shall be no less than ten (10) nor more than thirty (30) days after the date of the health organization's request. The events include:   Notification to a health organization by the commissioner of an adjusted RBC report;   Notification to a health organization by the commissioner that:  The health organization's RBC plan or revised RBC plan is unsatisfactory; and   Notification constitutes a Regulatory Action Level Event with respect to the health organization;     Notification to a health organization by the commissioner that the health organization has failed to adhere to its RBC plan or revised RBC plan and that the failure has a substantial adverse effect on the ability of the health organization to eliminate the Company Action Level Event with respect to the health organization in accordance with its RBC plan or revised RBC plan; or   Notification to a health organization by the commissioner of a corrective order with respect to the health organization.   
  All RBC reports, to the extent the information is not required to be set forth in a publicly available annual statement schedule, and RBC plans, including the results or report of any examination or analysis of a health organization performed pursuant to this part and any corrective order issued by the commissioner pursuant to examination or analysis, with respect to a domestic health organization or foreign health organization that are in the possession or control of the department of commerce and insurance shall be confidential by law and privileged, shall not be subject to  10-7-503 or   56-1-602, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action. However, the commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties.   Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials or information deemed confidential and privileged under subsection (a).   In order to assist in the performance of the commissioner's duties, the commissioner may:  Share documents, materials or other information, including the confidential and privileged documents, materials or information deemed confidential and privileged under subsection (a), with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;   Receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and   Enter into agreements governing sharing and use of information consistent with this subsection (c).     Disclosure of documents, materials or information to the commissioner under this section or as a result of sharing as authorized in subsection (c) shall not constitute a waiver of any applicable privilege or claim of confidentiality.   It is the judgment of the legislature that the comparison of a health organization's total adjusted capital to any of its RBC levels is a regulatory tool which may indicate the need for corrective action with respect to the health organization, and is not intended as a means to rank health organizations generally. Therefore, except as otherwise required under this part, the making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over a radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to the RBC levels of any health organization, or of any component derived in the calculation, by any health organization, agent, broker or other person engaged in any manner in the insurance business is misleading and is therefore prohibited; provided, however, that if any materially false statement with respect to the comparison regarding a health organization's total adjusted capital to its RBC levels (or any of them) or an inappropriate comparison of any other amount to the health organizations' RBC levels is published in any written publication and the health organization is able to demonstrate to the commissioner with substantial proof the falsity of the statement, or the inappropriateness, as the case may be, then the health organization may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement.   It is the further judgment of the legislature that the RBC instructions, RBC reports, adjusted RBC reports, RBC plans and revised RBC plans are intended solely for use by the commissioner in monitoring the solvency of health organizations and the need for possible corrective action with respect to health organizations and shall not be used by the commissioner for ratemaking nor considered or introduced as evidence in any rate proceeding nor used by the commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that a health organization or any affiliate is authorized to write.   
  This part is supplemental to any other laws of this state, and shall not preclude or limit any other powers or duties of the commissioner under such laws, including, but not limited to, chapter 9 of this title.   The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this part.   The commissioner may exempt from the application of this part a domestic health organization that:  Writes direct business only in this state;   Assumes no reinsurance in excess of five percent (5%) of direct premium written; and    Writes direct annual premiums for comprehensive medical business of two million dollars ($2,000,000) or less; or   Is a limited health service organization that covers less than two thousand (2,000) lives.       
   A foreign health organization shall, upon the written request of the commissioner, submit to the commissioner an RBC report as of the end of the calendar year just ended the later of:  The date an RBC report would be required to be filed by a domestic health organization under this part; or   Fifteen (15) days after the request is received by the foreign health organization.     A foreign health organization shall, at the written request of the commissioner, promptly submit to the commissioner a copy of any RBC plan that is filed with the insurance commissioner of any other state.     In the event of a Company Action Level Event, Regulatory Action Level Event or Authorized Control Level Event with respect to a foreign health organization as determined under the RBC statute applicable in the state of domicile of the health organization, or, if no RBC statute is in force in that state, under this part, if the insurance commissioner of the state of domicile of the foreign health organization fails to require the foreign health organization to file an RBC plan in the manner specified under that state's RBC statute, or, if no RBC statute is in force in that state, under  56-46-203, the commissioner may require the foreign health organization to file an RBC plan with the commissioner. In such event, the failure of the foreign health organization to file an RBC plan with the commissioner shall be grounds to order the health organization to cease and desist from writing new insurance business in this state.   In the event of a Mandatory Control Level Event with respect to a foreign health organization, if no domiciliary receiver has been appointed with respect to the foreign health organization under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign health organization, the commissioner may make application to the chancery court of Davidson County pursuant to chapter 9 of this title with respect to the liquidation of property of foreign health organizations found in this state, and the occurrence of the Mandatory Control Level Event shall be considered adequate grounds for the application.   
 There shall be no liability on the part of, and no cause of action shall arise against, the commissioner or the department or its employees or agents for any action taken by them in the performance of their powers and duties under this part.  
 All notices by the commissioner to a health organization that may result in regulatory action under this part shall be effective upon dispatch if transmitted by registered or certified mail, or in the case of any other transmission shall be effective upon the health organization's receipt of notice.  
 For RBC reports required to be filed by health organizations with respect to 2015, the following requirements shall apply in lieu of  56-46-203, 56-46-204, 56-46-205 and 56-46-206:   In the event of a Company Action Level Event with respect to a domestic health organization, the commissioner shall take no regulatory action under this part;   In the event of a Regulatory Action Level Event under  56-46-204(a)(1), (a)(2) or (a)(3) the commissioner shall take the actions required under  56-46-203;   In the event of a Regulatory Action Level Event under  56-46-204(a)(4), (a)(5), (a)(6), (a)(7), (a)(8) or (a)(9) or an Authorized Control Level Event, the commissioner shall take the actions required under  56-46-204 with respect to the health organization;   In the event of a Mandatory Control Level Event with respect to a health organization, the commissioner shall take the actions required under  56-46-205 with respect to the health organization.   
 If any provision of this part, or its application to any person or circumstance, is held invalid, that determination shall not affect the provisions or applications of this part that can be given effect without the invalid provision or application, and to that end the provisions of this part are severable.  
 This chapter shall be known and may be cited as the Workers' Compensation Fraud Act.  
 As used in this chapter, unless the context otherwise requires:   Actual malice means the knowledge that information is false, or reckless disregard of whether it is false;   Conceal means to take affirmative action to prevent others from discovering information. Mere failure to disclose information does not constitute concealment. Action by the holder of a legal privilege, or one who has a reasonable belief that a privilege exists, to prevent discovery of privileged information does not constitute concealment;   Insurance policy means the written instrument in which are set forth the terms of any binder of coverage or contract of insurance, including a binder or contract issued by a state-assigned risk plan, or other forms of workers' compensation insurance;   Insurance professional means sales agents, managing general agents, brokers, producers, adjusters and third party administrators;   Insurance transaction means a transaction by, between or among an:  Insurer or a person who acts on behalf of an insurer; and   Insured, claimant, applicant for insurance, public adjuster, insurance professional, practitioner or any person who acts on behalf of any of the insureds, claimants, applicants for insurance, public adjusters, insurance professionals and practitioners, for the purpose of obtaining insurance or reinsurance, calculating insurance premiums, submitting a claim, negotiating or adjusting a claim or otherwise obtaining insurance, self-insurance or reinsurance or obtaining the benefits of or from insurance, self-insurance or reinsurance;     Insurer means any person purporting to engage in the business of insurance or authorized to do business in this state or subject to regulation by the state, who undertakes to indemnify another against loss, damage or liability arising from a contingent or unknown event related to causes arising under title 50, chapter 6;   Pattern or practice means repeated, routine or generalized in nature, and not merely isolated or sporadic;   Person means a natural person, company, corporation, unincorporated association, partnership, professional corporation, agency of government or any other entity;   Practitioner means a licensee of this state authorized to practice medicine and surgery, psychology, chiropractic or law or any other licensee of state or person required to be licensed in this state whose services are compensated either in whole or in part, directly or indirectly, by insurance proceeds;   Premium means consideration paid or payable for coverage under an insurance policy. Premium includes any payments, whether due within the insurance policy term or otherwise, and deductible payments whether advanced by the insurer or insurance professional and subject to reimbursement by the insured or otherwise, any self-insured retention or payments, whether advanced by the insurer or insurance professionals and subject to reimbursement by the insured or otherwise, and any collateral or security to be provided to collateralize obligations to pay any of the above;   Premium avoidance means any intentional material misrepresentation by an employer of any or all of the four (4) premium determinants. The determinants are employee job classifications, amount of payroll in each classification, geographic location of insured operations, and history of past losses. Intentional misrepresentation of each of these items can affect the total premium charged by an insurer to a workers' compensation risk;   Reckless means without reasonable belief of the truth, or, for the purposes of  56-47-104(a)(3), with a high degree of awareness of probable insolvency; and   Withhold means to fail to disclose facts or information that any law other than this chapter requires to be disclosed. Mere failure to disclose information does not constitute withholding if the one failing to disclose reasonably believes that there is no duty to disclose.   
  Any person who, knowingly and with intent to defraud, and for the purpose of depriving another of property or for pecuniary gain, commits or participates in or permits its employees or its agents to commit any of the following acts, has committed a fraudulent insurance act:  Presents, causes to be presented or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, insurer, claimant or applicant to an insurer or insurance professional in connection with an insurance transaction any information that contains false representations as to any material fact, or that withholds or conceals a material fact concerning any of the following:   Presents, causes to be presented or prepares with knowledge or belief that it will be presented, to or by an insurer or insurance professional in connection with an insurance transaction, any information that contains false representations as to any material fact, or that withholds or conceals a material fact, concerning any of the following:   Solicits or accepts new or renewal insurance risks by or for an insolvent insurer;   Removes the assets or records of assets, transactions and affairs or the material part of the assets or records of assets, transactions and affairs from the home office or other place of business of the insurer, or from the place of safekeeping of the insurer, or destroys or sequesters the same from the department of commerce and insurance;   Diverts, misappropriates, converts or embezzles funds of an insurer, an insured, claimant or applicant for insurance in connection with:   Presents, causes to be presented or prepares with knowledge or belief that it will be presented, by or on behalf of an insured or insurer, or insurance professional, to a claimant or any other person in connection with an insurance transaction, any information that contains false representations as to any material fact, or that withholds or conceals a material fact concerning any of the following:     It is unlawful for any person to commit, or to attempt to commit, or to aid, assist, abet or solicit another to commit, or to conspire to commit a fraudulent insurance act.   A practitioner violates this section only if the practitioner has been engaged in conduct that constitutes a pattern or practice of violation of this section.   It is unlawful for an employer subject to the Workers' Compensation Law, compiled in title 50, chapter 6, to intentionally fail to secure payment of compensation by providing workers' compensation insurance coverage or by qualifying as a self-insurer pursuant to the workers' compensation law.    The application for, rating of or renewal of, any insurance policy;   A claim for payment or benefit pursuant to any insurance policy; or   Payments made in accordance with the terms of any insurance policy;   The solicitation for sale of any insurance policy or purported insurance policy;   An application for certificate of authority; or   The financial condition of any insurer;   An insurance transaction; or   The conduct of business activities by an insurer or insurance professional; or   A claim for payment or benefit pursuant to any insurance policy; or   Payments made in accordance with the terms of any insurance policy.  
  Any person who commits, or participates in, or permits its employees or its agents to commit any of the following acts with an intent to induce reliance, has committed an unlawful insurance act:  Presents, causes to be presented or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, insurer, claimant or applicant to an insurer or insurance professional in connection with an insurance transaction, any information that the person knows to contain false representations, or representations, the falsity of which the person has recklessly disregarded, as to any material fact, or that withholds or conceals a material fact, concerning any of the following:   Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, insurance professional in connection with an insurance transaction, any information that the person knows to contain false representations, or representations, the falsity of which the person has recklessly disregarded, as to any material fact, or that withholds or conceals a material fact, concerning any of the following:   Solicits or accepts new or renewal insurance risks by or for an insurer that the person knows was insolvent or the insolvency of which the person recklessly disregards;   Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, by or on behalf of an insured or insurer, or insurance professional or any other person to a claimant in connection with an insurance transaction, any information that the person knows to contain false representations, or representations, the falsity of which the person has recklessly disregarded, as to any material fact, or that withholds or conceals a material fact, concerning any of the following:     It is unlawful for any person to commit, or to attempt to commit, or to aid, assist, abet or solicit another to commit, or to conspire to commit an unlawful insurance act.   A practitioner violates this section only if the practitioner has been engaged in conduct that constitutes a pattern or practice of violation of this section.    The application for, rating of or renewal of, any insurance policy;   A claim for payment or benefit pursuant to any insurance policy; or   Payments made in accordance with the terms of any insurance policy;   The solicitation for sale of any insurance policy or purported insurance policy;   An application for certificate of authority; or   The financial condition of any insurer;   A claim for payment for benefit pursuant to any insurance policy; or   Payments made in accordance with the terms of any insurance policy.  
 Violations of  56-47-103(a), (b) and (c) are to be valued according to  39-11-106(a)(38), and punished as theft under  39-14-105. Violations of  56-47-103(d) shall be valued to include the total amount of workers' compensation premiums that the employer avoided paying, to be calculated by utilizing the appropriate Tennessee assigned risk plan advisory prospective loss cost and multiplier for such an employer for the total number of years, and parts of years, during which the employer was subject to the workers' compensation law and intentionally failed to secure payment of compensation as required by the workers' compensation law, and the violations shall be punished as theft under  39-14-105.  
  A person convicted of a violation of  56-47-103 shall be ordered to make monetary restitution for any financial loss or damages sustained by an injured employee or any other person as a result of the violation. Financial loss or damage shall include, but is not necessarily limited to, loss of earnings, out-of-pocket and other expenses, paid deductible amounts under an insurance policy, insurer claim payments, costs reasonably attributed to investigations and recovery efforts by owners, insurers, insurance professionals, law enforcement and other public authorities, and costs of prosecution.   When restitution is ordered, the court shall determine its extent and methods. Restitution may be imposed in addition to a fine and, if ordered, any other penalty, but not in lieu thereof. The court shall determine whether restitution, if ordered, shall be paid in a single payment or installments and shall fix a period of time within which payment of restitution is to be made in full.   
 Any practitioner determined by the court to have violated  56-47-103 shall be deemed to have committed an act involving moral turpitude that is inimical to the public well-being. The court or prosecutor shall notify the appropriate licensing authority in this state of the judgment for appropriate disciplinary action, including revocation of any such professional's license, and may notify appropriate licensing authorities in any other jurisdictions where the practitioner is licensed. Any victim may notify the appropriate licensing authorities in this state and any other jurisdiction where the practitioner is licensed, of the conviction. The state licensing authority shall take appropriate administrative action authorized by state law, to consider the imposition of any administrative sanctions or license revocations as provided by law against the practitioner. It is recommended by the general assembly that the state supreme court shall take appropriate action, including, but not limited to, disbarment with respect to any attorney found guilty of such felony. All the referrals to the appropriate licensing or other agencies, and all dispositive actions of the licensing or other agencies, shall be a matter of public record.  
   Any person economically injured by reason of a violation of  56-47-104 may recover for the economic injury from the person violating  56-47-104, in any appropriate court, the following:   An action maintained under this subsection (a) may neither be certified as a class action nor be made part of a class action.      Any person economically injured by reason of a violation of  56-47-103 may recover for the economic injury from the person violating  56-47-103, in any appropriate court, the following:   An action maintained under this subsection (b) may neither be certified as a class action nor be made part of a class action.     Any person injured in the course of employment or in such person's business or property by a person violating  56-47-103, upon a showing of clear and convincing evidence that the violation was part of a pattern or practice of such violations, shall be entitled to recover threefold the injured person's economic damages. An action for treble damages must be brought within one (1) year of the last to occur of the violations. One third (1/3) of the treble damages awarded shall be payable to the state to be used solely for the purpose of investigation and prosecution of violations of this chapter or other fraudulent behavior relating to insurance transactions, and/or for public education relating to workers' compensation insurance fraud. An action maintained under this subsection (c) may neither be certified as a class action nor be made part of a class action, unless the violations of  56-47-103 giving rise to the action resulted in criminal conviction of the violator or violators under  56-47-105.    The attorney general and reporter has the authority to maintain civil proceedings on behalf of the department of commerce and insurance and any victims of violations of  56-47-103. In any such action, the court shall proceed as soon as practicable to the hearing and determination of the proceedings. Pending final determination of the proceedings, the court may at any time enter restraining orders or prohibitions, or take other actions, including the acceptance of satisfactory performance bonds, as it shall deem proper.   The court has the jurisdiction to prevent and restrain violations of  56-47-103 by issuing appropriate orders.   In any action commenced under this subsection (d), the court, upon finding that any person has violated  56-47-103, shall levy a fine of up to five thousand dollars ($5,000) for each violation.     Any court in which a prosecution for violation of  56-47-103 is pending shall have authority to stay or limit proceedings in any civil action regarding the same or related conduct. Any court in which is pending a civil action brought pursuant to subsection (d) may stay or limit proceedings in actions brought pursuant to subsections (a)-(c) regarding the same or related conduct, or may transfer the actions or consolidate them before itself or allow the plaintiffs in such actions to participate in the action brought pursuant to subsection (d), as it shall prescribe.   Any civil cause of action under this section for violation of  56-47-103 or  56-47-104 must be brought within one (1) year of the commission of the last occurring of the acts constituting the violation, or within one (1) year of the time the plaintiff discovered, or with reasonable diligence could have discovered, the acts, whichever is later.   Any person economically injured by reason of a violation of  56-47-103 or  56-47-104 may recover under only one (1) of the subsections in this section.    Return of any profit, benefit, compensation or payment received by the person violating  56-47-104 directly resulting from the violation; and   Reasonable attorney's fees, related legal expenses, including internal legal expenses and court costs.   Return of any profit, benefit, compensation or payment received by the person violating  56-47-103 directly resulting from the violation;   Reasonable attorney's fees, related legal expenses, including internal legal expenses and court costs;   All other economic damages directly resulting from the violation of  56-47-103;   Reasonable investigative fees based on a reasonable estimate of the time and expense incurred in the investigation of the violation or violations of  56-47-103 proved at trial; and   A penalty of no less than one thousand dollars ($1,000) and no greater than ten thousand dollars ($10,000).  
  The remedies expressly provided in  56-47-108 shall be the only private remedies for violations of this chapter and no additional remedies shall be implied. The remedies available under  56-47-108 shall not be used in conjunction with or in addition to any other remedies available at law or in equity to duplicate recovery for the same element of economic damage. Further, in any civil action pleading both exemplary damages and the treble damages available in  56-47-108(c), the plaintiff shall elect one or the other remedy, but not both, at the conclusion of the evidentiary phase of the trial.   However, nothing in this chapter shall limit or abrogate any right of action that would have existed in the absence of this chapter, but no action based on such a right shall rely on this chapter to establish a standard of conduct or for any other purpose.   
  When any law enforcement official or authority, the department of commerce and insurance or department of labor and workforce development requests information from an insurer, insurance professional or any other person for the purpose of detecting, prosecuting or preventing insurance fraud, the insurer, insurance professional or other person shall take all reasonable actions to promptly provide the information requested, subject to any legal privilege protecting the information.   Any insurer, insurance professional or other person who has reasonable belief that an act violating  56-47-103 or  56-47-104 will be, is being, or has been committed, shall furnish and disclose any information in its possession concerning the act to the appropriate law enforcement official or authority, department of commerce and insurance or department of labor and workforce development, subject to any legal privilege protecting the information.   An insurer, insurance professional or other person providing information to any law enforcement, regulatory, licensing or other governmental agency under subsection (a) or (b), shall have the right to request information in the possession or control of the agency relating to the suspected violation or to a pattern of related activity, except information that was privileged or confidential under the laws of this state prior to its submission to the agency. In instances where disclosure would not jeopardize an ongoing investigation or prosecution, the agency shall provide the requested information to the insurer, insurance professional or other person. The agency may request that the insurer, insurance professional or other person keep the disclosed information confidential.   Any person that has a reasonable belief that an act violating this chapter will be, is being, or has been committed or any person who collects, reviews or analyzes information concerning insurance fraud, may furnish and disclose any information in its possession concerning the act to an authorized representative of an insurer that requests the information for the purpose of detecting, prosecuting or preventing insurance fraud.   Failure to cooperate with a request for information from an appropriate local or state authority shall bar a person's eligibility for restitution from any proceeds resulting from the governmental investigation and prosecution.   
 In the absence of actual malice, no person furnishing, disclosing or requesting information pursuant to  56-47-110 shall be subject to civil liability for libel, slander or any other cause of action arising from the furnishing, disclosing or requesting of the information. No person providing information pursuant to  56-47-110(a) shall be subject to civil liability for any cause of action arising from the person's provision of requested information. Any person against whom any action is brought who is found to be immune from liability under this section shall be entitled to recover reasonable attorney's fees and costs from the person or party who brought the action. This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person.  
   Every insurer shall prepare, implement, maintain and submit to the department of commerce and insurance a workers' compensation insurance anti-fraud plan.   Each insurer's anti-fraud plan shall outline specific procedures to:  Prevent, detect and investigate all forms of insurance fraud, including fraud involving the insurer's employees or agents; fraud resulting from misrepresentations in the application, renewal or rating of insurance policies; claims fraud; and security of the insurer's data processing system;   Educate appropriate employees on fraud detection and the insurer's anti-fraud plan;   Provide for the hiring of or contracting for fraud investigators;   Report insurance fraud to appropriate law enforcement and regulatory authorities in the investigation and prosecution of insurance fraud; and   Pursue restitution for financial loss caused by insurance fraud, where appropriate.     The commissioner may review each insurer's anti-fraud plan to determine if it complies with the requirements of this section.   It is the responsibility of the commissioner to assure insurer compliance with anti-fraud plans submitted to the commissioner. The commissioner may require reasonable modification of the insurer's anti-fraud plan, or may require other reasonable remedial action if the review or examination reveals substantial noncompliance with the terms of the insurer's own anti-fraud plan.   The commissioner may require each insurer to file a summary of the insurer's anti-fraud activities and results. The anti-fraud plans and the summary of the insurer's anti-fraud activities and results are not public records and are exempt from title 10, chapter 7, part 5, and shall be proprietary and not subject to public examination, and shall not be discoverable or admissible in civil litigation.   This section confers no private rights of action.      All printed applications for insurance, and all printed claim forms provided and required by an insurer or required by law as a condition of payment of a claim, shall contain a statement, permanently affixed to the application or claim form, that clearly states in substance the following:  It is a crime to knowingly provide false, incomplete or misleading information to any party to a workers' compensation transaction for the purpose of committing fraud. Penalties include imprisonment, fines and denial of insurance benefits.    The lack of a statement required in this section does not constitute a defense in any criminal prosecution under  56-47-103 nor in any civil action under  56-47-103 or  56-47-104.     Notwithstanding any other provision of title 56, the following are the exclusive monetary penalties for a violation of this section. Insurers that fail to prepare, implement, maintain and submit to the department of commerce and insurance an insurance anti-fraud plan are subject to a penalty of five hundred dollars ($500) per day, not to exceed twenty-five thousand dollars ($25,000).   
 This chapter shall be known and may be cited as the Provider-Sponsored Organization Act of 1998.  
 As used in this chapter, unless the context otherwise requires:   Commissioner means the commissioner of commerce and insurance;   Health care services means a health or medical care procedure or service rendered by a health care provider that:  Provides testing, diagnosis or treatment of a human disease or dysfunction; or   Dispenses drugs, medical devices, medical appliances, or medical goods for the treatment of a human disease or dysfunction;     HHS means the United States department of health and human services;   Medicare+Choice program means the criteria developed by United States Public Law 105-33, The Balanced Budget Act of 1997 (BBA), whereby risk-bearing organizations are permitted to offer health insurance or health benefits coverage to Medicare-eligible enrollees through a Medicare+Choice plan;   Provider means any person, including a physician or hospital that is licensed or otherwise authorized in this state to provide health care services; and   Provider-sponsored organization or PSO means a public or private entity that:  Is established or organized, and operated, by a health care provider, or group of affiliated health care providers;   Provides a substantial proportion, as defined by rule or regulation promulgated by HHS, of the health care items and services under the Medicare+Choice program directly through the provider or affiliated group of providers; and     With respect to which the affiliated providers share, directly or indirectly, substantial financial risk with respect to the provision of such items and services and have at least a majority financial interest in the entity;   As used in subdivision (6)(C)(i), a provider is affiliated with another provider if, through contract, ownership or otherwise:        One (1) provider, directly or indirectly, controls, is controlled by, or is under common control with the other;   The providers are part of a controlled group of corporations under the Internal Revenue Code of 1986,  1563;   Each provider is a participant in a lawful combination under which each provider shares substantial financial risk in connection with the organization's operations; or   The providers are part of an affiliated service group under the Internal Revenue Code of 1986,  414.   
 Before an entity may operate under the Medicare+Choice program, the entity must obtain a license from the commissioner or be a PSO that obtains a waiver of the requirement for state licensure from HHS in accordance with United States Public Law 105-33, the Balanced Budget Act of 1997. Any entity that obtains such a waiver is not required to obtain a license from the commissioner to operate as a PSO offering a Medicare+Choice plan in this state.  
 The commissioner is authorized to adopt rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to implement this chapter, including solvency standards, that do not impose requirements in addition to those required by federal regulations applicable to PSOs.  
  This chapter shall be known and may be cited as the Tennessee Creditor-Placed Insurance Act of 1999.   The purposes of this chapter are to:  Promote the public welfare by regulating creditor-placed insurance;   Create a legal framework within which creditor-placed insurance may be written in this state;   Help maintain the separation between creditors and insurers; and   Minimize the possibilities of unfair competitive practices in the sale of creditor-placed insurance.     
  This chapter applies to an insurer or agent transacting creditor-placed insurance as defined in this chapter.   All creditor-placed insurance written in connection with credit transactions for personal, family or household purposes is subject to  this chapter, except:  Transactions involving extensions of credit primarily for business or commercial purposes;   Insurance on collateralized real property;   Insurance offered by the creditor and elected by the debtor at the debtor's option;   Insurance for which no specific charge is made to the debtor or the debtor's account; or   Blanket insurance, whether paid for by the debtor or the creditor.     Nothing in this chapter shall be construed to create or imply a private cause of action for violation of this chapter, and the commissioner shall have authority to bring administrative or judicial proceedings to enforce this chapter.   
 As used in this chapter, unless the context otherwise requires:   Actual cash value (ACV) means the cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence;   Agent means a person who receives a commission for insurance placed or written or who, on behalf of an insurer or creditor, solicits, negotiates, effects, procures, delivers, renews, continues or binds policies of insurance to which this chapter applies, except a regular salaried officer, employee or other representative of an insurer who devotes substantially all working time to activities other than those specified here and who receives no compensation that is directly dependent on the amount of insurance business written, and except a regular salaried officer or employee of a creditor who receives no compensation that is directly dependent on the amount of insurance effected or procured;   Blanket insurance means insurance that provides coverage on collateral as defined in a policy issued to a creditor, without specifically listing the collateral covered;   Collateral means personal property that is pledged as security for the satisfaction of a debt;   Commissioner means the commissioner of commerce and insurance;   Credit agreement means the written document that sets forth the terms of the credit transaction and includes the security agreement;   Credit transaction means a transaction by the terms of which the repayment of money loaned or credit commitment made, or payment of goods, services or properties sold or leased, is to be made at a future date or dates;   Creditor means the lender of money or vendor or lessor of goods, services, property, rights or privileges for which payment is arranged through a credit transaction, or any successor to the right, title or interest of a lender, vendor or lessor;   Creditor-placed insurance means insurance that is purchased unilaterally by the creditor, who is the named insured, subsequent to the date of the credit transaction, providing coverage against loss, expense or damage to collateralized personal property as a result of fire, theft, collision or other risks of loss that would either impair a creditor's interest or adversely affect the value of collateral covered by limited dual interest insurance. It is purchased according to the terms of the credit agreement as a result of the debtor's failure to provide required physical damage insurance, with the cost of the coverage being charged to the debtor. It shall be either single interest insurance or limited dual interest insurance;   Debtor means the borrower of money or a purchaser or lessee of goods, services, property, rights or privileges, for which payment is arranged through a credit transaction;   Insurance tracking means monitoring evidence of insurance on collateralized credit transactions to determine whether insurance required by the credit agreement has lapsed, and communicating with debtors concerning the status of insurance coverage;   Insurer means an insurance company, association or exchange authorized to issue insurance policies in this state;   Lapse means that the insurance coverage required by the credit agreement is not in force;   Limited dual interest insurance means insurance purchased by the creditor to insure its interest in the collateral securing the debtor's credit transaction. This insurance waives the three (3) conditions for loss payment under single interest insurance and extends coverage on the collateral while in the possession of the debtor;   Loss ratio means the ratio of incurred losses to earned premium;   Net debt means the amount necessary to liquidate the remaining debt in a single lump-sum payment, excluding all unearned interest and other unearned charges; and   Single interest insurance means insurance purchased by the creditor to insure its interest in the collateral securing a debtor's credit transaction. Three (3) conditions must be met for payment of loss under the policy:  The debtor has defaulted in payment;   The creditor has legally repossessed the collateral, unless collateral has been stolen from the debtor; and   The creditor has suffered an impairment of interest.     
  Creditor-placed insurance shall become effective on the latest of the following dates:  The date of the credit transaction;   The date prior coverage, including prior creditor-placed insurance coverage, lapsed;   One (1) year before the date on which the related insurance charge is made to the debtor's account; or   A later date provided for in the agreement between the creditor and insurer.     Creditor-placed insurance shall terminate on the earliest of the following dates:  The date other acceptable insurance becomes effective, subject to the debtor providing acceptable evidence of the other insurance to the creditor;   The date the collateralized personal property is repossessed, unless the property is returned to the debtor within ten (10) days of the repossession;   The date the collateralized personal property is determined by the insurer to be a total loss;   The date the debt is completely extinguished; or   An earlier date specified in the individual policy or certificate of insurance.     An insurance charge shall not be made to a debtor for a term longer than the scheduled term of the creditor-placed insurance when it becomes effective, nor may an insurance charge be made to the debtor for creditor-placed insurance before the effective date of the insurance.   If a charge is made to a debtor for creditor-placed insurance coverage that exceeds a term of one (1) year, the debtor shall be notified at least annually that the insurance will be cancelled and a refund or credit of unearned charges made if evidence of acceptable insurance secured by the debtor is provided.   
  Premiums for creditor-placed insurance coverage may be calculated based on:  An amount not exceeding the net debt even though the coverage may limit the insurer's liability to the net debt, actual cash value or cost of repair; or   Other premium calculation methods that more closely reflect the exposure of each item insured and approximate the premium calculation method of the coverage required by the credit agreement.     An insurer shall not write creditor-placed insurance for which the premium rate differs from that determined by the schedules of the insurer on file with the commissioner. The premium or amount charged to the debtor for creditor-placed insurance shall not exceed the premiums charged by the insurer, computed at the time the charge to the debtor is determined.   A method of billing insurance charges to the debtor on closed-end credit transactions that creates a balloon payment at the end of the credit transaction or extends the credit transaction's maturity date is prohibited, unless specifically disclosed at the time of the origination of the credit agreement and specifically agreed to by the debtor at the time the charge is added to the outstanding credit balance.   
  Creditor-placed insurance coverage shall not include:  Coverage for the cost of repossession;   Skip, confiscation and conversion coverage;   Coverage for payment of mechanics' or other liens that do not arise from a covered loss occurrence;   Coverage that requires a debtor's insurance deductible to be less than two hundred dollars ($200); or   Coverage that is broader than the insurance coverages that meets the minimum insurance requirements of the credit agreement.     Nothing in this section shall be deemed to prohibit the issuance of a separate policy or endorsement providing the coverages listed in subsection (a). However, no charge shall be passed along to the debtor for the coverages.   
 Creditor-placed insurance shall be set forth in an individual policy or certificate of insurance. A copy of the individual policy, certificate of insurance coverage, or other evidence of insurance coverage shall be mailed, first class mail, or delivered in person to the last known address of the debtor.  
  All policy forms and certificates of insurance to be delivered or issued for delivery in this state and the schedules of premium rates pertaining to the policy forms or certificates shall be filed with the commissioner.   The commissioner shall within thirty (30) days after the filing of the policy forms and certificates of insurance disapprove a form that does not conform to this chapter or to other applicable provisions of the insurance statutes and regulations and shall, within thirty (30) days of filing, disapprove a schedule of premium rates pertaining to the form if it does not conform to the standard set forth in subsection (e).   If the commissioner disapproves a form or schedule of premium rates in accordance with subsection (b), the commissioner shall promptly notify the insurer in writing of the disapproval, and it shall be unlawful for the insurer to issue or use the form or schedule. In the notice, the commissioner shall specify the reasons for disapproval and state that a hearing will be granted upon request pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   Unless the commissioner disapproves the form or schedule of premium rates in accordance with subsections (b) and (c) or gives written approval of the form or schedule within thirty (30) days after the filing, the form or schedule shall be deemed approved on the thirty-first day after the filing.   The schedule of premium rates shall not be excessive, inadequate or unfairly discriminatory. In determining whether a schedule of premium rates is excessive, inadequate or unfairly discriminatory, the commissioner shall take into account past and prospective loss experience, general and administrative expenses, loss settlement and adjustment expenses, reasonable creditor compensation and other acquisition costs including insurance tracking costs, reserves, taxes, licenses, fees and assessments, reasonable insurer profit and other relevant data. Rates are not unfairly discriminatory because different premiums result for different policyholders, including group policyholders, with similar loss exposures but different expense factors or similar expense factors but different loss exposures, nor are rates unfairly discriminatory if they are averaged broadly among all persons insured in this state or all persons insured under a group insurance policy.   The commissioner may withdraw approval of an approved form or schedule of premium rates when the commissioner would be required to disapprove the form or schedule of premium rates if it were filed at the time of the withdrawal. The withdrawal shall be in writing and shall specify the reasons for withdrawal and the effective date of the withdrawal. An insurer adversely affected by a withdrawal may, within thirty (30) days after receiving the written notification of the withdrawal, request a hearing pursuant to the Uniform Administrative Procedures Act to determine whether the withdrawal should be annulled, modified or confirmed. Unless the commissioner grants an extension in writing in the withdrawal or subsequently grants an extension, the withdrawal shall, in the absence of a request for hearing, become effective, prospectively and not retroactively, on the ninety-first day following delivery of the notice of withdrawal and, if the request for hearing is filed, on the ninety-first day following delivery of written notice of the commissioner's determination.   Forms and rates filed and approved in accordance with this section shall be deemed to be in compliance in all respects with the laws of this state.   
  Within sixty (60) calendar days after the termination of creditor-placed insurance coverage, and in accordance with the formulas approved by the commissioner, an insurer shall refund any unearned premium or other identifiable charges.   Within sixty (60) calendar days after the termination date of creditor-placed insurance coverage, the insurer shall provide to the debtor a statement of refund disclosing the effective date, the termination date, the amount of premium being refunded and the amount of premium charged for the coverage provided. No statement shall be required in the event that the policy terminates pursuant to  56-49-104(b)(4).   The entire amount of premiums, minimum premiums, fees or charges of any kind shall be refunded if no coverage was provided.   
  In the event of a loss under the creditor-placed insurance policy, the insurer shall pay, at a minimum, the least of the following, the value of which shall be determined as of the date of loss:  The cost to repair the collateral less any applicable deductible;   The actual cash value of the collateral less any applicable deductible;   The net debt, less any applicable deductible. The method of calculation of net debt payable pursuant to this subdivision (a)(3) shall be identical to the method of calculation of net debt for payment of premiums pursuant to  56-49-105(a); or   If single interest insurance is provided, the amount by which the creditor's interest is impaired.     The net debt or actual cash value amounts in subsection (a) may be reduced by the value of salvage if the insurer does not take possession of the insured property.   In the event of a loss, no subrogation shall run against the debtor from the insurer.   Whenever a claim is made on a creditor-placed insurance policy, the insurer shall furnish to the claimant a written statement of the loss explaining the settlement amount and the method of settlement.   A creditor or insurer may not abandon salvage to a towing or storage facility in lieu of payment of storage fees without the consent of the facility and the claimant. The insurer shall be responsible for the payment of towing and storage charges for a covered loss occurrence from the time the claim is reported to the insurer in accordance with the terms of the policy to the time the claim is paid. The insurer shall give written notice to the claimant when the claim is paid that the claimant may incur storage charges after the date the claim is paid.   
  In order for the creditor to place insurance on the collateral pledged by the debtor and pass the cost of the insurance on to the debtor:  The creditor must have a security interest in the personal property;   The credit agreement must require the debtor to maintain insurance on the collateral to protect the creditor's interest;   The credit agreement must authorize the creditor to place the insurance if the debtor fails to provide evidence of the insurance; and   These requirements must be clearly disclosed to the debtor at the inception of the credit transaction.     The debtor shall always have the right to provide required insurance through existing policies of insurance owned or controlled by the debtor or of procuring and furnishing the required coverage through an insurer authorized to transact insurance within this state. However, a creditor may establish maximum acceptable deductibles, insurer solidity standards and other reasonable conditions with respect to the required insurance.   
  The entire amount of the premium due from a creditor shall be remitted to the insurer or its agent in accordance with the insurer's requirements. No commissions may be paid to, or retained by, a person or entity except a licensed and appointed insurance agent.   The retention by the creditor of unearned premiums upon cancellation of the insurance without crediting to the debtor's account the amount of unearned insurance charges is prohibited.   Rebates to the creditor of a portion of the premium charged to the debtor are prohibited as are other inducements provided to the creditor by an insurer or agent. The listing of the following activities as prohibited rebates or inducements is not intended to be restrictive, and the commissioner may identify an activity as prohibited by rule, regulation or order:  Allowing insurers or agents to purchase certificates of deposit from the creditor or to maintain accounts with the creditor at less than the market interest rates and charges that the creditor applies to other customers for deposit accounts of similar amounts and duration;   Paying a commission to a person, including a creditor, who is not appropriately licensed as an agent in this state; and   Purchasing or offering to purchase certificates of deposit from or maintaining or offering to maintain deposit accounts or investment accounts with a creditor as part of a creditor-placed insurance solicitation.     Prohibited rebates or inducements do not include:  The providing of insurance tracking and other services incidental to the creditor-placed insurance program;   The paying of commissions and other compensation to a duly licensed and appointed insurance agent, whether or not affiliated with the creditor;   The paying to the creditor policyholder of group experience rated refunds or policy dividends; or   The paying to the creditor of amounts intended to reimburse the creditor for its expenses incurred incidental to the creditor-placed insurance program, such as costs of data processing, mail processing, telephone service, insurance tracking, billing, collections and related activities; provided, that these payments are calculated in a manner that does not exceed an amount reasonably estimated to equal the expenses incurred by the creditor.     An insurer that pays commissions to creditor-related agents for creditor-placed insurance that are greater than twenty percent (20%) of the net written premium shall be required to demonstrate the commissions are not unreasonably high in relation to the value of the services rendered.   Nothing contained in this section shall prohibit or restrict an insurer or agent from maintaining a demand, premium deposit or other account or accounts with a creditor for which the insurer or agent provides insurance if the accounts pay the market interest rate and charges that the creditor applies to other customers for deposit accounts of similar amounts and duration.   
  A creditor shall not impose charges, including premium costs and related interest and finance charges, on a debtor for creditor-placed insurance coverage unless adequate disclosure of the requirement to maintain insurance has been made to the debtor. Adequate disclosure is accomplished if the following occurs:  The credit agreement sets forth the requirement that the debtor must maintain insurance on the collateral as provided for in  56-49-111;   The creditor makes reasonable efforts to notify the debtor of the requirement to maintain insurance and allows a reasonable time for compliance with this requirement;   A final notice as required by this chapter is sent to the debtor; and   If creditor-placed insurance coverage is issued, a copy of the policy or certificate is sent to the debtor as provided for in  56-49-107.     After adequate disclosure of the request to maintain insurance has been made to the debtor as required by this section, a creditor may proceed to impose charges for creditor-placed insurance if the debtor fails to provide evidence of insurance. A creditor may impose charges no earlier than ten (10) calendar days after sending the final notice.   Reasonable efforts to notify the debtor are accomplished if:  The creditor mails a notice by first class mail to the debtor's last known address as contained in the creditor's records, stating that the creditor intends to charge the debtor for creditor-placed insurance coverage on the collateral if the debtor fails to provide evidence of the property insurance to the creditor;   The creditor allows the debtor at least twenty (20) calendar days to respond to the notice and provide evidence of acceptable insurance coverage before sending a final notice; and   The creditor sends a final notice in compliance with this section by first class mail to the debtor's last known address as contained in the creditor's records at least ten (10) calendar days before the cost of insurance is charged to the debtor by the creditor. Proof of the mailing of the final notice shall be retained for at least three (3) years following the expiration or termination of the coverage or as otherwise required by law.     The initial notice shall be in a form determined by the creditor to remind the debtor of the requirement to maintain insurance on the collateral. The final notice shall be as complete as the following notice, printed in not less than twelve (12) point type, and modified where necessary to fit the nature of the credit transaction:  FINAL NOTICE   Your credit agreement with us requires you to have property insurance on the collateral until you pay off your loan. You have not given us proof you have insurance on the property. You can ask your insurance company or agent to give us proof of insurance or you can send us proof you have property insurance within ten (10) calendar days after the date this letter was postmarked. If you do not, we will buy the insurance and charge the cost to you.   You must pay for the property insurance we buy. It may cost more than insurance you can buy on your own. The cost of the insurance we buy may be added to your loan balance and we may charge you interest on it. If we do, you will pay interest at the same rate you pay on your loan.   The insurance we buy will pay claims to us (the creditor) for physical damage to your property. It will not pay any claims made against you (and it may not pay you for any claims you make [delete if limited dual interest coverage]). The insurance we buy will not give you any liability insurance coverage and will not meet the requirements of a state's financial responsibility law.   We may receive compensation for placing this insurance, which is included in the cost of coverage charged to you.   The property coverage we buy will start on the date shown in the policy or certificate, which may go back to the date of the loan or the date your prior coverage stopped. We will cancel the insurance we bought for you and give you a refund or credit of unearned charges if you give us proof you have bought property insurance somewhere else or if you have paid off the loan.    All creditor-placed insurance shall be set forth in an individual policy or certificate of insurance. Not earlier than the sending of the final notice nor fifteen (15) days after a charge is made to the debtor for creditor-placed insurance coverage, the creditor shall cause a copy of the individual policy, certificate or other evidence of insurance coverage evidencing the creditor- placed insurance coverage to be sent, first class mail, to the debtor's last known address.   A creditor's compliance with or failure to comply with this chapter shall not be construed to require the creditor to purchase insurance coverage on the collateral, and the creditor shall not be liable to the debtor or a third party as a result of its failure to purchase the insurance.   
  The commissioner may conduct investigations or examinations of insurers and agents to ensure compliance with and enforcement of this chapter or any rule, regulation or order under this chapter. The examination or investigation shall be conducted and subject to  56-1-411 and chapter 8, part 1 of this title.   The commissioner may by order, deny, suspend or revoke an insurer's certificate of authority or an agent's license if the commissioner finds that the insurer or agent has violated this chapter. Every hearing or other proceeding, except examinations or investigations conducted pursuant to this chapter, held under this chapter that determines or affects the legal rights, duties, or privileges of an insurer or an agent shall be deemed to be a contested case under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, and shall be conducted as required by that act, unless otherwise noted.   If the commissioner has reason to believe that any person or entity is engaging in any activity that would be a violation of this chapter or any rule promulgated under this chapter, the commissioner may issue an order directing that person or entity to cease and desist from committing the violations, impose a civil penalty for the violations, provide an equitable remedy for past violations, or any combination of these. The order may be issued without prior notice if the commissioner makes a finding that the order is necessary for the protection of policyholders and that the public health, safety, and welfare require the order to be issued without prior notice to affected parties. At any hearing or other proceeding conducted as a result of an order to cease and desist, pursuant to this chapter, the person or entity subject to the order shall be required to show cause why the order should be annulled, modified or confirmed.   Whenever it appears to the commissioner that any person or entity has engaged or is about to engage in an act or practice constituting a violation of any provision of this chapter or any rule, regulation or order under this chapter, the commissioner may, in the commissioner's discretion, bring an action in chancery court of any county in this state to enjoin the acts or practices and to enforce compliance with this chapter or any rule, regulation or order under this chapter. Upon a proper showing, a permanent or temporary injunction, restraining order, writ of mandamus, disgorgement, or other proper equitable relief shall be granted.   Additionally, upon a finding that any person or entity has violated a provision of this chapter, the commissioner may impose a civil penalty of not more than one thousand dollars ($1,000) for each violation, not to exceed in the aggregate one hundred thousand dollars ($100,000), unless the violation was committed flagrantly in conscious disregard of this chapter, in which case the penalty shall not be more than twenty-five thousand dollars ($25,000) for each violation, not to exceed in the aggregate two hundred fifty thousand dollars ($250,000).   Any person aggrieved by a final order of the commissioner under this chapter may obtain judicial review of the order in the chancery court of Davidson County by proceedings in accordance with the Uniform Administrative Procedures Act.   
 The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this chapter. All rules and regulations shall be promulgated in accordance with  the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 This part applies to all kinds of insurance written on risks in this state by any insurer authorized to do business in this state, except:   Life insurance;   Annuities;   Disability insurance;   Ocean marine insurance;   Reinsurance;   Aircraft liability and aircraft hull insurance;   Title insurance;   Credit life insurance; and   Credit accident and health insurance.   
 As used in this part, unless the context otherwise requires:   Advisory organization means any person or organization, other than a rate service organization, that assists insurers as authorized by  56-5-111;   Advisory prospective loss costs means historical aggregate losses and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time. Advisory prospective loss costs does not include provisions for profit or for expenses other than loss adjustment expenses;   Commercial risk insurance means insurance within the scope of this part that is not personal risk insurance;   Commissioner means the commissioner of commerce and insurance;   Joint underwriting means a voluntary arrangement established on an ad hoc basis to provide insurance coverage for a commercial risk pursuant to which two (2) or more insurers separately contract with the insured at a price and under policy terms agreed upon between the insurers;   Multiplier means a workers' compensation insurance company's determination of the profits and expenses, other than loss expense and loss adjustment expense, all other applicable rating factors, including, but not limited to, schedule rating, experience rating and small deductible credits, and deviation from advisory prospective loss costs associated with writing workers' compensation insurance, which shall be expressed as a single multiplicative factor to be applied equally and uniformly to the advisory prospective loss costs approved by the commissioner in making rates for all classification of risks utilized by the company;   Personal risk insurance means property and casualty insurance that provides:  Insurance on one (1) to four (4) family dwelling units, including mobile homes;   Individual insurance on household goods in dwellings, mobile homes, apartments, or other residential facilities;   Insurance on every kind of farm property or farm risk, including farm premises, buildings, machinery, equipment, motor vehicles, livestock, and other personal property used in farming operations;   Insurance on private passenger nonfleet motor-driven vehicles, not used for hire, which are used for personal, farm or family needs. The motor-driven vehicles include pickups, station wagons, vans, and vehicles with fewer than four (4) wheels;   Insurance on pleasure watercraft that are used for personal, farm or family needs; and   Insurance sold in connection with and incidental to rental agreements for a period not to exceed ninety (90) days;     Pool means a voluntary arrangement other than a residual market mechanism, established on an ongoing basis, pursuant to which two (2) or more insurers participate in the sharing of risks on a predetermined basis. The pool may operate through an association, syndicate or other pooling agreement;   Rate includes advisory prospective loss costs;   Rate service organization means any person or organization that assists insurers in ratemaking or filing as authorized by  56-5-110;   Rate service organization and advisory organization do not include joint underwriting organizations, actuarial, legal or other consultants, a single insurer, any employees of an insurer, or insurers under common control or management or their employees or managers;   Residual market mechanism means an arrangement, either voluntary or mandated by law, involving participation by insurers in the equitable apportionment among them of insurance that may be afforded applicants who are unable to obtain insurance through ordinary methods;   Supplementary rate information includes any manual or plan of rates, classification, rating schedule, minimum premium, policy fee, rating rule, loss adjustment expense, including defense costs incurred for any reason under the policy, and any other similar information needed to determine the applicable rate in effect or to be in effect; and   Supporting information means:  The experience and judgment of the filer and the experience or data of other insurers or organizations relied upon by the filer;   The interpretation of any statistical data relied upon by the filer;   A description of methods used in making the rates; and   Other similar information relied upon by the filer.     
  General.  Rates:  Shall not be excessive, inadequate or unfairly discriminatory; or   In the case of an advisory prospective loss costs filing, shall reasonably reflect projected losses and loss adjustment expenses.     Excessiveness.  A rate is excessive if it is likely to produce a profit that is unreasonably high for the insurance provided or if the expense provision included in the rate is unreasonably high in relation to the services rendered.   Inadequacy.  A rate is not inadequate unless the rate is clearly insufficient to sustain projected losses and expenses in the class of business to which it applies and the use of the rate has or, if continued, will have the effect of substantially lessening competition or the tendency to create a monopoly.   Unfair Discrimination.  Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with like loss exposures with different expenses, or like expenses but different loss exposures, so long as the rate reflects the differences with reasonable accuracy.   
 In determining whether rates comply with the standards set forth in  56-5-103, the following criteria shall apply:   Basic Factors in Rates.  Due consideration shall be given to:  Past and prospective loss and expense experience within and outside this state;   Catastrophe hazards;   Any residual market loss redistributions and other similar obligations;   A reasonable provision for profit and contingencies;   Trends within and outside this state;   Loadings for leveling premium rates over a reasonable period of time or for dividends or savings to be allowed or returned by insurers to their policyholders, members or subscribers; and   All other relevant factors, including the judgment of the filer;     Classification.  Risks may be classified in any reasonable way for the establishment of rates except that no risks may be grouped by classifications based in whole or in part on race, color, creed, or national origin of the risk. Rates may be modified for individual risks in accordance with rating plans or schedules that provide for recognition of probable variations in hazards, expenses or both; and   Expenses.  The systems of expense provisions included in rates for use by an insurer or group of insurers may differ from those of other insurers or group of insurers to reflect the operating methods of the insurer, or group with respect to any kind of insurance, or with respect to any subdivision or combination of kinds of insurance.   
  Every insurer of personal risk insurance shall file with the commissioner all rates, supplementary rate information, supporting information, policy forms, and endorsements at least thirty (30) days before the proposed effective date.   The commissioner may give written notice, within thirty (30) days of the receipt of the filing, that the commissioner needs additional time, not to exceed thirty (30) days from the date of the notice, to consider the filing.   Upon written application by the insurer, the commissioner may authorize rates to be effective before the expiration of the waiting period or an extension of the waiting period.    A filing shall be deemed to meet the requirements of this part and to become effective unless disapproved by the commissioner before the expiration of the waiting period or an extension of the waiting period.   Whenever a filing made pursuant to this section is not accompanied by sufficient supporting information, the commissioner shall inform the insurer as to what information is required to complete the filing.   The filing shall not be deemed to be made until the information is furnished.     
   Except as provided in subsections (b), (c), and (d), every insurer of commercial risk insurance shall file with the commissioner all rates, supplementary rate information, policy forms and endorsements, not later than fifteen (15) days after the effective date; provided, that the rates, supplementary rate information, policy forms and endorsements need not be filed for inland marine risks that by general custom of the business are not written according to manual rules of rating plans. Upon request of the commissioner, supporting information shall also be filed.   The commissioner may, after a hearing providing not less than twenty (20) days' written notice to the insurer, disapprove any policy form or endorsement already in effect if it does not comply with the law or with rules adopted pursuant to this part or if it contains any provision that is unfair, deceptive or misleading. The disapproval order shall specify the reasons for the commissioner's findings and the date, not less than thirty (30) days after issuance of the order, when the disapproval is effective, and it shall thereafter be unlawful for the insurer to use the form or endorsement in this state.      The following insurance coverages are exempt from filing requirements with respect to rates, supplementary rate information, policy forms, and endorsements, where applicable under this chapter, whether the insurance coverage is endorsed to or sold as a stand-alone policy:  Boiler and machinery;   Environmental impairment or pollution liability;   Kidnap and ransom;   Political risk or expropriation;   Employment practices liability;   Media liability; and   Product liability, product recall, and completed operations.     The exemption from filing requirements in this subsection (b) does not affect any other requirements of this title, including those applicable to cancellation of commercial insurance policies.   The insurer shall deliver to the insured and the producer of record a copy of a policy issued pursuant to this subsection (b). The policy may be delivered to the applicant or policyholder electronically and must contain a disclaimer in language the same as or substantially similar to the following:  The rate provided for in this policy and all forms utilized are exempt from the filing requirements of Tenn. Code Ann.  56-5-106.      With respect to workers' compensation insurance, a rate service organization designated by one (1) or more insurers shall develop and file for approval with the commissioner in accordance with this section, a filing on behalf of authorized insurers containing advisory prospective loss costs and supporting actuarial and statistical data for workers' compensation insurance, including loss adjustment expenses. An advisory prospective loss costs filing shall become effective only when approved pursuant to  50-6-402.   Each workers' compensation insurer, or group of insurers under common ownership, shall individually file with the commissioner the multiplier and supporting information not later than fifteen (15) days after the effective date, and at least annually thereafter on March 1. Multipliers shall apply to the most recently approved, currently effective advisory prospective loss cost.   All multipliers filed pursuant to subsection (d) shall be actuarially justified and shall be certified by a member in good standing of the Casualty Actuarial Society.   
  Filings Open to Inspection.  All rates, supplementary rate information, policy forms, endorsements, and any supporting information filed under this part shall, as soon as filed, be open to public inspection at any reasonable time, except any information that is a trade secret under the Uniform Trade Secrets Act, compiled in title 47, chapter 25, part 17, as determined by the commissioner in the commissioner's sole discretion. The insurer or filer shall have the burden of asserting to the commissioner that the information is a trade secret. Insurers may file certain information with the commissioner for a determination as to whether it would be held to be a trade secret under this subsection (a). Such information shall not be made public during the pendency of the review. Should it be determined that such information is not trade secret information, then the commissioner shall return such information to the insurer or filer. Copies of public information may be obtained by any person on request and upon payment of a reasonable charge.   Consent to Rate.  Notwithstanding any other provisions of this part, upon written application of an insured, stating specific reasons why a risk requires higher than standard rates on file by an insurer, a rate in excess of that provided by a filing otherwise applicable may be used on a specific risk. An endorsement shall be attached to the policy, giving the reasons and the percentage of surcharge. A copy of the endorsement shall be kept by the insurer and its agent. The copies shall be made available to the commissioner upon request for review to determine that the rates are not excessive, inadequate or unfairly discriminatory.   Residual Market Mechanism.  No filing, whether personal or commercial risk, shall be used for a residual market mechanism until it has become effective pursuant to  56-5-105.   Rate Service Organization Filings.   The filings required by  56-5-105 and 56-5-106, except  56-5-106(d), including advisory prospective loss costs, other than rates for policies issued pursuant to any residual market mechanism for workers' compensation insurance established under  56-5-114, may be made by a rate service organization designated by an insurer.   The filings required by  56-5-106 for rates for policies issued pursuant to any residual market mechanism established under  56-5-114 for workers' compensation insurance shall be made by a rate service organization designated by the commissioner.     An insurer may make a filing, for lines other than workers' compensation, in compliance with  56-5-105 and 56-5-106 and by giving written notice to the commissioner that the insurer is following rates as filed by a rate service organization in a particular line with any exceptions clearly set forth as are necessary to fully inform the commissioner.     Reference Filings.  An insurer may file by reference to rates, supplementary rate information, supporting information, and policy forms and endorsements filed by and effective for another insurer or a rate service organization.   Number of Rate Filings.  A company shall not be limited in the number of rate filings which a company may file in any one (1) calendar year; however, should a company make more than one (1) rate filing in one (1) calendar year for a single type of insurance coverage, the company shall pay to the commissioner for each additional rate filing the fee of two hundred fifty dollars ($250) as well as all costs incurred by the commissioner for an actuarial review of the rate filing. The fee provided for by this subsection (f) and cost requirements shall not apply to advisory prospective loss cost filings by the commissioner's designated rate service organization.   
  Basis for Disapproval.  The commissioner shall disapprove a rate if:  The commissioner finds that the rate is excessive, inadequate or unfairly discriminatory; or   In the case of an advisory prospective loss costs filing, the commissioner finds the filing does not reasonably reflect projected losses, including loss adjustment expenses. For an advisory prospective loss costs filing the commissioner may also modify the filing as permitted by  50-6-402(b).     Disapproval Procedure.  If the commissioner disapproves or modifies a filing, the commissioner shall issue a written order specifying in what respect that the rate proposed in the filing is excessive, inadequate or unfairly discriminatory or otherwise fails to meet the requirements of this part. The person making the filing shall be given a hearing upon written request made within thirty (30) days after the disapproval or modification order.   If the commissioner disapproves rates already in effect, the commissioner shall issue the order only after a hearing held on not less than twenty (20) days' written notice to the insurer or rate service organization that made the filing. The order shall be issued within fifteen (15) days after the close of the hearing and shall specify in what respects the rates fail to meet the requirements of this part. The order shall also state when, within a reasonable period of time, but not less than forty-five (45) days, the further use of the rate in contracts of insurance made thereafter shall be prohibited. The order may include a provision for premium adjustment for policies issued, renewed or nonrenewed after the effective date of the order. In disputes concerning a multiplier, the insurer shall have the burden of persuasion that the commissioner's disapproval, modification, or failure to approve was inappropriate.     Interim Rates.  Whenever an insurer has no legally effective rates as a result of the commissioner's disapproval of rates or other act, the commissioner shall on request of the insurer specify interim rates for the insurer that are high enough to protect the interests of all parties, and may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds to policyholders that are de minimis  shall not be required.   
  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.   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.   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:  For individuals who are not employees; or   On the basis of improper classification of employees.     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.   
  License Required.  No rate service organization shall provide any service relating to the rates of any insurance subject to this part, and no insurer shall utilize the services of the organization for those purposes unless the organization has obtained a license under subsection (d).   Authorized Activities.  Any licensed rate service organization may:  Collect, compile, and furnish loss or expense statistics;   Recommend, make or file rates or supplementary rate information;   Advise about rate questions and provide supporting information for rates;   Develop, recommend or file policy provisions or forms, coverages, classifications, and statistical plans;   Make inspections, surveys and audits;   Conduct research and on-the-site inspections in order to prepare classifications of public fire defenses;   Provide actuarial, statistical and administrative services to insurers and insurer-supported organizations;   Conduct and report on the content of research projects; and   Furnish any other services related to those enumerated in this subsection (b).     Availability of Services.  No rate service organization shall refuse to supply any services for which it is licensed in this state to any insurer authorized to do business in this state and offering to pay the fair and usual compensation for the services, nor shall a rate service organization require the purchase of any specific services as a condition to obtaining the services sought; provided, that the furnishing of the requested services does not place an unreasonable burden on the rate service organization.   Licensing.  Application.  A rate service organization applying for a license shall include with its application:  A copy of its constitution, articles of association or incorporation, bylaws, and any other rules or regulations governing the conduct of its business;   A list of its members and subscribers;   A service and acknowledgment of service of process as provided for insurance companies under  56-2-501; and   A statement showing its technical qualifications.     Granting of a License.  If the commissioner finds that the applicant is qualified, the commissioner shall issue a license specifying the kinds of insurance or subdivisions of kinds of insurance for which the applicant is authorized to act as a rate service organization. Every application shall be granted or denied in whole or in part by the commissioner within sixty (60) days after the date of its filing. Licenses issued pursuant to this section shall remain in effect until suspended or revoked by the commissioner. The fee for the license shall be one hundred dollars ($100).     
  Registration Required.  No advisory organization shall provide any service relating to the rates of any insurer subject to this part, and no insurer shall utilize the services of the organization for those purposes unless the organization has registered under subsection (d).   Authorized Activities.  A registered advisory organization may perform any of the authorized activities enumerated in  56-5-110(b) except no advisory organization may make any filings on behalf of insurers.   Availability of Services.  No advisory organization shall refuse to supply any authorized services for which it is registered in this state to any insurer authorized to do business in this state and offering to pay the fair and usual compensation for the services, nor shall an advisory organization require the purchase of any specific services as a condition to obtaining the services sought; provided, that the furnishing of the requested services does not place an unreasonable burden on the advisory organization.   Form of Registration.  Registration.  An advisory organization shall submit, at the time of registration:  A copy of its constitution, articles of association or incorporation, bylaws, and any other rules or regulations governing the conduct of its business;   A list of its members and subscribers;   A service and acknowledgment of service of process as provided for insurance companies under  56-2-501;   An agreement that the commissioner may examine each advisory organization in accordance with   56-5-115; and   A fee for registration in the amount of one hundred dollars ($100).     Prohibited Activities.  If after a hearing the commissioner finds that any activity or practice of any advisory organization is unfair, unreasonable or otherwise inconsistent with this part, the commissioner shall specify the finding in an order requiring the discontinuance of the activity or practice.     
  Insurers shall file with the commissioner, and the commissioner shall review, reasonable rules and plans for recording and reporting of loss and expense experience in appropriate form and detail. The commissioner may designate one (1) or more rate service organizations or advisory organizations to assist in gathering the experience and making compilations. No insurer shall be required to record or report its experience on a classification basis inconsistent with its own rating system; provided, that for workers' compensation insurance, all insurers shall use the classification system and statistical plan of the rate service organization designated by the commissioner.   The commissioner and every insurer, rate service organization and advisory organization may exchange information and experience data with insurance regulatory officials, insurers, rate service organizations and advisory organizations in this and other states and may consult with them with respect to ratemaking and the application of rating systems.   
  Except as provided in this chapter, no insurer may agree with any other insurer or with a rate service organization or an advisory organization to adhere to or use any rate or supplementary rate information. The fact that any insurer adheres to or uses the material is not sufficient in itself to support a finding that an agreement to adhere or use exists but may be used for the purpose of supplementing other evidence as to the existence of the agreement. Two (2) or more insurers having common ownership or operating in this state under common management or control may act in concert between or among themselves in the same manner as if they constitute a single insurer.   Any workers' compensation insurer may make written application to the commissioner for approval on its behalf of a deductible plan where the insurer can be reimbursed by the policyholder, effective for a period of not less than one (1) year, to be applied to the rates or premiums, or both, produced by the rating system. The application shall specify the basis for the modification and a copy of the application shall also be sent simultaneously to the rate service organization. The commissioner shall approve the modification for the insurer if the commissioner finds it to be justified. The commissioner shall not approve the modification if the commissioner finds that the resulting premiums would be excessive, inadequate or unfairly discriminatory.   Notwithstanding any other provision in this chapter, the commissioner may approve any rating plan submitted by a captive insurance company that is formed under chapter 13 of this title and is authorized to provide workers' compensation coverage, so long as the captive insurance company demonstrates to the commissioner's satisfaction that the proposed rating plan does not endanger the solvency of the company and adequately protects the insureds.   
  Authorization.  Notwithstanding  56-5-113(a), insurers participating in joint underwriting, pools or residual market mechanisms may, in connection with the activity, act in cooperation with each other in the making of rates, supplementary rate information, policy forms, underwriting rules, surveys, inspections and investigations, the furnishing of loss and expense statistics or other information, and in the conduct of research. Joint underwriting, pools and residual market mechanisms shall not be deemed rate service or advisory organizations.   Regulation.  Except to the extent modified by this section, insurers participating in joint underwriting, pool or residual market mechanisms are subject to this part.   Every pool shall file with the commissioner:  A copy of its constitution, articles of association or incorporation, bylaws, and any other rules or regulations governing its activities;   A list of its members;   The name and address of a resident of this state upon whom notices or orders of the commissioner or process may be served; and   Any changes in the filings under subdivisions (b)(2)(A)-(C).     Any residual market mechanism, plan or agreement to implement the mechanism, and any amendments to the mechanism, plan or agreement, shall be submitted in writing to the commissioner for approval, together with such information as the commissioner may reasonably require.   If, after a hearing, the commissioner finds that any activity or practice of insurers participating in joint underwriting, pool or residual market mechanisms is unfair, unreasonable or otherwise inconsistent with this part, the commissioner shall issue a written order specifying in what respects the activity or practice is unfair, unreasonable or otherwise inconsistent with this part and require the discontinuance of the activity or practice.      The commissioner shall implement a plan as soon as possible for the equitable apportionment among insurers of applicants for workers' compensation insurance who are in good faith entitled to such insurance, but who are unable to procure it through ordinary methods. The plan shall provide reasonable rules governing the equitable distribution of risks by direct assignment, reinsurance, or otherwise, and their assignment to insurers, and shall provide a method whereby applicants for insurance, insured, and insurers may have a hearing on grievances and the right of appeal to the commissioner.   Notwithstanding  56-5-113(a), every insurer, except those entities under  50-6-405(a)(2) and (c) that qualify under  50-6-401 or  50-6-405, and those entities under title 50, chapter 6, part 6, undertaking to transact in this state the business of either workers' compensation or employer's liability insurance, or both, and every rating organization that files rates or prospective loss costs for such insurance shall participate in the plan. No insurer shall thereafter issue a policy of workers' compensation or employer's liability insurance or undertake to transact that business in this state unless the insurer participates in the plan.    No later than July 1 of each year, the commissioner shall determine whether the membership of the assigned risk pool, created pursuant to this subsection (c), for the prior calendar year exceeds fifteen percent (15%) of the membership of the eligible employer market, as based on premium, excluding self-insured employers and self-insured groups. For any period in which it is determined the membership of the assigned risk pool exceeds fifteen percent (15%) of the membership of the eligible employer market, the commissioner shall issue a report to the advisory council on workers' compensation setting forth the percentage of the eligible employer market insured through the assigned risk pool and the reasons contributing to increased membership of the pool. The report shall include recommendations as to whether:   The competitive state workers' compensation insurance fund, established by title 50, chapter 6, part 6, should be activated;   A plan of direct assignment on a randomized basis of all assigned risk plan policies to insurers offering workers' compensation insurance subject to subdivision (c)(4) should be implemented;   Other actions should be taken; or   No action should be taken.     The advisory council shall have ninety (90) days to provide written comments to the commissioner regarding the report and recommendations. After receipt of the advisory council's comments and recommendations, the commissioner shall take action deemed appropriate; provided, that the commissioner shall hold a hearing before electing to activate the competitive state workers' compensation insurance fund or to institute a plan of direct assignment.     If a direct assignment plan becomes operational, pursuant to this section, then the commissioner shall structure the randomized assignment so that small insurers do not bear a disproportionate share of risk in the market. A plan of direct assignment shall include provisions to provide that insurers who depopulated the assigned risk pool in the preceding five (5) years receive applicable take out credits to be used in determining the appropriate level of policies to be assigned to the insurers.   If the commissioner elects to make the competitive state workers' compensation fund operational pursuant to subdivision (c)(3), then the fund shall not be required to meet the reserve requirements for a domestic insurance company for the first seven (7) years of operation as otherwise required by  50-6-601 and 50-6-603. The commissioner shall promptly notify the governor, and the speakers of the senate and the house of representatives of the election.      On and after January 1, 1997, the plan developed under this subsection (c) shall assign an insured in this plan to one (1) of three (3) subplans. Those subplans are:  The small employer plan, for insureds not eligible for experience rating;   The special risk plan, for insureds that are employers whose experience modifications are one and ten hundredths (1.10) or less; and   The safety incentive plan, for all other risks.     The commissioner is authorized to establish increasing levels of premium surcharges for employers with experience modification factors in excess of one and ten hundredths (1.10). The surcharges may not exceed fifty percent (50%) for employers with modification factors in excess of two and zero hundredths (2.00).     The advisory prospective loss cost for subdivisions (c)(6)(A)(i)(a ) and (b ) may not exceed that approved by the commissioner for the voluntary market. The commissioner shall annually establish the multiplier to be applied to the advisory prospective loss cost for the assigned risk plan. In establishing the multiplier, the commissioner shall consider the estimated cost of providing required services pursuant to this subsection (c) and the level of the multipliers in the voluntary market.      The commissioner shall not approve a plan pursuant to this subsection (c) that does not provide for the making available of a list of the employers insured under this subsection (c) on request to interested persons for a reasonable fee or to the department. A reasonable fee shall only include the cost of production and mailing the list.   As part of the application for insurance coverage, an employer shall elect whether to be excluded from the list provided for by this subsection (c). Every application for the assigned risk plan shall include the following language:  THE INSURED ELECTS TO BE EXCLUDED FROM THE LIST OF EMPLOYERS IN THE ASSIGNED RISK PLAN:   YES  NO        
  The commissioner may examine any insurer, advisory organization, rate service organization, pool or residual market mechanism to ascertain compliance with this part.   Every insurer, advisory organization, rate service organization, pool and residual market mechanism shall maintain records of the type and kind reasonably adapted to its method of operation. The records shall contain the experience, data, statistics and other information collected or used by it in its activities. These records shall be available for examination or inspection by the commissioner at any time upon reasonable notice.   The cost of an examination made pursuant to this section shall be paid by the examined party in the same manner as provided by  56-1-413.   The commissioner may accept the report of an examination made by the insurance supervisory official of another state in lieu of an examination under this section.   
 Nothing in this part shall be construed to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers. A plan for the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers shall not be deemed a rating plan.  
  If the commissioner finds that any person or organization has violated this part, the commissioner may impose a penalty of not more than five hundred dollars ($500) for each violation, to be recovered for the use of the state in a civil action brought in the name of the state by the commissioner in a court of competent jurisdiction. Technical violations arising from systems or computer errors of the same type shall be treated as a single violation. In the event of an overcharge, if the insurer makes restitution, including payment of interest, no penalty shall be imposed.   The commissioner may, in lieu of subsection (a), impose a civil penalty after notice and hearing in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, if the commissioner finds that any person or organization has violated this part. This civil penalty shall not exceed five hundred dollars ($500) for each violation as provided for in subsection (a).   The commissioner has the discretion to abate the part of the penalty in this section that the facts of the particular case warrant and to bring suit for a lesser amount that may be determined, or to accept the lesser amount in settlement of the state's claim for penalties. Any abatement or settlement of the penalties by the commissioner shall be with the consent and approval of the attorney general and reporter.   The commissioner may suspend the license of any rate service organization or insurer for failure to comply with an order of the commissioner within the time limited by the order, or any extension of the time that the commissioner may grant. The commissioner may determine when a suspension of license becomes effective and it shall remain in effect for the period fixed by the commissioner, unless the commissioner modifies or rescinds the suspension, or until the order upon which the suspension is based is modified, rescinded, or reversed.   No license shall be suspended except upon a written order of the commissioner, stating the commissioner's findings, made after a hearing held upon not less than ten (10) days' written notice to the person or organization, specifying the alleged violation.   
 Review of any order issued by the commissioner shall be in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. Where the order of the commissioner results in an increase or decrease in rates, any insurer affected by the increase or decrease may, with leave of court, pending final disposition of the proceedings in the chancery court, continue to charge rates that were obtained prior to the order of decrease, or may charge rates resulting from the order of increase on condition that the difference in the premiums be deposited in a special account by the insurer or paid to the holders of policies issued after the order of the commissioner, as the court may determine.  
 It is the intent of the general assembly that the advisory prospective loss costs system for workers' compensation insurance be implemented with the goal of providing long-term stability in the workers' compensation insurance market.  
  The commissioner may designate a rate service organization to assist in gathering, compiling and reporting relevant workers' compensation insurance statistical information. If the commissioner makes the designation, every workers' compensation insurer shall record and report its workers' compensation insurance experience to the designated rate service organization as set forth in the uniform statistical plan approved by the commissioner and if requested shall file a copy of the report with the commissioner.   Each workers' compensation insurer shall be a member of the workers' compensation insurance rate service organization. Each workers' compensation insurer shall adhere to the policy forms and rating rules filed by the designated rate service organization.   Every workers' compensation insurer shall adhere to a uniform classification system and uniform experience and retrospective rating plans that have been filed with the commissioner by the designated rate service organization and approved by the commissioner.   Subject to the approval of the commissioner, the rate service organization shall develop and file rules reasonably related to the recording and reporting of data pursuant to the uniform statistical plan, uniform experience rating plan and the uniform classification system.   For workers' compensation insurance provided in the voluntary market, no schedule rating plan shall limit its application to any risk based on premium size or eligibility for experience rating; provided, that the application for the plan to any individual risk shall not result in the premium for the risk being less than the classification minimum premium established for workers' compensation insurance.   
  Reasonable rules and plans may be promulgated by the commissioner for the interchange of data necessary for the application of rating plans.   In order to further conform administration of rate regulatory laws, the commissioner and every insurer and the advisory organization designated by the commissioner may exchange information and experience data with insurance supervisory officials, insurers and advisory organizations in other states and may consult with them with respect to rate making and the application of rating systems.   Cooperation among advisory organizations, or among advisory organizations and insurers in rate making or in other matters within the scope of this chapter is authorized, but the filings resulting from the cooperation are subject to this chapter. The commissioner, with the assistance of the attorney general and reporter, may review the cooperative activities and practices. If after a hearing the activity or practice is found to violate this chapter, the commissioner may issue a written order specifying that the activity or practice violates this chapter and requiring the discontinuance of the activity.   
  For purposes of this section:  Exempt commercial risk policyholder means an insured that either employs the services of an insurance producer licensed in property or casualty lines of authority or procures commercial risk insurance with the services of a full-time risk manager, and:  Is a city, county, or metropolitan government with a population of at least fifty thousand (50,000), according to the 2010 federal census or any subsequent census;   Is this state;   Is a not-for-profit organization or a public entity with an annual budget of at least twenty-five million dollars ($25,000,000) in the preceding fiscal year; or   Is a commercial risk policyholder that annually certifies to the department on a form designated by the department that the policyholder:   Possesses a net worth of more than ten million dollars ($10,000,000) at the time the policy of insurance is issued;   Generated net revenue or sales of more than fifteen million dollars ($15,000,000) in the preceding fiscal year;   Employs more than twenty-five (25) employees per individual company or fifty (50) employees per holding company at the time the policy of insurance is issued; and   Paid annual aggregate insurance premiums of at least two hundred thousand dollars ($200,000) in the preceding fiscal year of commercial risk insurance as defined in  56-5-102, excluding any premiums paid for accident and health insurance and workers compensation and employer's liability insurance as defined in  56-2-201; and       Risk manager means a person who:  Holds an Accredited Advisor in Insurance (AAI) or Associate in Risk Management (ARM) designation for property and casualty lines of authority;   Holds a risk management in insurance degree from an accredited college or university for property and casualty lines of authority; or   Is qualified by experience, as determined by the commissioner.       Section 56-5-106(a) does not apply to a commercial risk policy issued to an exempt commercial risk policyholder by an insurer of commercial risk insurance.   An insurer of commercial risk insurance is subject to the penalties provided in  56-2-305 if the:  Insurer does not comply with  56-5-106(a) relative to a commercial risk insurance policy issued to a commercial risk policyholder; and   Policyholder has not filed a certification as required by subdivision (a)(1)(D).     The certification form filed by a commercial risk policyholder pursuant to subdivision (a)(1)(D) shall be confidential and not subject to title 10, chapter 7, part 5.   Any application or policy issued to an exempt commercial risk policyholder must contain a disclaimer in language the same as or substantially similar to the following:  The rate provided for in this policy and all forms utilized are exempt from the filing requirements of Tenn. Code Ann.  56-5-106.    
  Within ten (10) business days of receipt of a written request from an insured or an insured's designee, a commercial lines insurer shall furnish directly to the person designated in the request, a copy of the insured's loss run history for up to the previous three (3) years, or complete loss run history with the insurer if the history is less than three (3) years. A written request includes communications made by email or fax. For the purposes of this section, receipt means receipt by an individual or entity designated by an insurer to receive loss run history requests.   If the insurer fails to provide the requested information within the time allowed in this section, the failure shall be a violation of the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title, and any requestor may seek enforcement and any remedies allowed pursuant to that chapter. The commissioner may take action in accordance with  56-2-305 for the violation of subsection (a).   Notwithstanding this part to the contrary, no insurer shall charge any fees to prepare and furnish one (1) three-year loss run history. However, if the insurer provides the loss run history via electronic means, then the insurer may charge a reasonable fee to provide a hard copy of the same report.   
 As used in this part, unless the context otherwise requires:   Adverse action means a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of personal insurance. An offer of placement with an affiliate insurer does not constitute adverse action, a refusal to insure, cancellation or nonrenewal of coverage;   Affiliate means any company that controls, is controlled by, or is under common control with another company;   Consumer means an insured whose credit information is used or whose insurance score is calculated in the underwriting or rating of a personal insurance policy or an applicant for the policy;   Consumer reporting agency means any entity that, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties;   Credit information means any credit-related information derived from a credit report, found on a credit report itself, or provided on an application for personal insurance. Information that is not credit-related shall not be considered credit information, regardless of whether it is contained in a credit report or in an application, or is used to calculate an insurance score;   Credit report means any written, oral, or other communication of information by a consumer reporting agency bearing on a consumer's creditworthiness, credit standing or credit capacity that is used or expected to be used or collected in whole or in part for the purpose of serving as a factor to determine personal insurance premiums, eligibility for coverage, or tier placement;   Insurance score means a number or rating that is derived from an algorithm, computer application, model, or other process that is based in whole or in part on credit information for the purposes of predicting the future insurance loss exposure of an individual applicant or insured; and   Personal insurance, for the purposes of this part, means private passenger automobile, homeowners, motorcycle, manufactured home owners, noncommercial dwelling fire insurance, boat, personal watercraft, and recreational vehicle policies when those policies are individually underwritten for personal, family or household use.   
 An insurer authorized to do business in this state that uses credit information to underwrite or rate risks for personal insurance shall not:   Take an adverse action against a consumer based on credit information, unless an insurer obtains and uses a credit report issued or an insurance score calculated within ninety (90) days from the date the personal insurance policy is first written or renewal is issued;    Use credit information unless no later than thirty-six (36) months following the last time that the insurer obtained current credit information for the insured, the insurer recalculates the insurance score or obtains an updated credit report. The insurer is not required to comply with this subdivision (2) if:   The insured is in the most favorably-priced tier of the insurer or within a group of affiliated insurers, for the type of policy covering the insured;   If the insurer has determined not to use credit information in its re-evaluation of the insured upon renewal; or   If the insurer provides a notice to the insured on an annual basis of the insured's right to voluntarily request that their insurance credit score be rerun and reevaluated based on the current information available for the next effective renewal date of the insured's policy. A notice provided under this section shall be in writing in clear and concise language and shall not contain any information other than what is necessary to notify the insured of this right. An insurer need not recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once every twelve (12) months;     Nothing in subdivision (2)(A) shall be deemed to require any insurer to use credit information in rating or underwriting. The commissioner may promulgate rules to effectuate this section;     Use the following as a negative factor in any insurance scoring methodology or in reviewing credit information for the purpose of underwriting or rating a policy of personal insurance:  Credit inquiries not initiated by the consumer or inquiries requested by the consumer for each person's own credit information;   Inquiries relating to insurance coverage, if so identified on a consumer's credit report;   Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the home mortgage industry and made within thirty (30) days of one another, unless only one (1) inquiry is considered;   Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry and made within thirty (30) days from one another, unless only one (1) inquiry is considered; or   Collection accounts with a medical industry code, if so identified on the consumer's credit report;     Deny, cancel or nonrenew a policy of personal insurance solely on the basis of credit information, without consideration of any other applicable underwriting factor independent of credit information;   Base an insured's renewal rates for personal insurance solely upon credit information, without consideration of any other applicable factor independent of credit information;   Take an adverse action against a consumer solely because the consumer does not have a credit account, without consideration of any other applicable factor independent of credit information;   Consider an absence of credit information or an inability to calculate an insurance score in underwriting or rating personal insurance, unless the insurer either treats the consumer as if the consumer had neutral credit information as defined by the insurer or unless the insurer treats the consumer in a manner otherwise approved by the commissioner of commerce and insurance; and   Use an insurance score that is calculated using income, gender, address, ethnic group, religion, marital status, nationality, education, or occupation of the consumer as a factor. Nothing in this subdivision (8) shall preclude an insurer from underwriting personal insurance on the basis of information in the insurance application that is not credit information.   
 If an insurer takes an adverse action based on factors that include credit information, the insurer must provide notice to the consumer that an adverse action has been taken. That notice must contain the reason or reasons for the adverse action, described in sufficiently clear and specific language so that a person can identify the basis for the insurer's decision to take an adverse action. The notice must include a description of up to four (4) factors that were the primary influences of the adverse action. The use of generalized terms such as poor credit history, poor credit rating, or poor insurance score does not meet the explanation requirements of this section. Standardized credit explanations provided by consumer reporting agencies or other third party vendors are deemed to comply with this section.  
 An insurer shall indemnify, defend, and hold an insurance producer harmless from and against all liability, fees and costs arising out of or relating to the actions, errors or omissions of an insurance producer who obtains or uses credit history or insurance scores, or both, for an insurer, provided the insurance producer follows the instructions of or procedures established by the insurer and complies with any applicable law or act. Nothing in this section shall be construed to provide an applicant or insured with a cause of action that does not exist in the absence of this section.  
 Insurers that use insurance scores to underwrite or rate risks must file their scoring models or other scoring processes with the department of commerce and insurance. A filing that includes insurance scoring shall include loss experience justifying the use of credit information. The filings shall be kept confidential by the commissioner of commerce and insurance and shall not be construed to be a public record pursuant to title 10, chapter 7.  
 If it is determined through the dispute resolution process set forth in the federal Fair Credit Reporting Act (15 U.S.C.  1681i(a)(5)), that the credit information of a current insured was incorrect or incomplete and if the insurer receives notice of the determination from either the consumer reporting agency or from the insured, the insurer shall re-underwrite and re-rate the consumer within thirty (30) days of receiving the notice. After re-underwriting or re-rating the insured, the insurer shall make any adjustments necessary, consistent with its underwriting and rating guidelines. If an insurer determines that the insured has overpaid the premium, the insurer shall refund to the insured the amount of overpayment calculated back to the shorter of either the last twelve (12) months of coverage or the actual policy period.  
  If an insurer writing personal insurance uses credit information in underwriting or rating a consumer, the insurer or its agent shall disclose, either on the insurance application or at the time the insurance application is taken, that it may obtain credit information in connection with the application. The disclosure shall be either written or provided to an applicant in the same medium as the application for insurance. The insurer need not provide the disclosure statement required under this section to any insured on a renewal policy, if the consumer has previously been provided a disclosure statement.   Use of the following example disclosure statement constitutes compliance with this section: In connection with this application for insurance, we may review your credit report or obtain or use a credit-based insurance score based on the information contained in that credit report. We may use a third party in connection with the development of your insurance score.   
 This part applies to personal risk insurance written on risks in this state by any insurer authorized to do business in this state.  
  Notwithstanding the requirements of this title, a filing made by an insurer for personal risk insurance under this part that provides for an overall statewide rate increase or decrease of no more than fifteen percent (15%) in the aggregate for all coverages that are subject to the filing may take effect the date it is filed. The fifteen-percent limitation does not apply on an individual insured basis. No more than one (1) rate filing may be made by an insurer pursuant to the expedited process provided in this section during any twelve-month period, unless a rate filing, when combined with any other rate filing or filings made by an insurer within the preceding twenty-five (25) months, does not result in an overall statewide increase or decrease of more than fifteen percent (15%) in the aggregate for all coverages that are subject to the filing.   Rate filings falling outside of the limitation provided for in subsection (a) shall be subject to this chapter, unless those filings are otherwise exempt from this chapter pursuant to another section of this title.   A filing submitted pursuant to subsection (a) is considered to comply with state law; however, if the commissioner of commerce and insurance determines that the filing is inadequate, excessive or unfairly discriminatory, the commissioner shall issue a written order specifying in detail the provisions of this title the insurer has violated and the reasons the filing is inadequate, excessive or unfairly discriminatory and stating a reasonable future date on which the filing is to be considered no longer effective. An order by the commissioner pursuant to this subsection (c) that is issued more than thirty (30) days from the date on which the commissioner received the rate filing is prospective only and does not affect any contract issued or made before the effective date of the order. For purposes of this part, unfairly discriminatory means a rate for a risk that is classified in whole or in part on the basis of race, color, creed, or national origin.   No rate increase within the limitation specified in subsection (a) may be implemented with regard to an individual existing policy, unless the increase is applied at the time of a renewal or conditional renewal of an existing policy and the insurer, at least thirty (30) days in advance of the end of the insured's policy period, mails or delivers to the named insured, at the address shown in the policy, a written notice that clearly and conspicuously discloses its intention to change the rate. A notice of renewal or conditional renewal that clearly and conspicuously discloses the renewal premium applicable to the policy shall be deemed to be in compliance with this subsection (d).   
 This chapter applies to life settlements as defined in this chapter and shall be known and may be cited as the Tennessee Viatical Settlement Act of 2009.  
 As used in this chapter:   Advertising means any written, electronic or printed communication or any communication by means of recorded telephone messages or transmitted on radio, television, the Internet or similar communications media, including film strips, motion pictures and videos, published, disseminated, circulated or placed directly before the public in this state for the purpose of creating an interest in or inducing a person to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy or to purchase or sell, assign, devise, bequest or transfer the death benefit or ownership of a life insurance policy pursuant to a viatical settlement contract;   Business of viatical settlements means an activity involved in, but not limited to, the offering, soliciting, negotiating, procuring, effectuating, purchasing, investing, financing, monitoring, tracking, underwriting, selling, transferring, assigning, pledging, hypothecating or in any other manner acquiring an interest in a life insurance policy by means of a viatical settlement contract;   Chronically ill means:  Being unable to perform at least two (2) activities of daily living; i.e., eating, toileting, transferring, bathing, dressing or continence;   Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; or   Having a level of disability similar to that described in subdivision (3)(A), as determined by the secretary of health and human services;     Commissioner means the commissioner of commerce and insurance;    Financing entity means an underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a viatical settlement provider, credit enhancer or any entity that has a direct ownership in a policy or certificate that is the subject of a viatical settlement contract, but:   Whose principal activity related to the transaction is providing funds to effect the viatical settlement or purchase of one (1) or more viaticated policies; and   Who has an agreement in writing with one (1) or more licensed viatical settlement providers to finance the acquisition of viatical settlement contracts;     Financing entity does not include a nonaccredited investor or a viatical settlement purchaser;     Fraudulent viatical settlement act means:  Acts or omissions committed by any person who, knowingly or with intent to defraud, for the purpose of depriving another of property or for pecuniary gain, commits or permits its employees or its agents to engage in acts including:   Presenting, causing to be presented or preparing with knowledge or belief that it will be presented to or by a viatical settlement provider, viatical settlement broker, viatical settlement purchaser, viatical settlement investment agent, financing entity, insurer, insurance producer or any other person, false material information, or concealing material information, as part of, in support of or concerning a fact material to one (1) or more of the following:        An application for the issuance of a viatical settlement contract or insurance policy;   The underwriting of a viatical settlement contract or insurance policy;   A claim for payment or benefit pursuant to a viatical settlement contract or insurance policy;   Premiums paid on an insurance policy, or as a result of a viatical settlement purchase agreement;   Payments and changes in ownership or beneficiary made in accordance with the terms of a viatical settlement contract, viatical settlement purchase agreement or insurance policy;   The reinstatement or conversion of an insurance policy;   In the solicitation, offer, effectuation or sale of a viatical settlement contract, insurance policy or viatical settlement purchase agreement;   The issuance of written evidence of viatical settlement contract, viatical settlement purchase agreement or insurance; or   A financing transaction;    Employing any plan, financial structure, device, scheme or artifice to defraud related to viaticated policies;   Entering into any agreement or undertaking any act or plan that involves stranger-originated life insurance; or   Failing to disclose to the insurer when requested by the insurer that the prospective insured has undergone a life expectancy evaluation within one (1) year prior to or subsequent to applying for the insurance policy by any person or entity other than the insurer or its authorized representative in connection with the issuance of a policy;   In the furtherance of a fraud or to prevent the detection of a fraud any person commits or permits its employees or its agents to:   Remove, conceal, alter, destroy or sequester from the commissioner the assets or records of a licensee or other person engaged in the business of viatical settlements;   Misrepresent or conceal the financial condition of a licensee, financing entity, insurer or other person;   Transact the business of viatical settlements in violation of laws requiring a license, certificate of authority or other legal authority for the transaction of the business of viatical settlements; or   File with the commissioner or the equivalent chief insurance regulatory official of another jurisdiction a document containing false information or otherwise conceal information about a material fact from the commissioner;   Embezzlement, theft, misappropriation or conversion of moneys, funds, premiums, credits or other property of a viatical settlement provider, insurer, insured, viator, insurance policyowner or any other person engaged in the business of viatical settlements or insurance;   Recklessly entering into, negotiating, brokering or otherwise dealing in a viatical settlement contract, the subject of which is a life insurance policy that was obtained by presenting false information concerning any fact material to the policy or by concealing, for the purpose of misleading another, information concerning any fact material to the policy, where the person or the persons intended to defraud the policy's issuer, the viatical settlement provider or the viator. Recklessly means engaging in the conduct in conscious and clearly unjustifiable disregard of a substantial likelihood of the existence of the relevant facts or risks, such disregard involving a gross deviation from acceptable standards of conduct;   Facilitating the change of state of ownership of a policy or certificate or the state of residency of a viator to a state or jurisdiction that does not have a law similar to this chapter for the express purposes of evading or avoiding this chapter; or   Attempting to commit, assisting, aiding or abetting in the commission of, or conspiracy to commit the acts or omissions specified in this subdivision (6);   Life insurance producer means any person licensed in this state as a resident or nonresident insurance producer that has received qualification or authority for life insurance coverage or a life line of coverage pursuant to chapter 6, part 1 of this title;   Person means a natural person or a legal entity, including, but not limited to, an individual, partnership, limited liability company, association, trust or corporation;   Policy means an individual or group policy, group certificate, contract or arrangement of life insurance owned by a resident of this state, regardless of whether delivered or issued for delivery in this state;   Related provider trust means a titling trust or other trust established by a licensed viatical settlement provider or a financing entity for the sole purpose of holding the ownership or beneficial interest in purchased policies in connection with a financing transaction. The trust shall have a written agreement with the licensed viatical settlement provider under which the licensed viatical settlement provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files related to viatical settlement transactions available to the commissioner as if those records and files were maintained directly by the licensed viatical settlement provider;   Special purpose entity means a corporation, partnership, trust, limited liability company or other similar entity formed solely to provide, either directly or indirectly, access to institutional capital markets:   For a financing entity or licensed viatical settlement provider; or   (i)  In connection with a transaction in which the securities in the special purpose entity are acquired by the viator or by qualified institutional buyers as defined in 17 CFR 230.144A, promulgated under the Securities Act of 1933 (15 U.S.C.  77a et seq.); or   In connection with a transaction in which the securities pay a fixed rate of return commensurate with established asset-backed institutional capital markets;   (A)  Stranger-originated life insurance means a practice or an act to initiate a life insurance policy for the benefit of a third-party investor who, at the time of policy origination, has no insurable interest in the insured;   Stranger-originated life insurance practices include cases in which life insurance is purchased with resources or guarantees from or through a person or entity that, at the time of the policy inception, could not lawfully initiate the policy by the person or entity, and where, at the time of the policy's inception, there is an arrangement or agreement, whether verbal or written, to directly or indirectly transfer the ownership of the policy or the policy benefits to a third party. Trusts that are created to give the appearance of an insurable interest, and are used to initiate policies for investors, violate insurable interest laws and the prohibition against wagering on life;   Stranger-originated life insurance arrangements do not include a lawful viatical settlement contract as defined in this section, or those practices set forth in subdivision (15)(D);   Terminally ill means having an illness or sickness that can reasonably be expected to result in death in twenty-four (24) months or less;   Viatical settlement broker means a person, including a life insurance producer, as provided for in  56-50-103, who working exclusively on behalf of a viator and for a fee, commission or other valuable consideration, offers or attempts to negotiate viatical settlement contracts between a viator and one (1) or more viatical settlement providers or one (1) or more viatical settlement brokers. Notwithstanding the manner in which the viatical settlement broker is compensated, a viatical settlement broker is deemed to represent only the viator, and not the insurer or the viatical settlement provider, and owes a fiduciary duty to the viator to act according to the viator's instructions and in the best interest of the viator. Viatical settlement broker does not include an attorney, certified public accountant or a financial planner accredited by a nationally recognized accreditation agency who is retained to represent the viator and whose compensation is not paid directly or indirectly by the viatical settlement provider or purchaser;   (A)  Viatical settlement contract means a written agreement between a viator and a viatical settlement provider establishing the terms under which compensation or anything of value is or will be paid, which compensation or value is less than the expected death benefits of the policy, in return for the viator's present or future assignment, transfer, sale, devise or bequest of the death benefit or ownership of any portion of the insurance policy or certificate of insurance;   Viatical settlement contract includes a premium finance loan made for a life insurance policy by a lender to a viator on, before or after the date of issuance of the policy where:   The viator or the insured receives on the date of the premium finance loan a guarantee of a future viatical settlement value of the policy; or   The viator or the insured agrees on the date of the premium finance loan to sell the policy or any portion of its death benefit on any date following the issuance of the policy;   Viatical settlement contract also includes the transfer for compensation or value of ownership or beneficial interest in a trust or other entity that owns a life insurance policy if the trust or other entity was formed or availed of for the principal purpose of acquiring one (1) or more life insurance policies, which life insurance policy insures the life of a person residing in this state;   Viatical settlement contract does not include:   A policy loan or accelerated death benefit made by the insurer pursuant to the policy's terms;   Loan proceeds that are used solely to pay:   Premiums for the policy; or   The costs of the loan, including, but not limited to, interest, arrangement fees, utilization fees and similar fees, closing costs, legal fees and expenses, trustee fees and expenses and third party collateral provider fees and expenses, including fees payable to letter of credit issuers;   A loan made by a bank or other licensed financial institution in which the lender takes an interest in a life insurance policy solely to secure repayment of a loan or, if there is a default on the loan and the policy is transferred, the transfer of such a policy by the lender; provided, that the default itself is not pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this chapter;   A loan made by a lender that does not violate chapter 37 of this title; provided, that the premium finance loan is not described in subdivision (15)(B);   An agreement where all the parties are closely related to the insured by blood or law or have a lawful substantial economic interest in the continued life, health and bodily safety of the person insured, or are trusts established primarily for the benefit of such parties;   Any designation, consent or agreement by an insured who is an employee of an employer in connection with the purchase by the employer, or trust established by the employer, of life insurance on the life of the employee;   A bona fide business succession planning arrangement:   Between one (1) or more shareholders in a corporation or between a corporation and one (1) or more of its shareholders or one (1) or more trusts established by its shareholders;   Between one (1) or more partners in a partnership or between a partnership and one (1) or more of its partners or one (1) or more trusts established by its partners; or   Between one (1) or more members in a limited liability company or between a limited liability company and one (1) or more of its members or one (1) or more trusts established by its members;   An agreement entered into by a service recipient, or a trust established by the service recipient, and a service provider, or a trust established by the service provider, who performs significant services for the service recipient's trade or business; or   Any other contract, transaction or arrangement exempted from the definition of viatical settlement contract by the commissioner based on a determination that the contract, transaction or arrangement is not of the type intended to be regulated by this chapter;   Viatical settlement investment agent means a person who is an appointed or contracted agent of a licensed viatical settlement provider who solicits or arranges the funding for the purchase of a viatical settlement by a viatical settlement purchaser and who is acting on behalf of a viatical settlement provider;   A viatical settlement investment agent shall not have any contact directly or indirectly with the viator or insured or have knowledge of the identity of the viator or insured;   A viatical settlement investment agent is deemed to represent the viatical settlement provider of whom the viatical settlement investment agent is an appointed or contracted agent;   (A)  Viatical settlement provider means a person, other than a viator, that enters into or effectuates a viatical settlement contract with a viator resident in this state;   Viatical settlement provider does not include:   A bank, savings bank, savings and loan association, credit union or other licensed lending institution that takes an assignment of a life insurance policy solely as collateral for a loan;   The issuer of the life insurance policy;   An authorized or eligible insurer that provides stop loss coverage or financial guaranty insurance to a viatical settlement provider, purchaser, financing entity, special purpose entity or related provider trust;   A natural person who enters into or effectuates no more than one (1) agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit;   A financing entity;   A special purpose entity;   A related provider trust;   A viatical settlement purchaser; or   Any other person that the commissioner determines is not the type of person intended to be covered by the definition of viatical settlement provider;   Viatical settlement purchase agreement means a contract or agreement, entered into by a viatical settlement purchaser, to which the viator is not a party, to purchase a life insurance policy or an interest in a life insurance policy that is entered into for the purpose of deriving an economic benefit;   (A)  Viatical settlement purchaser means a person who provides a sum of money as consideration for a life insurance policy or an interest in the death benefits of a life insurance policy, or a person who owns or acquires or is entitled to a beneficial interest in a trust that owns a viatical settlement contract or is the beneficiary of a life insurance policy that has been or will be the subject of a viatical settlement contract, for the purpose of deriving an economic benefit;   Viatical settlement purchaser does not include:   A licensee under this chapter;   An accredited investor, as defined in 17 CFR 230.501(a), or a qualified institutional buyer as defined in 17 CFR 230.144A, both promulgated under the Federal Securities Act of 1933 (15 U.S.C.  77a et seq.);   A financing entity;   A special purpose entity; or   A related provider trust;   Viaticated policy means a life insurance policy or certificate that has been acquired by a viatical settlement provider pursuant to a viatical settlement contract; and   (A)  Viator means the owner of a life insurance policy or a certificate holder under a group policy who resides in this state and enters or seeks to enter into a viatical settlement contract. For the purposes of this chapter, a viator includes, but is not limited to, an owner of a life insurance policy or a certificate holder under a group policy insuring the life of an individual with a terminal or chronic illness or condition except where specifically addressed. If there is more than one (1) viator on a single policy and the viators are residents of different states, the transaction shall be governed by the law of the state in which the viator having the largest percentage ownership resides or, if the viators hold equal ownership, the state of residence of one (1) viator agreed upon in writing by all the viators;   Viator does not include:   A licensee under this chapter, including a life insurance producer acting as a viatical settlement broker pursuant to this chapter;   A qualified institutional buyer as defined in 17 CFR 230.144A, promulgated under the Federal Securities Act of 1933;   A financing entity;   A special purpose entity; or   A related provider trust.  
   A person shall not operate as a viatical settlement provider or viatical settlement broker without first obtaining a license from the commissioner of the state of residence of the viator.   A person shall not operate as a viatical settlement investment agent without first obtaining a license from the commissioner of the state of residence of the viatical settlement purchaser. If there is more than one (1) purchaser of a single policy and the purchasers are residents of different states, the viatical settlement purchase agreement shall be governed by the law of the state in which the purchaser having the largest percentage ownership resides or, if the purchasers hold equal ownership, the state of residence of one (1) purchaser agreed upon in writing by all purchasers.    A life insurance producer who has been duly licensed as a resident insurance producer with a life line of authority in this state or the life insurance producers home state for at least one (1) year and is licensed as a nonresident producer in this state shall be deemed to meet the licensing requirements of this section and shall be permitted to operate as a viatical settlement broker.   Not later than thirty (30) days from the first day of operating as a viatical settlement broker, the life insurance producer shall notify the commissioner that the life insurance producer is acting as a viatical settlement broker on a form prescribed by the commissioner, and shall pay any applicable fee to be determined by the commissioner. Notification shall include an acknowledgement by the life insurance producer that the life insurance producer will operate as a viatical settlement broker in accordance with this chapter.   The insurer that issued the policy being viaticated shall not be responsible for any act or omission of a viatical settlement broker or viatical settlement provider arising out of or in connection with the viatical settlement transaction, unless the insurer receives compensation for the placement of a viatical settlement contract from the viatical settlement provider or viatical settlement broker in connection with the viatical settlement contract.     A person licensed as an attorney, certified public accountant or financial planner accredited by a nationally recognized accreditation agency, who is retained to represent the viator, whose compensation is not paid directly or indirectly by the viatical settlement provider, may negotiate viatical settlement contracts on behalf of the viator without having to obtain a license as a viatical settlement broker.     Application for a viatical settlement provider, viatical settlement broker or viatical settlement investment agent license shall be made to the commissioner by the applicant on a form prescribed by the commissioner, and these applications shall be accompanied by the fees promulgated by rule.   Licenses may be renewed from year to year on the anniversary date upon payment of the annual renewal fees promulgated by rule. Failure to pay the fees by the renewal date results in expiration of the license.   The applicant shall provide information on forms required by the commissioner. The commissioner shall have the authority, at any time, to require the applicant to fully disclose the identity of all stockholders, partners, officers, members and employees. The commissioner may, in the exercise of the commissioner's discretion, refuse to issue a license in the name of a legal entity if not satisfied that any officer, employee, stockholder, partner or member of the entity who may materially influence the applicant's conduct meets the standards of this chapter.   A license issued to a legal entity authorizes all partners, officers, members and designated employees to act as viatical settlement providers, viatical settlement brokers or viatical settlement investment agents, as applicable, under the license; and all those persons shall be named in the application and any supplements to the application.    Upon the filing of an application and the payment of the license fee, the commissioner shall make an investigation of each applicant and issue a license if the commissioner finds that the applicant:  If a viatical settlement provider:   Has provided a detailed plan of operation;   Is competent and trustworthy and intends to act in good faith in the capacity involved by the license applied for; and   Has a good business reputation and intends to act in good faith in the capacity involved by the license applied for;     If a viatical settlement provider, has demonstrated evidence of financial responsibility in a format prescribed by the commissioner through a surety bond executed and issued by an insurer authorized to issue surety bonds in this state, an errors and omissions insurance policy issued by an insurance company licensed to sell such insurance in this state, or a deposit of cash, certificates of deposit or securities or any combination thereof in the amount of two hundred fifty thousand dollars ($250,000);   If a viatical settlement broker, has demonstrated evidence of financial responsibility in a format prescribed by the commissioner through a surety bond executed and issued by an insurer authorized to issue surety bonds in this state, an errors and omissions insurance policy issued by an insurance company licensed to sell such insurance in this state, including a policy issued to a viatical settlement provider, that also covers the actions of the broker, or a deposit of cash, certificates of deposit or securities or any combination thereof in the amount of two hundred fifty thousand dollars ($250,000);   If a legal entity, provides a certificate of good standing from the state of its domicile; and   If a viatical settlement provider or viatical settlement broker, has provided an anti-fraud plan that meets the requirements of  56-50-114(g).     The commissioner may ask for evidence of financial responsibility at any time the commissioner deems necessary.   Any surety bond issued pursuant to subdivision (f)(1) shall be in the favor of this state and shall specifically authorize recovery by the commissioner on behalf of any person in this state who sustains damages as the result of erroneous acts, failure to act, conviction of fraud or conviction of unfair practices by the viatical settlement provider or viatical settlement broker.   Notwithstanding any provision of this section to contrary, the commissioner shall accept, as evidence of financial responsibility, proof that financial instruments in accordance with the requirements in this subsection (f) have been filed with one (1) state where the applicant is licensed as a viatical settlement provider or viatical settlement broker.     The commissioner shall not issue a license to a nonresident applicant, unless a written designation of an agent for service of process is filed and maintained with the commissioner or the applicant has filed with the commissioner the applicant's written irrevocable consent that any action against the applicant may be commenced against the applicant by service of process on the commissioner.   A viatical settlement provider, viatical settlement broker or viatical settlement investment agent shall provide to the commissioner new or revised information about officers, ten percent (10%) or more stockholders, partners, directors, members or designated employees within thirty (30) days of the change.   An individual licensed as a viatical settlement broker shall complete on a biennial basis fifteen (15) hours of training related to viatical settlements and viatical settlement transactions, as required by the commissioner; provided, however, that a life insurance producer who is operating as a viatical settlement broker pursuant to subdivision (a)(3) shall not be subject to the requirements of this subsection (i). Any person failing to meet the requirements of this subsection (i) shall be subject to the penalties imposed by the commissioner.   
  The commissioner may refuse to issue, suspend, revoke or refuse to renew the license of a viatical settlement provider, viatical settlement broker or viatical settlement investment agent if the commissioner finds that:  There was any material misrepresentation in the application for the license;   The licensee or any officer, partner, member or key management personnel has been convicted of fraudulent or dishonest practices, is subject to a final administrative action or is otherwise shown to be untrustworthy or incompetent;   The viatical settlement provider demonstrates a pattern of unreasonable payments to viators;   The licensee or any officer, partner, member or key management personnel has been found guilty of, or has pleaded guilty or nolo contendere to, any felony, or to a misdemeanor involving fraud or moral turpitude, regardless of whether a judgment of conviction has been entered by the court;   The viatical settlement provider has entered into any viatical settlement contract that has not been approved pursuant to this chapter;   The viatical settlement provider has failed to honor contractual obligations set out in a viatical settlement contract or a viatical settlement purchase agreement;   The licensee no longer meets the requirements for initial licensure;   The viatical settlement provider has assigned, transferred or pledged a viaticated policy to a person other than a viatical settlement provider licensed in this state, viatical settlement purchaser, an accredited investor as defined in 17 CFR 230.501(a), or qualified institutional buyer as defined in 17 CFR 230.144A, both promulgated under the Federal Securities Act of 1933, financing entity, special purpose entity or related provider trust; or   The licensee or any officer, partner, member or key management personnel has violated this chapter.     The commissioner may suspend, revoke or refuse to renew the license of a viatical settlement broker or a life insurance producer operating as a viatical settlement broker pursuant to this chapter if the commissioner finds that the viatical settlement broker or life insurance producer has violated this chapter or has otherwise engaged in bad faith conduct with one (1) or more viators.   If the commissioner suspends, revokes or refuses to renew the license of a viatical settlement provider, viatical settlement broker or viatical settlement investment agent, or suspends, revokes or refuses to renew a license of a life insurance producer operating as a viatical settlement broker pursuant to this chapter, the commissioner shall conduct a hearing in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3. If the commissioner denies a license application of a viatical settlement provider, viatical settlement broker or viatical settlement investment agent, the commissioner shall notify the applicant in writing of the denial and the grounds for denial.   
 A person shall not use a viatical settlement contract form or provide to a viator a disclosure statement form in this state unless first filed with and approved by the commissioner. The commissioner shall disapprove a viatical settlement contract form or disclosure statement form if, in the commissioner's opinion, the contract or provisions contained in the contract fail to meet the requirements of this chapter, including, but not limited to  56-50-108, 56-50-110, 56-50-113 and 56-50-114(b), or are unreasonable, contrary to the interests of the public or otherwise misleading or unfair to the viator. At the commissioner's discretion, the commissioner may require the submission of advertising material prior to its use in this state.  
  Each viatical settlement provider shall file with the commissioner on or before March 1 of each year an annual statement containing such information as the commissioner may prescribe by regulation. In addition to any other requirements, the annual statement shall specify the total number, aggregate face amount and life settlement proceeds of policies settled during the immediately preceding calendar year, together with a breakdown of the information by policy issue year.   Except as otherwise allowed or required by law, a viatical settlement provider, viatical settlement broker, viatical settlement investment agent, insurance company, insurance producer, information bureau, rating agency or company or any other person with actual knowledge of an insured's identity shall not disclose that identity as an insured or the insured's financial or medical information to any other person unless the disclosure:  Is necessary to effect a viatical settlement between the viator and a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure;   Is necessary to effect a viatical settlement purchase agreement between the viatical settlement purchaser and a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure;   Is provided in response to an investigation or examination by the commissioner or any other governmental officer or agency or pursuant to the requirements of  56-50-114(c);   Is a term of or condition to the transfer of a policy by one (1) viatical settlement provider to another viatical settlement provider;   Is necessary to permit a financing entity, related provider trust or special purpose entity to finance the purchase of policies by a viatical settlement provider and the viator and insured have provided prior written consent to the disclosure;   Is necessary to allow the viatical settlement provider or viatical settlement broker or their authorized representatives to make contacts for the purpose of determining health status; or   Is required to purchase stop loss coverage or financial guaranty insurance.     
  Authority, Scope and Scheduling of Examinations.   The commissioner may conduct an examination under this chapter of a licensee as often as the commissioner, in the commissioners discretion, deems appropriate after considering the factors set forth in subdivision (a)(1)(B).   In scheduling and determining the nature, scope and frequency of the examinations, the commissioner shall consider such matters as the consumer complaints, results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and other relevant criteria as determined by the commissioner.     For purposes of completing an examination of a licensee under this chapter, the commissioner may examine or investigate any person, or the business of any person, in so far as the examination or investigation is, in the sole discretion of the commissioner, necessary or material to the examination of the licensee.   In lieu of an examination under this chapter of any foreign or alien licensee licensed in this state, the commissioner may, at the commissioner's discretion, accept an examination report on the licensee as prepared by the commissioner for the licensee's state of domicile or port-of-entry state.   As far as practical, the examination of a foreign or alien licensee shall be made in cooperation with the insurance supervisory officials of other states in which the licensee transacts business.     Record Retention Requirements.  A person required to be licensed by this chapter shall for five (5) years retain copies of all:  Proposed, offered or executed contracts, purchase agreements, underwriting documents, policy forms and applications from the date of the proposal, offer or execution of the contract or purchase agreement, whichever is later;   All checks, drafts or other evidence and documentation related to the payment, transfer, deposit or release of funds from the date the transaction; and   All other records and documents related to the requirements of this chapter.     This subsection (b) does not relieve a person of the obligation to produce these documents to the commissioner after the retention period has expired if the person has retained the documents.   Records required to be retained by this subsection (b) must be legible and complete and may be retained in paper, photograph, microprocess, magnetic, mechanical or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.     Conduct of Examinations.  Upon determining that an examination should be conducted, the commissioner shall issue an examination warrant appointing one (1) or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the examiners handbook adopted by the National Association of Insurance Commissioners (NAIC). The commissioner may also employ such other guidelines or procedures as the commissioner may deem appropriate.   Every licensee or person from whom information is sought, its officers, directors and agents shall provide to the examiners timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, assets and computer or other recordings relating to the property, assets, business and affairs of the licensee being examined. The officers, directors, employees and agents of the licensee or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of a licensee, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the commissioner shall be grounds for suspension or refusal of, or nonrenewal of any license or authority held by the licensee to engage in the viatical settlement business or other business subject to the commissioner's jurisdiction. Any proceedings for suspension, revocation or refusal of any license or authority shall be conducted pursuant to  56-2-305.   The commissioner shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to the examination. Upon the failure or refusal of a person to obey a subpoena, the commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court.   When making an examination under this chapter, the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the reasonable cost of which shall be borne by the licensee that is the subject of the examination.   Nothing contained in this chapter shall be construed to limit the commissioner's authority to terminate or suspend an examination in order to pursue other legal or regulatory action pursuant to the insurance laws of this state. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action.   Nothing contained in this chapter shall be construed to limit the commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examiner or licensee work papers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the commissioner may, in the commissioners sole discretion, deem appropriate.     Examination Reports.  Examination reports shall be comprised of only facts appearing upon the books, records or other documents of the licensee, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, and such conclusions and recommendations as the examiners find reasonably warranted from the facts.   No later than sixty (60) days following completion of the examination, the examiner in charge shall file with the commissioner a verified written report of examination under oath. Upon receipt of the verified report, the commissioner shall transmit the report to the licensee examined, together with a notice that shall afford the licensee examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report.   In the event the commissioner determines that regulatory action is appropriate as a result of an examination, the commissioner may initiate any proceedings or actions provided by law.     Confidentiality of Examination Information.  Names and individual identification data for all viators shall be considered private and confidential information and shall not be disclosed by the commissioner, unless specifically required by law.    Except as otherwise provided in this chapter, all examination reports, working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this chapter, or in the course of analysis or investigation by the commissioner of the financial condition or market conduct of a licensee shall be confidential by law and privileged, shall not be subject to  10-7-503, shall not be subject to subpoena and shall not be subject to discovery or admissible in evidence in any private civil action. The commissioner is authorized to use the documents, materials or other information in the furtherance of any regulatory or legal action brought as part of the commissioner's official duties. All examination reports, working papers, recorded information, documents and their copies produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under this chapter, or in the course of an analysis or investigation by the commissioner of the financial condition or market conduct of a licensee shall be privileged and confidential in any judicial or administrative proceeding, except for any of the following:   An administrative proceeding brought by the commissioner under this chapter;   A judicial review proceeding authorized under this chapter brought by an insurer to whom the records relate; or   An action or proceeding that arises out of the criminal laws of this state or the United States.     For the purposes of subdivision (e)(2)(A), this chapter includes the law of another state or jurisdiction that is substantially similar to this chapter.     Documents, materials or other information, including, but not limited to, all working papers, and copies thereof, in the possession or control of the NAIC and its affiliates and subsidiaries shall be confidential by law and privileged, shall not be subject to subpoena, and shall not be subject to discovery or admissible in evidence in any private civil action if they are:  Created, produced or obtained by or disclosed to the NAIC and its affiliates and subsidiaries in the course of assisting an examination made under this chapter, or assisting a commissioner in the analysis or investigation of the financial condition or market conduct of a licensee; or   Disclosed to the NAIC and its affiliates and subsidiaries under subdivision (e)(4) by a commissioner.     Neither the commissioner nor any person that received the documents, material or other information while acting under the authority of the commissioner, including the NAIC and its affiliates and subsidiaries, shall be permitted to testify in any private civil action concerning any confidential documents, materials or information subject to subdivision (e)(1).   In order to assist in the performance of the commissioner's duties, the commissioner:  May share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subdivision (e)(1), with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material, communication or other information;   May receive documents, materials, communications or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the jurisdiction that is the source of the document, material or information; and   May enter into agreements governing sharing and use of information consistent with this subsection (e).     No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subdivision (e)(5).   A privilege established under the law of any state or jurisdiction that is substantially similar to the privilege established under this subsection (e) shall be available and enforced in any proceeding in, and in any court of, this state.   Nothing contained in this chapter shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the commissioner of any other state or country, or to law enforcement officials of this or any other state or agency of the federal government at any time or to the NAIC, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this chapter.     Conflict of Interest.  An examiner may not be appointed by the commissioner if the examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of or owns a pecuniary interest in any person subject to examination under this chapter. This subsection (f) shall not be construed to automatically preclude an examiner from being:  A viator;   An insured in a viaticated insurance policy; or   A beneficiary in an insurance policy that is proposed to be viaticated.     Notwithstanding the requirements of this subsection (f), the commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants or other similar individuals who are independently practicing their professions, even though these persons may from time to time be similarly employed or retained by persons subject to examination under this chapter.     Cost of Examinations.   Any licensee or applicant examined under this chapter shall pay the proper charges incurred in such examination, including the expenses of the commissioner or anyone employed or contracted by the commissioner to assist in the examination.   Immunity from Liability.  No cause of action shall arise nor shall any liability be imposed against the commissioner, the commissioner's authorized representatives or any examiner appointed by the commissioner for any statements made or conduct performed in good faith while carrying out this chapter.   No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the commissioner or the commissioner's authorized representative or examiner pursuant to an examination made under this chapter, if the act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. This subdivision (h)(2) does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (h)(1).   A person identified in subdivision (h)(1) or (h)(2) shall be entitled to an award of attorney's fees and costs if the person is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this subdivision (h)(3), a proceeding is substantially justified if it had a reasonable basis in law or fact at the time that it was initiated.     Investigative Authority of the Commissioner.   The commissioner may investigate suspected violations of this chapter or fraudulent viatical settlement acts and all persons engaged in the business of viatical settlements.   
  With each application for a viatical settlement, a viatical settlement provider or viatical settlement broker shall provide the viator with at least the following disclosures no later than the time the application for the viatical settlement contract is signed by all parties. The disclosures shall be provided in a separate document that is signed by the viator and the viatical settlement provider or viatical settlement broker, and shall provide the following information:  There are possible alternatives to viatical settlement contracts, including any accelerated death benefits or policy loans offered under the viator's life insurance policy;   That a viatical settlement broker represents exclusively the viator, and not the insurer or the viatical settlement provider, and owes a fiduciary duty to the viator, including a duty to act according to the viator's instructions and in the best interest of the viator;   Some or all of the proceeds of the viatical settlement may be taxable under federal income tax and state franchise and income taxes, and assistance should be sought from a professional tax advisor;   Proceeds of the viatical settlement could be subject to the claims of creditors;   Receipt of the proceeds of a viatical settlement may adversely affect the viator's eligibility for medicaid or other government benefits or entitlements, and advice should be obtained from the appropriate government agencies;   The viator has the right to rescind a viatical settlement contract before the earlier of thirty (30) calendar days after the date upon which the viatical settlement contract is executed by all parties or fifteen (15) calendar days after the viatical settlement proceeds have been paid to the viator, as provided in  56-50-110(f). Rescission, if exercised by the viator, is effective only if both notice of the rescission is given and the viator repays all proceeds and any premiums, loans and loan interest paid on account of the viatical settlement within the rescission period. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment by the viator or the viator's estate of all viatical settlement proceeds and any premiums, loans and loan interest paid on account of the viatical settlement within sixty (60) days of the insured's death;   Funds will be sent to the viator within three (3) business days after the viatical settlement provider has received the insurers or group administrator's written acknowledgment that ownership of the policy or interest in the certificate has been transferred and the beneficiary has been designated;   Entering into a viatical settlement contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the policy or certificate, to be forfeited by the viator. Assistance should be sought from a financial adviser;   Disclosure to a viator shall include distribution of a brochure describing the process of viatical settlements. The National Association of Insurance Commissioners (NAIC) form for the brochure shall be used unless another form is developed or approved by the commissioner;   The disclosure document shall contain the following language:  All medical, financial or personal information solicited or obtained by a viatical settlement provider or viatical settlement broker about an insured, including the insured's identity or the identity of family members, a spouse or a significant other may be disclosed as necessary to effect the viatical settlement between the viator and the viatical settlement provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two (2) years.    Following execution of a viatical contract, the insured may be contacted for the purpose of determining the insured's health status and to confirm the insured's residential or business street address and telephone number, or as otherwise provided in this chapter. This contact shall be limited to once every three (3) months if the insured has a life expectancy of more than one (1) year, and no more than once per month if the insured has a life expectancy of one (1) year or less. All such contacts shall be made only by a viatical settlement provider licensed in the state in which the viator resided at the time of the viatical settlement and contract, or by the authorized representative of a duly licensed viatical settlement provider.     A viatical settlement provider shall provide the viator with at least the following disclosures no later than the date the viatical settlement contract is signed by all parties. The disclosures shall be conspicuously displayed in the viatical settlement contract or in a separate document signed by the viator and shall provide the following information:  The affiliation, if any, between the viatical settlement provider and the issuer of the insurance policy to be viaticated;   The document shall include the name, business address and telephone number of the viatical settlement provider;   If an insurance policy to be viaticated has been issued as a joint policy or involves family riders or any coverage of a life other than the insured under the policy to be viaticated, the viator shall be informed of the possible loss of coverage on the other lives under the policy and shall be advised to consult with the viators insurance producer or the insurer issuing the policy for advice on the proposed viatical settlement;   State the dollar amount of the current death benefit payable to the viatical settlement provider under the policy or certificate. If known, the viatical settlement provider shall also disclose the availability of any additional guaranteed insurance benefits, the dollar amount of any accidental death and dismemberment benefits under the policy or certificate and the extent to which the viator's interest in those benefits will be transferred as a result of the viatical settlement contract; and   State whether the funds will be escrowed with an independent third party during the transfer process, and if so, provide the name, business address and telephone number of the independent third party escrow agent, and the fact that the viator or owner may inspect or receive copies of the relevant escrow or trust agreements or documents.     A viatical settlement broker shall provide the viator with at least the following disclosures no later than the date the viatical settlement contract is signed by all parties. The disclosures shall be conspicuously displayed in the viatical settlement contract or in a separate document signed by the viator and shall provide the following information:  The name, business address and telephone number of the viatical settlement broker;   A full, complete and accurate description of all offers, counter-offers, acceptances and rejections relating to the proposed viatical settlement contract;   A written disclosure of any affiliations or contractual arrangements between the viatical settlement broker and any person making an offer in connection with the proposed viatical settlement contracts; and   The amount and method of calculating the broker's compensation. As used in this subdivision (c)(4), compensation includes anything of value paid or given to a viatical settlement broker for the placement of a policy.     If the viatical settlement provider transfers ownership or changes the beneficiary of the insurance policy, the provider shall communicate in writing the change in ownership or beneficiary to the insured within twenty (20) days after the change.   A viatical settlement provider or its viatical settlement investment agent shall provide the viatical settlement purchaser with at least the following disclosures prior to the date the viatical settlement purchase agreement is signed by all parties. The disclosures shall be conspicuously displayed in any viatical purchase contract or in a separate document signed by the viatical settlement purchaser and viatical settlement provider or viatical settlement investment agent, and shall make the following disclosure to the viatical settlement purchaser:  The purchaser will receive no returns, i.e., no dividends and interest, until the insured dies and a death claim payment is made;   The actual annual rate of return on a viatical settlement contract is dependent upon an accurate projection of the insured's life expectancy, and the actual date of the insured's death. An annual guaranteed rate of return is not determinable;   The viaticated life insurance contract should not be considered a liquid purchase since it is impossible to predict the exact timing of its maturity and the funds probably are not available until the death of the insured. There is no established secondary market for resale of these products by the purchaser;   The purchaser may lose all benefits or may receive substantially reduced benefits if the insurer goes out of business during the term of the viatical investment;   The purchaser is responsible for payment of the insurance premium or other costs related to the policy, if required by the terms of the viatical purchase agreement. These payments may reduce the purchaser's return. If a party other than the purchaser is responsible for the payment, the name and address of that party also shall be disclosed;   The purchaser is responsible for payment of the insurance premiums or other costs related to the policy if the insured returns to health. Disclose the amount of such premiums, if applicable;   State the name, business address and telephone number of the independent third party providing escrow services and the relationship to the broker;   The amount of any trust fees or other expenses to be charged to the viatical settlement purchaser;   State whether the purchaser is entitled to a refund of all or part of the purchasers investment under the settlement contract if the policy is later determined to be null and void;   Disclose that group policies may contain limitations or caps in the conversion rights, additional premiums may have to be paid if the policy is converted, name the party responsible for the payment of the additional premiums and, if a group policy is terminated and replaced by another group policy, state that there may be no right to convert the original coverage;   Disclose the risks associated with policy contestability, including, but not limited to, the risk that the purchaser will have no claim or only a partial claim to death benefits should the insurer rescind the policy within the contestability period;   Disclose whether the purchaser will be the owner of the policy in addition to being the beneficiary, and if the purchaser is the beneficiary only and not also the owner, the special risks associated with that status, including, but not limited to, the risk that the beneficiary may be changed or the premium may not be paid;   Describe the experience and qualifications of the person who determines the life expectancy of the insured, i.e., in-house staff, independent physicians and specialty firms that weigh medical and actuarial data, the information this projection is based on, and the relationship of the projection maker to the viatical settlement provider, if any; and   Disclosure to an investor shall include distribution of a brochure describing the process of investment in viatical settlements. The NAIC's form for the brochure shall be used unless one is developed by the commissioner.     A viatical settlement provider or its viatical settlement investment agent shall provide the viatical settlement purchaser with at least the following disclosures no later than at the time of the assignment, transfer or sale of all or a portion of an insurance policy. The disclosures shall be contained in a document signed by the viatical settlement purchaser and viatical settlement provider or viatical settlement investment agent, and shall make the following disclosures to the viatical settlement purchaser:  Disclose all the life expectancy certifications obtained by the provider in the process of determining the price paid to the viator;   State whether premium payments or other costs related to the policy have been escrowed. If escrowed, state the date upon which the escrowed funds will be depleted and whether the purchaser will be responsible for payment of premiums thereafter and, if so, the amount of the premiums;   State whether premium payments or other costs related to the policy have been waived. If waived, disclose whether the investor will be responsible for payment of the premiums if the insurer that wrote the policy terminates the waiver after purchase and the amount of those premiums;   Disclose the type of policy offered or sold, i.e., whole life, term life, universal life or a group policy certificate, any additional benefits contained in the policy and the current status of the policy;   If the policy is term insurance, disclose the special risks associated with term insurance including, but not limited to, the purchaser's responsibility for additional premiums if the viator continues the term policy at the end of the current term;   State whether the policy is contestable;   State whether the insurer that wrote the policy has any additional rights that could negatively affect or extinguish the purchaser's rights under the viatical settlement contract, what these rights are and under what conditions these rights are activated; and   State the name and address of the person responsible for monitoring the insured's condition. Describe how often the monitoring of the insured's condition is done, how the date of death is determined and how and when this information will be transmitted to the purchaser.     The viatical settlement purchase agreement is voidable by the purchaser at any time within three (3) days after the disclosures mandated by subsections (e) and (f) are received by the purchaser.   
 Prior to the initiation of a plan, transaction or series of transactions, a viatical settlement broker or viatical settlement provider shall fully disclose to an insurer a plan, transaction or series of transactions to which the viatical settlement broker or viatical settlement provider is a party, to originate, renew, continue or finance a life insurance policy with the insurer for the purpose of engaging in the business of viatical settlements at anytime prior to or during the first five (5) years after issuance of the policy. The insurer shall not disclose this information to any other viatical settlement provider or viatical settlement broker, including those affiliates of the insurer engaged in viatical settlement activity.  
   A viatical settlement provider entering into a viatical settlement contract shall first obtain:  If the viator is the insured, a written statement from a licensed attending physician that the viator is of sound mind and under no constraint or undue influence to enter into a viatical settlement contract; and   A document in which the insured consents to the release of the insureds medical records to a licensed viatical settlement provider, viatical settlement broker and the insurance company that issued the life insurance policy covering the life of the insured.     Within twenty (20) days after a viator executes documents necessary to transfer any rights under an insurance policy or within twenty (20) days of entering any agreement, option, promise or any other form of understanding, expressed or implied, to viaticate the policy, the viatical settlement provider shall give written notice to the insurer that issued the insurance policy that the policy has or will become a viaticated policy. The notice shall be accompanied by the documents required by subdivision (a)(3).   The viatical provider shall deliver a copy of the medical release required under subdivision (a)(1)(B), a copy of the viator's application for the viatical settlement contract, the notice required under subdivision (a)(2) and a request for verification of coverage to the insurer that issued the life policy that is the subject of the viatical transaction. The National Association of Insurance Commissioners (NAIC) form for verification of coverage shall be used unless another form is developed and approved by the commissioner.   The insurer shall respond to a request for verification of coverage submitted on an approved form by a viatical settlement provider or viatical settlement broker within thirty (30) calendar days of the date the request is received and shall indicate whether, based on the medical evidence and documents provided, the insurer intends to pursue an investigation at this time regarding the validity of the insurance contract or possible fraud. The insurer shall accept a request for verification of coverage made on a NAIC form or any other form approved by the commissioner. The insurer shall accept an original or facsimile or electronic copy of such request and any accompanying authorization signed by the viator. Failure by the insurer to meet its obligations under this subdivision (a)(4) shall be a violation of   56-50-111(c) and 56-50-116.   Prior to or at the time of execution of the viatical settlement contract, the viatical settlement provider shall obtain a witnessed document in which the viator consents to the viatical settlement contract, represents that the viator has a full and complete understanding of the viatical settlement contract, that the viator has a full and complete understanding of the benefits of the life insurance policy, acknowledges that the viator is entering into the viatical settlement contract freely and voluntarily and, for persons with a terminal or chronic illness or condition, acknowledges that the insured has a terminal or chronic illness and that the terminal or chronic illness or condition was diagnosed after the life insurance policy was issued.   If a viatical settlement broker performs any of these activities required of the viatical settlement provider, the provider is deemed to have fulfilled the requirements of this section.     All medical information solicited or obtained by any licensee shall be subject to the applicable state laws relating to confidentiality of medical information.   The viator has the right to rescind a viatical settlement contract before the earlier of thirty (30) calendar days after the date upon which the viatical settlement contract is executed by all parties or fifteen (15) calendar days after the viatical settlement proceeds have been paid to the viator, as provided in subsection (f). Rescission, if exercised by the viator, is effective only if both notice of the rescission is given, and the viator repays all proceeds and any premiums, loans and loan interest paid on account of the viatical settlement within the rescission period. If the insured dies during the rescission period, the viatical settlement contract shall be deemed to have been rescinded, subject to repayment by the viator or the viator's estate of all viatical settlement proceeds and any premiums, loans and loan interest paid on account of the viatical settlement within sixty (60) days of the insured's death.   The purchaser shall have the right to rescind a viatical settlement contract within three (3) days after the disclosures mandated by  56-50-108(d) and (e) are received by the purchaser.   The viatical settlement provider shall instruct the viator to send the executed documents required to effect the change in ownership, assignment or change in beneficiary directly to the independent escrow agent. Within three (3) business days after the date the escrow agent receives the document or from the date the viatical settlement provider receives the documents, if the viator erroneously provides the documents directly to the provider, the provider shall pay or transfer the proceeds of the viatical settlement into an escrow or trust account maintained in a state or federally chartered financial institution whose deposits are insured by the federal deposit insurance corporation (FDIC). Upon payment of the settlement proceeds into the escrow account, the escrow agent shall deliver the original change in ownership, assignment or change in beneficiary forms to the viatical settlement provider or related provider trust or other designated representative of the viatical settlement provider. Upon the escrow agent's receipt of the acknowledgment of the properly completed transfer of ownership, assignment or designation of beneficiary from the insurance company, the escrow agent shall pay the settlement proceeds to the viator.   Failure to tender consideration to the viator for the viatical settlement contract within the time set forth in the disclosure pursuant to  56-50-108(a)(7) renders the viatical settlement contract voidable by the viator for lack of consideration until the time consideration is tendered to and accepted by the viator. Funds shall be deemed sent by a viatical settlement provider to a viator as of the date that the escrow agent either releases funds for wire transfer to the viator or places a check for delivery to the viator via the United States postal service or other nationally recognized delivery service.   Contacts with the insured for the purpose of determining the health status of the insured by the viatical settlement provider after the viatical settlement has occurred shall only be made by the viatical settlement provider licensed in this state or its authorized representatives and shall be limited to once every three (3) months for insureds with a life expectancy of more than one (1) year, and to no more than once per month for insureds with a life expectancy of one (1) year or less. The provider shall explain the procedure for these contacts at the time the viatical settlement contract is entered into. The limitations set forth in this subsection (g) shall not apply to any contacts with an insured for reasons other than determining the insured's health status. Viatical settlement providers and viatical settlement brokers shall be responsible for the actions of their authorized representatives.   
  It is a violation of this chapter for any person to enter into a viatical settlement contract at any time prior to the application or issuance of a policy that is the subject of viatical settlement contract or within a period of time established by rule, unless the viator certifies to the viatical settlement provider that one (1) or more of the following conditions have been met within the prescribed period:  The policy was issued upon the viator's exercise of conversion rights arising out of a group or individual policy; provided, that the total of the time covered under the conversion policy plus the time covered under the prior policy is at least the prescribed period. The time covered under a group policy shall be calculated without regard to any change in insurance carriers; provided, that the coverage has been continuous and under the same group sponsorship;   The viator submits independent evidence to the viatical settlement provider that one (1) or more of the following conditions have been met within the prescribed period:  The viator or insured is terminally or chronically ill;   The viator's spouse dies;   The viator divorces the viators spouse;   The viator retires from full-time employment;   The viator becomes physically or mentally disabled and a physician determines that the disability prevents the viator from maintaining full-time employment; or   A final order, judgment or decree is entered by a court of competent jurisdiction, on the application of a creditor of the viator, adjudicating the viator bankrupt or insolvent, or approving a petition seeking reorganization of the viator or appointing a receiver, trustee or liquidator to all or a substantial part of the viator's assets; or     Such other exemptions as may be prescribed by rule.     Copies of the independent evidence described in subdivision (a)(2) and documents required by  56-50-110(a) shall be submitted to the insurer when the viatical settlement provider submits a request to the insurer for verification of coverage. The copies shall be accompanied by a letter of attestation from the viatical settlement provider that the copies are true and correct copies of the documents received by the viatical settlement provider.   If the viatical settlement provider submits to the insurer a copy of the owner or insured's certification described in and the independent evidence required by subdivision (a)(2) when the provider submits a request to the insurer to effect the transfer of the policy or certificate to the viatical settlement provider, the copy shall be deemed to conclusively establish that the viatical settlement contract satisfies the requirements of this section and the insurer shall timely respond to the request.   No insurer may, as a condition of responding to a request for verification of coverage or effecting the transfer of a policy pursuant to a viatical settlement contract, require that the viator, insured, viatical settlement provider or viatical settlement broker sign any forms, disclosures, consent or waiver form that has not been expressly approved by the commissioner for use in connection with viatical settlement contracts in this state.   Upon receipt of a properly completed request for change of ownership or beneficiary of a policy, the insurer shall respond in writing within thirty (30) calendar days with written acknowledgement confirming that the change has been effected or specifying the reasons why the requested change cannot be processed. The insurer shall not unreasonably delay effecting change of ownership or beneficiary and shall not otherwise seek to interfere with any viatical settlement contract lawfully entered into in this state.   
  With respect to any viatical settlement contract or insurance policy, no viatical settlement broker knowingly shall solicit an offer from, effectuate a viatical settlement with or make a sale to any viatical settlement provider, viatical settlement purchaser, viatical settlement investment agent, financing entity or related provider trust that is controlling, controlled by or under common control with such viatical settlement broker unless disclosed to the viator pursuant to this chapter.   With respect to any viatical settlement contract or insurance policy, no viatical settlement provider knowingly may enter into a viatical settlement contract with a viator, if, in connection with such viatical settlement contract, anything of value will be paid to a viatical settlement broker that is controlling, controlled by or under common control with such viatical settlement provider or the viatical settlement purchaser, viatical settlement investment agent, financing entity or related provider trust that is involved in such viatical settlement contract unless disclosed to the viator pursuant to this chapter.   A viatical settlement provider shall not enter into a premium finance agreement with any person or agency, or any person affiliated with such person or agency, pursuant to which such person or agency shall receive any proceeds, fees or other consideration, directly or indirectly, from the policy or owner of the policy or any other person with respect to the premium finance agreement or any viatical settlement contract or other transaction related to such policy that are in addition to the amounts required to pay the principal, interest and service charges related to policy premiums pursuant to the premium finance agreement or subsequent sale of such agreement. Any payments, charges, fees, normal insurance commissions or other amounts, in addition to the amounts required to pay the principal, interest, and service charges related to policy premiums paid under the premium finance agreement, shall be remitted to the original owner of the policy or to the original owner's estate if the original owner is not living at the time of the determination of the overpayment.   A violation of subsection (a) or (b) shall be deemed a fraudulent viatical settlement act.   A person shall not issue, solicit, market or otherwise promote the purchase of an insurance policy for the sole purpose of or with a primary emphasis on settling the policy.   A person, including, without limitation, a viatical settlement provider providing premium financing, shall not receive any proceeds, fees or other consideration from the policy or owner of the policy that is in addition to the amounts required to pay principal, interest and any costs or expenses incurred by the lender or borrower in connection with the premium finance agreement, except for the event of a default, unless either the default on such loan or transfer of the policy occurs pursuant to an agreement or understanding with any other person for the purpose of evading regulation under this chapter. Any payments, charges, fees or other amounts received by a person, including, without limitation, a viatical settlement provider providing premium financing in violation of this subsection (f), shall be remitted to the original owner of the policy or to the original owner's estate if the original owner is not living at the time of the determination of overpayment.   In the solicitation, application for or issuance of a life insurance policy, a person shall not employ any device, scheme or artifice to create an insurable interest in the life of a person except as allowed by law.   No viatical settlement provider shall enter into a viatical settlement contract unless the viatical settlement promotional, advertising and marketing materials, as may be prescribed by regulation, have been filed with the commissioner. In no event shall any marketing materials expressly reference that the insurance is free for any period of time. The inclusion of any reference in the marketing materials that would cause a viator to reasonably believe that the insurance is free for any period of time shall be considered a violation of this chapter.   No life insurance producer, insurance company, viatical settlement broker, viatical settlement provider or viatical settlement investment agent shall make any statement or representation to the applicant or policyholder in connection with the sale or financing of a life insurance policy to the effect that the insurance is free or without cost to the policyholder for any period of time unless provided in the policy.   
  This section shall apply to any advertising of viatical settlement contracts, viatical settlement purchase agreements or related products or services intended for dissemination in this state, including Internet advertising viewed by persons located in this state. Where disclosure requirements are established pursuant to federal regulation, this section shall be interpreted so as to minimize or eliminate conflict with federal regulation wherever possible.   Every viatical settlement licensee shall establish and at all times maintain a system of control over the content, form and method of dissemination of all advertisements of its contracts, products and services. All advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the viatical settlement licensees, as well as the individual who created or presented the advertisement. A system of control shall include regular routine notification, at least once a year, to agents and others authorized by the viatical settlement licensee that disseminate advertisements of the requirements and procedures for approval prior to the use of any advertisements not furnished by the viatical settlement licensee.   Advertisements shall be truthful and not misleading in fact or by implication. The form and content of an advertisement of a viatical settlement contract or viatical settlement purchase agreement, product or service shall be sufficiently complete and clear so as to avoid deception. It shall not have the capacity or tendency to mislead or deceive. Whether an advertisement has the capacity or tendency to mislead or deceive shall be determined by the commissioner from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.   Certain viatical settlement advertisements are deemed false and misleading on their face and are prohibited. False and misleading viatical settlement advertisements include, but are not limited to, the following representations:  Guaranteed, fully secured, 100 percent secured, fully insured, secure, safe, backed by rated insurance companies, backed by federal law, backed by state law, or state guaranty funds or similar representations;   No risk, minimal risk, low risk, no speculation, no fluctuation or similar representations;   Qualified or approved for individual retirement accounts (IRAs), Roth IRAs, 401(k) plans, simplified employee pensions (SEP), 403(b), Keogh plans, tax sheltered annuity TSA, other retirement account rollovers, tax deferred or similar representations;   Utilization of the word guaranteed to describe the fixed return, annual return, principal, earnings, profits, investment or similar representations;   No sales charges or fees or similar representations;   High yield, superior return, excellent return, high return, quick profit or similar representations; and   Purported favorable representations or testimonials about the benefits of viatical settlement contracts or viatical settlement purchase agreements as an investment, taken out of context from newspapers, trade papers, journals, radio and television programs and all other forms of print and electronic media.     The information required to be disclosed under this chapter shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the text of the advertisement so as to be confusing or misleading.  An advertisement shall not omit material information or use words, phrases, statements, references or illustrations if the omission or use has the capacity, tendency or effect of misleading or deceiving viators, purchasers or prospective purchasers as to the nature or extent of any benefit, loss covered, premium payable or state or federal tax consequence. The fact that the viatical settlement contract or viatical settlement purchase agreement offered is made available for inspection prior to consummation of the sale, or an offer is made to refund the payment if the viator is not satisfied or that the viatical settlement contract or viatical settlement purchase agreement includes a free look period that satisfies or exceeds legal requirements, does not remedy misleading statements.   An advertisement shall not use the name or title of a life insurance company or a life insurance policy unless the advertisement has been approved by the insurer.   An advertisement shall not represent that premium payments will not be required to be paid on the life insurance policy that is the subject of a viatical settlement contract or viatical settlement purchase agreement in order to maintain that policy, unless that is the fact.   An advertisement shall not state or imply that interest charged on an accelerated death benefit or a policy loan is unfair, inequitable or in any manner an incorrect or improper practice.   The words free, no cost, without cost, no additional cost, at no extra cost or words of similar import shall not be used with respect to any benefit or service unless true. An advertisement may specify the charge for a benefit or a service or may state that a charge is included in the payment or use other appropriate language.    Testimonials, appraisals or analysis used in advertisements must:   Be genuine;   Represent the current opinion of the author;   Be applicable to the viatical settlement contract or viatical settlement purchase agreement, product or service advertised, if any; and   Be accurately reproduced with sufficient completeness to avoid misleading or deceiving prospective viators or purchasers as to the nature or scope of the testimonials, appraisal, analysis or endorsement.     In using testimonials, appraisals or analysis, a licensee under this chapter makes as its own all the statements contained therein, and the statements are subject to this section.   If the individual making a testimonial, appraisal, analysis or an endorsement has a financial interest in the party making use of the testimonial, appraisal, analysis or endorsement, either directly or through a related entity as a stockholder, director, officer, employee or otherwise, or receives any benefit directly or indirectly other than required union scale wages, that fact shall be prominently disclosed in the advertisement.   An advertisement shall not state or imply that a viatical settlement contract or viatical settlement purchase agreement, benefit or service has been approved or endorsed by a group of individuals, society, association or other organization unless that is the fact and unless any relationship between an organization and the viatical settlement licensee is disclosed. If the entity making the endorsement or testimonial is owned, controlled or managed by the viatical settlement licensee, or receives any payment or other consideration from the viatical settlement licensee for making an endorsement or testimonial, that fact shall be disclosed in the advertisement.   When an endorsement refers to benefits received under a viatical settlement contract or viatical settlement purchase agreement, all pertinent information shall be retained for a period of five (5) years after its use.       An advertisement shall not contain statistical information unless it accurately reflects recent and relevant facts. The source of all statistics used in an advertisement shall be identified.   An advertisement shall not disparage insurers, viatical settlement providers, viatical settlement brokers, viatical settlement investment agents, insurance producers, policies, services or methods of marketing.   The name of the viatical settlement licensee shall be clearly identified in all advertisements about the licensee or its viatical settlement contract or viatical settlement purchase agreements, products or services, and if any specific viatical settlement contract or viatical settlement purchase agreement is advertised, the viatical settlement contract or viatical settlement purchase agreement shall be identified either by form number or some other appropriate description. If an application is part of the advertisement, the name of the viatical settlement provider shall be shown on the application.   An advertisement shall not use a trade name, group designation, name of the parent company of a viatical settlement licensee, name of a particular division of the viatical settlement licensee, service mark, slogan, symbol or other device or reference without disclosing the name of the viatical settlement licensee, if the advertisement would have the capacity or tendency to mislead or deceive as to the true identity of the viatical settlement licensee or to create the impression that a company other than the viatical settlement licensee would have any responsibility for the financial obligation under a viatical settlement contract or viatical settlement purchase agreement.   An advertisement shall not use any combination of words, symbols or physical materials that by their content, phraseology, shape, color or other characteristics are so similar to a combination of words, symbols or physical materials used by a government program or agency or otherwise appear to be of such a nature that they tend to mislead prospective viators or purchasers into believing that the solicitation is in some manner connected with a government program or agency.   An advertisement may state that a viatical settlement licensee is licensed in the state where the advertisement appears; provided, that it does not exaggerate that fact or suggest or imply that a competing viatical settlement licensee may not be so licensed. The advertisement may ask the audience to consult the licensee's web site or contact the department of insurance to find out if the state requires licensing and, if so, whether the viatical settlement provider, viatical settlement broker or viatical settlement investment agent is licensed.   An advertisement shall not create the impression that the viatical settlement provider, its financial condition or status, the payment of its claims or the merits, desirability or advisability of its viatical settlement contracts or viatical settlement purchase agreement forms are recommended or endorsed by any government entity.   The name of the actual licensee shall be stated in all of its advertisements. An advertisement shall not use a trade name, any group designation, name of any affiliate or controlling entity of the licensee, service mark, slogan, symbol or other device in a manner that would have the capacity or tendency to mislead or deceive as to the true identity of the actual licensee or create the false impression that an affiliate or controlling entity would have any responsibility for the financial obligation of the licensee.   An advertisement shall not directly or indirectly create the impression that any division or agency of the state or of the United States government endorses, approves or favors:  Any viatical settlement licensee or its business practices or methods of operation;   The merits, desirability or advisability of any viatical settlement contract or viatical settlement purchase agreement;   Any viatical settlement contract or viatical settlement purchase agreement; or   Any life insurance policy or life insurance company.     If the advertiser emphasizes the speed with which the viatication will occur, the advertising must disclose the average time frame from completed application to the date of offer and from acceptance of the offer to receipt of the funds by the viator.   If the advertising emphasizes the dollar amounts available to viators, the advertising shall disclose the average purchase price as a percent of face value obtained by viators contracting with the licensee during the past six (6) months.   
  Fraudulent Viatical Settlement Acts, Interference and Participation of Convicted Felons Prohibited.  A person shall not commit a fraudulent viatical settlement act.   A person shall not knowingly or intentionally interfere with the enforcement of this chapter or investigations of suspected or actual violations of this chapter.   A person in the business of viatical settlements shall not knowingly or intentionally permit any person convicted of a felony involving dishonesty or breach of trust to participate in the business of viatical settlements.     Fraud Warning Required.  Viatical settlement contracts and purchase agreement forms and applications for viatical settlements, regardless of the form of transmission, shall contain the following statement or a substantially similar statement:  Any person who knowingly presents false information in an application for insurance, viatical settlement contract or a viatical settlement purchase agreement is guilty of a crime and may be subject to fines and confinement in prison.    The lack of a statement as required in subdivision (b)(1) does not constitute a defense in any prosecution for a fraudulent viatical settlement act.     Mandatory Reporting of Fraudulent Viatical Settlement Acts.  Any person engaged in the business of viatical settlements having knowledge or a reasonable suspicion that a fraudulent viatical settlement act is being, will be or has been committed shall provide to the commissioner such information as required by, and in a manner prescribed by, the commissioner.   Any other person having knowledge or a reasonable belief that a fraudulent viatical settlement act is being, will be, or has been committed may provide to the commissioner the information required by, and in a manner prescribed by, the commissioner.     Immunity from Liability.  No civil liability shall be imposed on and no cause of action shall arise from a person's furnishing information concerning suspected, anticipated or completed fraudulent viatical settlement acts or suspected or completed fraudulent insurance acts, if the information is provided to or received from:  The commissioner or the commissioner's employees, agents or representatives;   Federal, state or local law enforcement or regulatory officials or their employees, agents or representatives;   A person involved in the prevention and detection of fraudulent viatical settlement acts or that person's agents, employees or representatives;   The National Association of Insurance Commissioners (NAIC), the Financial Industry Regulatory Authority (FINRA), the North American Securities Administrators Association (NASAA), or their employees, agents or representatives, or other regulatory body overseeing life insurance, viatical settlements, securities or investment fraud; or   The life insurer that issued the life insurance policy covering the life of the insured.     Subdivision (d)(1) shall not apply to statements made with actual malice. In an action brought against a person for filing a report or furnishing other information concerning a fraudulent viatical settlement act, the party bringing the action shall plead specifically any allegation that subdivision (d)(1) does not apply because the person filing the report or furnishing the information did so with actual malice.   A person furnishing information as identified in subdivision (d)(1) shall be entitled to an award of attorney's fees and costs if the person is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this subdivision (d)(3), a proceeding is substantially justified if it had a reasonable basis in law or fact at the time that it was initiated. However, such an award does not apply to any person furnishing information concerning the persons own fraudulent viatical settlement acts.   This section does not abrogate or modify common law or statutory privileges or immunities enjoyed by a person described in subdivision (d)(1).     Confidentiality.  The documents and evidence provided pursuant to subsection (d) or obtained by the commissioner in an investigation of suspected or actual fraudulent viatical settlement acts shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.   Subdivision (e)(1) does not prohibit release by the commissioner of documents and evidence obtained in an investigation of suspected or actual fraudulent viatical settlement acts:  In administrative or judicial proceedings to enforce laws administered by the commissioner;   To federal, state or local law enforcement or regulatory agencies, to an organization established for the purpose of detecting and preventing fraudulent viatical settlement acts or to the NAIC; or   At the discretion of the commissioner, to a person in the business of viatical settlements that is aggrieved by a fraudulent viatical settlement act.     Release of documents and evidence under subdivision (e)(2) does not abrogate or modify the privilege granted in subdivision (e)(1).     Other Law Enforcement or Regulatory Authority.  This chapter shall not:  Preempt the authority or relieve the duty of other law enforcement or regulatory agencies to investigate, examine and prosecute suspected violations of law;   Prevent or prohibit a person from voluntarily disclosing information concerning viatical settlement fraud to a law enforcement or regulatory agency other than the department of commerce and insurance; or   Limit the powers granted elsewhere by the laws of this state to the commissioner or an insurance fraud unit to investigate and examine possible violations of law and to take appropriate action against wrongdoers.     Viatical Settlement Antifraud Initiatives.  Viatical settlement providers and viatical settlement brokers shall have in place antifraud initiatives reasonably calculated to detect, prosecute and prevent fraudulent viatical settlement acts. At the discretion of the commissioner, the commissioner may order, or a licensee may request and the commissioner may grant, such modifications of the required initiatives in subdivision (g)(2) as necessary to ensure an effective antifraud program. The modifications may be more or less restrictive than the required initiatives so long as the modifications may reasonably be expected to accomplish the purpose of this chapter.   Antifraud initiatives shall include:  Fraud investigators, who may be viatical settlement provider or viatical settlement broker employees or independent contractors; and   An antifraud plan, which shall be submitted to the commissioner. The antifraud plan shall include, but not be limited to:   A description of the procedures for detecting and investigating possible fraudulent viatical settlement acts and procedures for resolving material inconsistencies between medical records and insurance applications;   A description of the procedures for reporting possible fraudulent viatical settlement acts to the commissioner;   A description of the plan for antifraud education and training of underwriters and other personnel; and   A description or chart outlining the organizational arrangement of the antifraud personnel who are responsible for the investigation and reporting of possible fraudulent viatical settlement acts and investigating unresolved material inconsistencies between medical records and insurance applications.       Antifraud plans submitted to the commissioner shall be privileged and confidential and shall not be a public record and shall not be subject to discovery or subpoena in a civil or criminal action.     
  In addition to the penalties and other enforcement provisions of this chapter, if any person violates this chapter or any regulation implementing this chapter, the commissioner may seek an injunction in a court of competent jurisdiction and may apply for temporary and permanent orders that the commissioner determines are necessary to restrain the person from committing the violation.   Any person damaged by the acts of a person in violation of this chapter may bring a civil action against the person committing the violation in a court of competent jurisdiction.   A violation of this chapter attendant to the execution of a viatical settlement purchase agreement renders the viatical settlement purchase agreement voidable and subject to rescission by the viatical settlement purchaser, upon return of the policy received to the viatical settlement provider. Suit for rescission may be brought in a court of competent jurisdiction or where the alleged violator resides or has a principal place of business or where the alleged violation occurred.   The commissioner may issue, in accordance with  56-2-305, a cease and desist order upon a person that violates this chapter, any regulation or order adopted by the commissioner or any written agreement entered into with the commissioner.   When the commissioner finds that an activity in violation of this chapter presents an immediate danger to the public that requires an immediate final order, the commissioner may issue an emergency cease and desist order reciting with particularity the facts underlying the findings. The emergency cease and desist order is effective immediately upon service of a copy of the order on the respondent and remains effective for ninety (90) days. If the commissioner begins nonemergency cease and desist proceedings, the emergency cease and desist order remains effective, absent an order by a court of competent jurisdiction pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3.   In addition to the penalties and other enforcement provisions of this chapter, any person that violates this chapter is subject to a civil penalty of up to ten thousand dollars ($10,000) per violation. Imposition of civil penalties shall be pursuant to an order of the commissioner issued under the Uniform Administrative Procedures Act. The commissioner's order may require a person found to be in violation of this chapter to make restitution to persons aggrieved by violations of this chapter.    It is an offense to commit a fraudulent viatical settlement act. A violation of this subdivision (g)(1) is an offense graded as provided in  39-14-105, based upon the greater of:  The value of property, services or other benefit wrongfully obtained or attempted to be obtained; or   The aggregate economic loss suffered by any person as a result of the violation.     A person who commits an offense as provided in subdivision (g)(1) shall be ordered to pay restitution to persons aggrieved by such act in addition to any other punishment provided for such offense.     Except for a fraudulent viatical settlement act committed by a viator, the enforcement provisions and penalties of this section shall not apply to a viator.   
 A violation of this chapter, including the commission of a fraudulent viatical settlement act, shall be considered an unfair trade practice under chapter 8 of this title, subject to the penalties contained in chapter 8 of this title.  
 The commissioner shall have the authority to:   Promulgate rules to effectuate the purposes of this chapter. The rules shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5;   Establish standards for evaluating reasonableness of payments under viatical settlement contracts for persons who are terminally or chronically ill. This authority includes, but is not limited to, regulation of discount rates used to determine the amount paid in exchange for assignment, transfer, sale, devise or bequest of a benefit under a life insurance policy insuring the life of a person who is chronically or terminally ill;   Establish appropriate licensing requirements, fees and standards for continued licensure for viatical settlement providers, brokers and viatical settlement investment agents;   Require a bond or other mechanism for financial accountability for viatical settlement providers and brokers;   Adopt rules governing the relationship and responsibilities of both insurers and viatical settlement providers, viatical settlement brokers and viatical settlement investment agents during the viatication of a life insurance policy or certificate; and   Establish guidelines and standards of permissible and impermissible conduct in the advertising of viatical settlements to assure that product descriptions are presented in a manner that prevents unfair, deceptive or misleading advertising, and is conducive to accurate presentation and description of viatical settlements through the advertising media and materials used by viatical settlement licensees.   
 This chapter shall be known and may be cited as the Tennessee Prepaid Limited Health Service Organization Act of 2000.  
 As used in this chapter, the term:   Capitation means the fixed amount paid by a prepaid limited health service organization to a health care provider under contract with the prepaid limited health service organization in exchange for the rendering of covered limited health services;   Commissioner means the commissioner of commerce and insurance;   Department means the department of commerce and insurance;   Enrollee means an individual, including dependents, who is entitled to limited health services pursuant to a contract, or any other evidence of coverage, with a health maintenance organization, licensed pursuant to chapter 32 of this title, or a contract with a state or federal agency;   Evidence of coverage means the certificate, agreement, membership card, or contract issued pursuant to this chapter setting forth the coverage to which an enrollee is entitled through a health maintenance organization licensed pursuant to chapter 32 of this title or a state or federal agency;   Insolvent means that all the statutory assets of the prepaid limited health service organization, if made immediately available, would not be sufficient to discharge all of its statutory liabilities or that the prepaid limited health service organization is unable to pay its debts as they become due in the usual course of business;   Limited health service means dental care services, vision care services, mental health services, substance abuse services, and pharmaceutical services. Limited health service does not include inpatient, hospital surgical services, or emergency services except as the services are provided incident to the limited health services set forth in this subdivision (7). However, limited health service does not exclude inpatient mental health or inpatient substance abuse services;   Prepaid limited health service contract means any contract entered into by a prepaid limited health service organization with a health maintenance organization or a state or federal agency to provide limited health services in exchange for a prepaid per capita or prepaid aggregate fixed sum;   Prepaid limited health service organization means any person, corporation, partnership, or any other entity that, in return for a prepayment from a health maintenance organization or a state or federal agency, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers. A prepaid limited health service organization may not contract with individuals, but only through a health maintenance organization or a state or federal agency. This shall not limit the organization from contracting with providers to provide contracted services. Prepaid limited health service organization does not include:  An entity otherwise authorized pursuant to the laws of this state to indemnify for any limited health service;   A provider or entity when providing limited health services pursuant to a contract with a prepaid limited health service organization, a health maintenance organization, a health insurer, or a self-insurance plan; or   Any person who, in exchange for fees, dues, charges or other consideration, provides access to a limited health service provider without assuming any responsibility for payment for the limited health service or any portion of the limited health service;     Provider means, but is not limited to, any physician, dentist, health facility, or other person or institution that is duly licensed in this state to deliver limited health services;   Qualified independent actuary means an actuary who is a member of the American Academy of Actuaries or the Society of Actuaries and who has experience in establishing rates for limited health services and who has no financial or employment interest in the prepaid limited health service organization;   Reporting period means the annual accounting period or fiscal year, or any part of the accounting period or fiscal year, of the prepaid limited health service organization. The calendar year shall be the fiscal year for each  prepaid limited health service organization;   Subscriber means an individual on whose behalf a contract or arrangement has been entered into with a prepaid limited health service organization for health care services or other persons who also receive health care services as a result of the contract;   Surplus notes means debt that has been subordinated to all claims of subscribers and general creditors of the organization and the debt instrument shall so state;   Statutory accounting principles means generally accepted accounting principles, except as modified by this chapter; and   Working capital means current assets minus current liabilities.   
 Except as provided in this chapter, prepaid limited health service organizations are governed by this chapter and are exempt from this title unless specifically referenced.  
 Nothing in this title or this chapter authorizes any prepaid limited health service organization to transact any insurance business other than that specifically authorized by this chapter, or otherwise to engage in any other type of insurance unless it is authorized under a certificate of authority issued by the department under the Tennessee insurance code.  
  A person, corporation, partnership, or other entity may not operate a prepaid limited health service organization in this state without obtaining and maintaining a certificate of authority from the department pursuant to this chapter.   A political subdivision of this state that is operating an emergency medical services system and offers a prepaid ambulance service plan as a part of its emergency medical services system shall be exempt from this chapter and all other provisions of this title.   An insurer, while authorized to transact health insurance in this state, or a health maintenance organization possessing a valid certificate of authority in this state, or a duly licensed medical and hospital service corporation may also provide services under this chapter without additional qualification or authority, but shall be otherwise subject to the applicable provisions of this chapter.   
  Before any entity may operate a prepaid limited health service organization, it must obtain a certificate of authority from the department. An application for a certificate of authority to operate a prepaid limited health service organization must be filed with the department on a form prescribed by the department. The application must be sworn to by an officer or authorized representative of the applicant and be accompanied by the following:  A copy of the applicant's basic organizational document, including the articles of incorporation, articles of association, partnership agreements, trust agreement, or other applicable documents and all amendments to the documents;   A copy of all bylaws, rules, and regulations, or similar documents, if any, regulating the conduct of the applicant's internal affairs;   A list of the names, addresses, official positions, and biographical information of the individuals who are responsible for conducting the applicant's affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten percent (10%) or more of the voting securities of the applicant. The listing must fully disclose the extent and nature of any contracts or arrangements between any individual who is responsible for conducting the applicant's affairs and the prepaid limited health service organization, including any possible conflicts of interest;   A complete biographical statement, on forms prescribed by the department, an independent investigation report, with respect to each individual identified under subdivision (a)(3);   A statement generally describing the applicant, its facilities and personnel, and the limited health service or services to be offered;   A copy of the form of all contracts made or to be made between the applicant and any providers regarding the provision of limited health services to enrollees;   A copy of the form of any contract made or arrangement to be made between the applicant and any person listed in subdivision (a)(3);   A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant's behalf of any function, including, but not limited to, marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees;   A copy of the form of any prepaid limited health service contract that is to be issued to employers, unions, trustees, individuals, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers;   A copy of the applicant's most recent financial statements audited by an independent certified public accountant;   A copy of the applicant's financial plan, including a three-year projection of anticipated operating results, a statement of the sources of funding, and provisions for contingencies, for which projection all material assumptions shall be disclosed;   A schedule of rates and charges for each contract to be used that contains an opinion from a qualified independent actuary that the rates are not inadequate, excessive, or discriminatory;   A description of the proposed method of marketing;   A description of the subscriber complaint procedures to be established and maintained as required under  56-51-131;   A description of how the applicant will comply with  56-51-138;   The fee for issuance of a certificate of authority as provided in  56-51-145; and   Other information the department may reasonably require to make the determinations required by this chapter.     The applicant shall meet the network adequacy requirements established pursuant to  56-7-2356.   
  Following receipt of an application filed pursuant to  56-51-106, the department shall review the application and notify the applicant of any deficiencies contained in the application. The department shall issue a certificate of authority to an applicant who has filed a completed application in conformity with  56-51-106, upon payment of the fees specified by  56-51-145 and upon the department being satisfied that the following conditions are met:  The requirements of  56-51-106 have been fulfilled;   The entity has met the applicable minimum net worth requirements and working capital requirements as provided under  56-32-112;   The entity furnished evidence of adequate insurance coverage, including, but not limited to, general liability or professional liability coverage, or an adequate plan for self-insurance to respond to claims for injuries arising out of the furnishing of covered services;   The ownership, control, and management of the entity are competent and trustworthy and possess managerial experience that would make the proposed operation beneficial to the subscribers. The department shall not grant or continue authority to transact the business of a prepaid limited health service organization in this state at any time during which the department has good reason to believe that the ownership, control, or management of the organization includes any person whose business operations are or have been marked by business practices or conduct that is to the detriment of the public, stockholders, investors, or creditors;   The entity has demonstrated compliance with  56-51-138 by obtaining a blanket fidelity bond in the amount of at least fifty thousand dollars ($50,000), issued by a licensed insurance carrier in this state, that will reimburse the entity in the event that anyone handling the funds of the entity either misappropriates or absconds with the funds. All employees handling the funds must be covered by the blanket fidelity bond. However, the fidelity bond need not cover an individual who owns one hundred percent (100%) of the stock of the organization if the stockholder maintains total control of the organization's financial assets, books and records, and fidelity bond coverage is not available for the individual. An agent licensed under this title may, either directly or indirectly, represent the prepaid limited health service organization in the solicitation, negotiation, effectuation, procurement, receipt, delivery, or forwarding of any subscriber's contract, or collect or forward any consideration paid by the subscriber to the prepaid limited health service organization. The licensed agent shall not be required to post the bond required by this subsection (a);   The prepaid limited health service organization has a grievance procedure that will facilitate the resolution of subscriber grievances and that includes both formal and informal steps available within the organization;   The applicant is financially responsible and may reasonably be expected to meet its obligations to enrollees and to prospective enrollees. In making this determination, the department may consider:  The financial soundness of the applicant's arrangements for limited health services and the minimum standard rates, deductibles, copayments, and other patient charges used in connection with the arrangements;   The adequacy of surplus, other sources of funding, and provisions for contingencies; and   The manner in which the requirements of  56-51-137 have been fulfilled;     The agreements with providers for the provision of limited health services contain the provisions required by  56-51-128;   Any deficiencies identified by the department have been corrected; and   All requirements of this chapter have been met.     If the certificate of authority is denied, the department shall notify the applicant and shall specify the reasons for denial in the notice.   
 In order to maintain its eligibility for a certificate of authority, a prepaid limited health service organization must continue to meet all conditions required to be met under this chapter and the rules adopted under this chapter for the initial application for and issuance of its certificate of authority under  56-51-106 and 56-51-107.  
 Any entity licensed under this chapter that provides services solely to Title XIX program recipients under a contract with the state shall be exempt from  56-51-106(12), 56-51-112(e) and (k), 56-51-113, 56-51-117, 56-51-123, 56-51-127, and 56-51-134(b)(5)(A) and (B). Further, the commissioner may by rule exempt the entities from other provisions of this chapter where determined by the commissioner to be reasonable and appropriate. The rules shall be promulgated in accordance with  56-51-153.  
 All contracts or forms utilized by the prepaid limited health services organization, whether directed to providers or enrollees, shall be written in the English language.  
 All prepaid limited health services contracts, marketing materials, and literature must disclose in boldfaced type the name of the organization and disclose that the organization is a prepaid limited health service organization licensed under this chapter.  
  Any entity issued a certificate of authority and otherwise in compliance with this chapter may enter into contracts in this state to provide an agreed-upon set of limited health services to subscribers in exchange for a prepaid per capita sum or a prepaid aggregate fixed sum from a health maintenance organization or a state or federal agency.  The department shall disapprove any form filed under this subsection (a), or withdraw any previous approval of the form, if the form:  Is in any respect in violation of, or does not comply with, this chapter or rule adopted under this chapter;   Contains or incorporates by reference, where the incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses or exceptions and conditions that deceptively affect the risk purported to be assumed in the general coverage of the contract;   Has any title, heading, or other indication of its provisions that is misleading;   Is printed or otherwise reproduced in such a manner as to render any material provision of the form substantially illegible;   Contains provisions that are unfair, inequitable, or contrary to the public policy of this state or that encourage misrepresentation; or   Charges rates that are determined by the department to be inadequate, excessive, or unfairly discriminatory.     It is not the intent of this subsection (a) to restrict unduly the right to modify rates in the exercise of reasonable business judgment.   All contracts shall be for a minimum period of twelve (12) months, unless the contract holder requests, in writing, a shorter contract period.     Every prepaid limited health service organization shall provide each subscriber a contract, a certificate, membership card, or member handbook that must clearly state all of the services to which a subscriber is entitled under the contract and must include a clear and understandable statement of any limitations on the services or kinds of services to be provided, including any copayment feature or schedule of benefits required by the contract or by any insurer or entity that is underwriting any of the services offered by the prepaid limited health service organization. The contract, certificate, provider listing, or member handbook must also state where and in what manner the health services may be obtained.   The documents provided pursuant to subsection (b) must have a clear and understandable description of the method used by the prepaid limited health service organization for resolving subscriber grievances and must contain the address of the department and the department's toll-free consumer hotline.   All prepaid limited health service coverage, benefits, or services for a member of the family of the subscriber must, as to the family member's coverage, benefits, or services, provide also that the coverage, benefits, or services applicable for children will be provided with respect to a preenrolled newborn child of the subscriber, or covered family member of the subscriber, from the moment of birth, or adoption pursuant to state law.   No alteration of any written application for any prepaid limited health services contract may be made by any person other than the applicant without the applicant's written consent, except that insertions may be made by the prepaid limited health service organization for administrative purposes only, in a manner as to indicate clearly that the insertions are not to be ascribed to the applicant.   No contract may contain any waiver of rights or benefits provided to or available to subscribers under any law or rule applicable to prepaid limited health service organizations.   Each document provided pursuant to subsection (b) must state that emergency services, if any, will be provided to subscribers in emergency situations not permitting treatment through the prepaid limited health service organization providers, without prior notification to and approval of the organization. The prepaid limited health services document must contain a definition of emergency services, describe procedures for determination by the prepaid limited health service organization of whether the services qualify for reimbursement as emergency services, and contain specific examples of what does constitute an emergency.    All prepaid limited health services contracts, certificates, and member handbooks must contain the following provision:  Grace Period: This contract has a (insert number of days, but not less than ten (10) days)  -day grace period. This provision means that if any required premium is not paid on or before the date it is due, it may be paid subsequently during the grace period. During the grace period, the contract will stay in force.    Subdivision (h)(1) does not apply to certificates or member handbooks delivered to individual subscribers under a group prepaid limited health services contract when the employer who will hold the contract on behalf of the subscriber group pays the entire premium for the individual subscriber. However, the required provision applies to the group prepaid limited health services contract.     The contract must clearly disclose the intent of the prepaid limited health service organization as to the applicability or nonapplicability of coverage to preexisting conditions. The contract must also disclose what services are excludable.   All prepaid limited health service organization contracts that provide coverage for a member of the family of the subscriber, must, as to the family member's coverage, provide that coverage, benefits, or services applicable for children will be provided with respect to an adopted child of the subscriber, which child is placed in compliance with state adoption law, from the moment of placement in the residence of the subscriber. In the case of a newborn child, coverage begins from the moment of birth if a written agreement to adopt the child has been entered into by the subscriber prior to the birth of the child whether or not the agreement is enforceable. However, coverage for the child is not required if the child is not ultimately adopted by the subscriber in compliance with state adoption law.   Each prepaid limited health service organization shall provide prospective enrollees, upon request, with written information about the terms and conditions of the plan in accordance with subsection (b) to enable prospective enrollees to make informed decisions about accepting a managed-care system of limited health care delivery. All marketing materials printed by the prepaid limited health services organization must contain a notice in boldfaced type that states that the information required under this section is available to prospective enrollees upon request.   Each prepaid limited health service organization shall make available to all subscribers, upon request, a description of the authorization and referral process for services or a description of the process used to analyze the qualifications and credentials of providers under contract with the organization.   
  The rates charged by any prepaid limited health service organization to its subscribers shall not be excessive, inadequate, or unfairly discriminatory. The department may require whatever information it deems necessary to determine that a rate or proposed rate meets the requirements of this section.   In determining whether a rate is in compliance with subsection (a), the department must take into consideration the limited services provided, the method in which the services are provided, and the method of provider payment. This section may not be construed as authorizing the department to establish by rule minimum loss ratios for prepaid limited health service organizations' rates.   
   No prepaid limited health services contract, certificate of coverage, application, enrollment form, rider, endorsement, and applicable rates to be charged may be delivered in this state unless the forms and rates have been filed with the department by or on behalf of the prepaid limited health service organization and have been approved by the department. Every form filed shall be identified by a unique form number placed in the lower left corner of each form. If a prepaid limited health service organization desires to amend any contract with its subscribers or any certificate or member handbook, or desires to change any rate charged for the contract or to change any basic prepaid limited health services contract, certificate, grievance procedure, or member handbook form, or application form where written application is required and is to be made a part of the contract, or printed amendment, addendum, rider, or endorsement form or form renewal certificate, it must file the changes thirty (30) days prior to the effective date of the proposed change. At least thirty (30) days' written notice must be provided to the subscriber before application of any approved change in rates. In the case of a group enrollee, there may be a contractual agreement with the prepaid limited health service organization to have the contract holder provide the required notice to the individual enrollees of the group. Any proposed change must contain information as required by this section.   The prepaid limited health service organization's certification must be prepared by an independent actuary. The chief executive officer of the prepaid limited health service organization must review and sign the certification indicating the officer's agreement with its conclusions. Following receipt of notice of any disapproval or withdrawal of approval, no prepaid limited health service organization may issue or use any form disapproved by the department or as to which the department has withdrawn approval.     If the filings are not disapproved by the department within thirty (30) days of the receipt of complete filings, the filings shall be deemed approved.   
 A prepaid limited health services contract may contain additional provisions not inconsistent with this chapter that are:   Necessary because of the manner in which the organization is constituted or operated in order to state the rights and obligations of the parties to the contract; or   Desired by the organization and neither prohibited by law nor in conflict with any provisions required to be included.   
 A prepaid limited health service organization must comply with chapter 7, part 27 of this title.  
  A prepaid limited health service organization may not expel or refuse to renew the coverage of or refuse to enroll any individual member of a subscriber group through a health maintenance organization or a state or federal agency on the basis of the race, color, creed, disability, marital status, sex, or national origin of the subscriber or individual.   A prepaid limited health service organization may not expel or refuse to renew the coverage of any individual member of a subscriber group through a health maintenance organization or a state or federal agency on the basis of the age or health status of the subscriber or individual.   For group solicitations through a contract with a health maintenance organization, a prepaid limited health service organization may preunderwrite to determine group acceptability. However, once a contract is issued, a prepaid limited health service organization must provide coverage to all existing enrollees and their dependents, and newly employed enrollees and their dependents who have enrolled within thirty (30) days of eligibility or membership.   Nothing in this section prohibits a prepaid limited health service organization from requiring in its contracts with health maintenance organizations that, as a condition of continued eligibility for membership, dependents of a subscriber upon reaching a specified age convert to a converted contract. Coverage must continue to be provided to children with a disability who are incapable of self-sustaining employment by reason of mental or physical disability, and substantially dependent upon the enrollee for support and maintenance.   
 No prepaid limited health services contract may contain any provision purporting to make any portion of the articles of incorporation, charter, bylaws, or other organizational document of the prepaid limited health service organization a part of the contract unless the provision is set forth in full in the contract. Any contract provision in violation of this section is invalid unless the provision operates to the benefit of the subscriber.  
  Every prepaid limited health services contract must be executed in the name of and on behalf of the prepaid limited health service organization by its officer, attorney in fact, employee, or representative duly authorized by the organization.   A facsimile signature of any executing individual may be used in lieu of an original signature.   No prepaid limited health services contract that is otherwise valid is rendered invalid by reason of the apparent execution of the contract on behalf of the prepaid limited health service organization by the imprinted facsimile signature of an individual not authorized so to execute as of the date of the contract.   
  Any prepaid limited health services contract rider, endorsement, attachment, or addendum otherwise valid that contains any condition or provision not in compliance with the requirements of this chapter is not thereby rendered invalid, but must be construed and applied in accordance with the conditions and provisions as they would have applied had the contract, rider, endorsement, attachment, or addendum been in full compliance with this chapter. If an organization issues or delivers any contract for an amount that exceeds any limitations otherwise provided in this chapter, the organization is liable to the subscriber or the subscriber's beneficiary for the full amount stated in the contract in addition to any other penalties that may be imposed under this chapter.   Any prepaid limited health services contract delivered or issued for delivery in this state covering a subscriber, which subscriber pursuant to this chapter the organization may not lawfully cover under the contract, is cancelable at any time by the organization, any provision of the contract to the contrary notwithstanding, and the organization must promptly cancel the contract in accordance with the request of the department for cancellation. No illegality or cancellation may be deemed to relieve the organization of any liability incurred by it under the contract while in force or to prohibit the organization from retaining the pro rata earned premium or rate on the contract. This subsection (b) does not relieve the organization from any penalty otherwise incurred by the organization under this chapter for any such violation.   
 Every prepaid limited health services contract must be construed according to the entirety of its terms and conditions as set forth in the contract and as amplified, extended, or modified by any application, endorsement, attachment, or addendum.  
 Unless delivered upon execution or issuance, a prepaid limited health services contract, certificate of coverage, or member handbook must be mailed or delivered to the health maintenance organization or to the state or federal agency with whom the prepaid limited health services organization has contracted prior to the effective date of coverage by the prepaid limited health service organization.  
  Except for nonpayment of premium or termination of eligibility, a prepaid limited health service organization may not cancel or otherwise terminate or fail to renew a prepaid limited health services contract without giving the subscriber and the health maintenance organization or state or federal agency with whom it has contracted at least forty-five (45) days' notice in writing of the cancellation, termination, or nonrenewal of the contract. The written notice must state the reason or reasons for the cancellation, termination, or nonrenewal. The only reasons for cancellation at the time other than the renewal period shall be as follows:  The subscriber's behavior is disruptive, unruly, abusive, unlawful, fraudulent, or uncooperative to the extent that the subscriber's continuing participation seriously impairs the organization's ability to provide services to other subscribers;   Fraud or material misrepresentation in applying for or presenting any claim for benefits under the contract;   Misuse of the documents provided as evidence of benefits available pursuant to the contract; or   Furnishing to the organization, by the subscriber, incorrect or incomplete information for the purposes of fraudulently obtaining services.     Prior to disenrollment, the organization must make an effort to resolve the problem through the grievance procedure and must determine that the subscriber's behavior is not due to use of the services provided or mental illness. All prepaid limited health services contracts must contain a clause that requires that this notice be given. In the case of a prepaid limited health services contract issued to an employer holding the contract on behalf of the subscriber group, the prepaid limited health service organization may make the notification through the employer, and, if the prepaid limited health service organization elects to take this action through the employer, the organization shall be deemed to have complied with this section upon notifying the employer of the requirements of this section and requesting the employer to forward the required notice to all subscribers.   
  No other provision of this title applies to a prepaid limited health service organization, unless a prepaid limited health service organization is specifically mentioned in the provision.   Except as provided in this chapter, this title does not apply to prepaid limited health service organizations certificated under this chapter. Any person, entity, or prepaid limited health service organization operating without a subsisting certificate of authority in violation of this chapter or rules adopted under this chapter, in addition to being subject to this chapter, is subject to the insurance code.   The department is vested with all powers granted to it under the insurance code with respect to the investigation of any violation of this chapter.   
 Each prepaid limited health service organization may accept from a health maintenance organization licensed pursuant to chapter 32 of this title, or a state or federal agency payments covering all or part of the cost of contracts entered into between the prepaid limited health service organization and its subscribers.  
  No entity certificated as a prepaid limited health service organization, other than a licensed insurer or health maintenance organization insofar as its name is concerned, may use in its name, contracts, or literature any of the words insurance, casualty, surety, mutual, or HMO, or any other words descriptive of the insurance, casualty, HMO, or surety business or deceptively similar to the name or description of any insurance, HMO, or surety corporation doing business in this state.   No person, entity, or health care plan not certificated under this chapter may use in its name, logo, contracts, or literature the phrase prepaid limited health services contract or the initials PLHSC to imply, directly or indirectly, that it is a prepaid limited health service organization or hold itself out to be a prepaid limited health service organization.   
 Every prepaid limited health services contract must provide that termination of the contract by the prepaid limited health service organization is without prejudice to any continuous loss that commenced while the contract was in force. Extension of benefits beyond the period the contract was in force must be until the specific treatment or procedure undertaken upon any subscriber has been completed or for ninety (90) days, whichever is the lesser period of time.  
  Whenever a contract exists between a prepaid limited health service organization and a provider, and the organization fails to meet its obligations to pay fees for services already rendered to a subscriber, who is in good standing, the prepaid limited health service organization is liable for the fee or fees rather than the subscriber, and the contract must so state.   No subscriber, who is in good standing, of a prepaid limited health service organization is liable to any provider of health care services for any services covered by the prepaid limited health service organization.   No provider of prepaid limited health care services or any representative of the provider may collect or attempt to collect from a subscriber any money for services covered by a prepaid limited health service organization, and no provider or representative of the provider may maintain any action against a subscriber of a prepaid limited health service organization to collect money owed to the provider by a prepaid limited health service organization.   Every contract between a prepaid limited health service organization and a provider of health care services must be in writing and must contain a provision that the subscriber is not liable to the provider for any services covered by the subscriber's or enrollee's contract with the prepaid limited health service organization.   This section does not apply to the amount of any deductible or copayment that is not covered by the contract, or for services not authorized by the prepaid limited health service organization.    For all provider contracts, the contracts must provide that the provider will provide no less than ninety (90) days' advance written notice to the prepaid limited health service organization before cancelling the contract with the prepaid limited health service organization for any reason.   For all provider contracts, the organization shall be responsible for notifying all providers of the provisions of this section and their responsibilities under this chapter.     Upon receipt by the prepaid limited health service organization of a ninety-day cancellation notice, the prepaid limited health service organization may, if requested by the provider, terminate the contract in less than ninety (90) days if the prepaid limited health service organization is not financially impaired or insolvent.   Provider contracts must provide that the prepaid limited health service organization will provide ninety (90) days' advance written notice to the provider before cancelling, without cause, the contract with the provider, except where a patient's health is subject to imminent danger or a provider's ability to practice is effectively impaired by an action by another governmental agency.   Every contract between a prepaid limited health service organization and a provider of health care services must contain a provision that if any provision of the agreement is held to be unenforceable or otherwise contrary to any applicable laws, regulations, or rules, the provision shall have no effect and shall be severable without affecting the validity or enforceability of the remaining provisions of this agreement.   A contract between a prepaid limited health service organization and a provider of limited health care services may not contain any provision restricting the provider's ability to communicate information to the provider's patient regarding care or treatment options for the patient when the provider deems knowledge of the information by the patient to be in the best interest of the health of the patient.   
  The department may require a prepaid limited health service organization to submit any contract for administrative services, contract with a provider physician, contract for management services, or contract with an affiliated entity to the department if the department has information that the prepaid limited health service organization has entered into a contract that requires it to pay a fee that is unreasonably high in relation to the service provided.   After review of a contract, the department may order the prepaid limited health service organization to cancel the contract if it determines that the fees to be paid by the prepaid limited health service organization under the contract are so unreasonably high as compared with similar contracts entered into by the prepaid limited health service organization in similar circumstances that the contract is detrimental to the subscribers, stockholders, investors, or creditors of the prepaid limited health service organization.   All contracts for administrative services, management services, or provider services or contracts with affiliated entities, entered into or renewed by a prepaid limited health service organization, must contain a provision that the contract will be cancelled upon issuance of an order by the department pursuant to this section.   
 A prepaid limited health service organization that subcontracts with another entity to obtain a network of providers to furnish services to members or enrollees shall guarantee and assure the payment of all contracted amounts agreed to be paid to such providers by that entity or that entity's agent. This section does not preclude the prepaid limited health service organization from seeking reimbursement from the subcontractor for any amounts paid pursuant to this section. Nor does this section prevent the prepaid limited health service organization from asserting any legal defenses to the payment of a provider's claim that were available to the subcontractor. This section shall be effective for all provider claims for services delivered after January 1, 2001.  
 Every prepaid limited health service organization, except the organizations that participate in the TennCare program, shall comply with  56-32-110.  
 The department shall examine the affairs, transactions, accounts, business records, and assets of any prepaid limited health service organization, in the same manner and subject to the same terms and conditions that apply to health maintenance organizations under  56-32-115.  
 Section 56-32-111 shall apply in its entirety to determine what assets, liabilities, and investments are acceptable for a prepaid limited health service organization.  
  Each prepaid limited health service organization must file with the department annually, within three (3) months after the end of its fiscal year, a report on the blank specified for health maintenance organizations by the National Association of Insurance Commissioners, verified by the oath of at least two (2) officers covering the preceding calendar year.   In addition to the information contained in the forms provided under subsection (a), the report must also include:  A statutory financial statement of the organization prepared in accordance with statutory accounting principles, including its balance sheet, income statement, and statement of changes in cash flow for the preceding year, certified by an independent certified public accountant, or a consolidated audited financial statement of its parent company prepared on the basis of statutory accounting principles, certified by an independent certified public accountant, attached to which must be consolidating financial statements of the parent company, including the prepaid limited health service organization;   A list of the names and residence addresses of all persons responsible for the conduct of its affairs, together with a disclosure of the extent and nature of any contracts or arrangements between the persons and the prepaid limited health service organization, including any possible conflicts of interest;   The number of prepaid limited health services contracts, issued and outstanding, and the number of prepaid limited health services contracts terminated;   The number and amount of damage claims for medical injury initiated against the prepaid limited health service organization, and if known, any of the providers engaged by it during the reporting year, broken down into claims with and without formal legal process, and the disposition, if any, of each damage claim for medical injury;   An actuarial report certified by a qualified independent actuary that:  The prepaid limited health service organization is actuarially sound, which certification shall consider the rates, benefits, and expenses of, and any other funds available for, the payment of obligations of the organization;   The rates being charged or to be charged are actuarially adequate to the end of the period for which rates have been guaranteed; and   Incurred but not reported claims and claims reported but not fully paid have been adequately provided for; and     Other information relating to the performance of the prepaid limited health service organization that is reasonably required by the department.     Every prepaid limited health service organization that fails to file an annual report or quarterly report in the form and within the time required by this section shall forfeit up to five hundred dollars ($500) for each day for the first ten (10) days during which the neglect continues and shall forfeit up to one thousand dollars ($1,000) for each day after the first ten (10) days during which the neglect continues; and, upon notice by the department to that effect, the organization's authority to enroll new subscribers or to do business in this state ceases while the default continues. The department may not collect more than fifty thousand dollars ($50,000) for each report.   Each authorized prepaid limited health service organization must file a quarterly report for each calendar quarter within forty-five (45) days after the end of the quarter. The report shall be in the form prescribed by the National Association of Insurance Commissioners for health maintenance organizations and shall contain:  A financial statement prepared in accordance with statutory accounting principles;   A listing of providers; and   Other information relating to the performance of the prepaid limited health service organization that is reasonably required by the department.     The department may require monthly reports if the financial condition of the prepaid limited health service organization has deteriorated from previous periods or if the financial condition of the organization is such that it may be hazardous to subscribers if not monitored more frequently.   Each authorized prepaid limited health service organization shall retain an independent certified public accountant, referred to as CPA, who agrees by written contract with the prepaid limited health service organization to comply with this chapter. The contract must state that:  The CPA will provide to the prepaid limited health service organization audited statutory financial statements consistent with this chapter;   Any determination by the CPA that the prepaid limited health service organization does not meet minimum surplus requirements as set forth in this chapter will be stated by the CPA, in writing, in the audited financial statement; and   The completed work papers and any written communications between the CPA and the prepaid limited health service organization relating to the audit of the prepaid limited health service organization will be made available for review on a visual-inspection-only basis by the department at the offices of the prepaid limited health service organization, at the department, or at any other reasonable place as mutually agreed between the department and the prepaid limited health service organization. The CPA must retain for review the work papers and written communications for a period of not less than six (6) years.     
  With respect to a prepaid limited health services contract, a person may not, unless licensed and appointed as a health insurance agent in accordance with the applicable provisions of the insurance code:  Solicit contracts or procure applications; or   Engage or hold out as engaging in the business of analyzing or abstracting prepaid limited health services contracts or of counseling or advising or giving opinions to persons relative to the contracts other than as a consulting actuary advising a prepaid limited health service organization or as a salaried bona fide full-time employee so counseling and advising the employee's employer relative to coverage for the employer and the employer's employees.     All qualifications, disciplinary provisions, licensing and appointment procedures, fees, and related matters contained in the insurance code that apply to the appointment of health insurance agents by insurers also apply to prepaid limited health service organizations and to persons appointed by prepaid limited health service organizations as their agents.   Examination, licensure, or appointment is not required of any regular salaried officer or employee of a prepaid limited health service organization who devotes substantially all of the regular salaried  officer's or employee's services to activities other than the solicitation of prepaid limited health service organization contracts from the public, and who receives no commission or other compensation directly dependent upon the solicitation of the contracts.   As used in this section, the term salaried refers to basic remuneration and does not include commissions, bonuses, or any other compensatory measures.   
  Except as set forth in subsection (c), each prepaid limited health service organization must at all times maintain a minimum net worth and working capital as required pursuant to  56-32-112.   Except as set forth in subsection (c), the department may not issue a certificate of authority unless the prepaid limited health service organization is in compliance with  56-32-112.   Notwithstanding subsections (a) and (b), the department is authorized to promulgate rules and regulations pursuant to the Uniform Administrative Procedures Act, compiled at title 4, chapter 5 that set forth minimum net worth and working capital requirements for any prepaid limited health service organization that limits the services it offers to services rendered by professionals licensed to practice the healing arts and regulated by a single health related board pursuant to title 63.   
  Except as required in subsection (b), each prepaid limited health service organization must deposit with the department cash or securities of the type eligible under  56-32-111, which must have at all times a market value in the amount set forth in this subsection (a). The amount of the deposit shall be reviewed annually or more often as the department deems necessary. The market value of the deposit must be that which is prescribed in  56-32-112(b).    If securities or assets deposited by a prepaid limited health service organization under this chapter are subject to material fluctuations in market value, the department may in its discretion require the organization to deposit and maintain on deposit additional securities or assets in an amount as may be reasonably necessary to assure that the deposit will at all times have a market value of not less than the amount specified under  56-32-112(b).   If for any reason the market value of assets and securities of a prepaid limited health service organization held on deposit under this chapter falls below the amount required, the organization must promptly deposit other or additional assets or securities eligible for deposit sufficient to cure the deficiency. If the prepaid limited health service organization has failed to cure the deficiency within thirty (30) days after receipt of notice by certified mail from the department, the department may revoke the certificate of authority of the prepaid limited health service organization.   A prepaid limited health service organization may, at its option, deposit assets or securities in an amount exceeding its deposit required or otherwise permitted under this chapter for the purpose of absorbing fluctuations in the value of securities and assets deposited and to facilitate the exchange and substitution of securities and assets. During the solvency of the prepaid limited health service organization, any excess must be released to the organization upon its request. During the insolvency of the prepaid limited health service organization, any excess deposit may be released to the commissioner as receiver, rehabilitator, or liquidator as provided under chapter 9 of this title.     All income from deposits shall be an asset of the organization. A prepaid limited health service organization that has been allowed by the department to make a securities deposit may withdraw that deposit or any part of the deposit after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value as approved by the department.   
  A prepaid limited health service organization must maintain in force a fidelity bond in its own name on its officers and employees, in an amount not less than fifty thousand dollars ($50,000) or in any other amount prescribed by the department. Except as otherwise provided by this subsection (a), the bond must be issued by an insurance company that is licensed to do business in this state.   In lieu of the bond specified in subsection (a), a prepaid limited health service organization may deposit with the department cash or securities or other investments of the types set forth in  56-51-133. The deposit must be maintained in joint custody with the commissioner in the amount and subject to the same conditions required for a bond under this subsection (b).   
  The department may suspend the authority of a prepaid limited health service organization to enroll new subscribers, through its contract with a health maintenance organization or with a federal or state agency, or revoke any certificate issued to a prepaid limited health service organization or order compliance within thirty (30) days, if it finds that any of the following conditions exist:  The organization is not operating in compliance with this chapter;   The plan is no longer actuarially sound or the organization does not have the minimum surplus as required by this chapter;   The organization has advertised, merchandised, or attempted to merchandise its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading, or unfair practices with respect to advertising or merchandising;   The organization is insolvent;   The prepaid limited health service organization is operating significantly in contravention of its basic organizational document or in a manner contrary to that described in and reasonably inferred from any other information submitted pursuant to  56-51-106 and  56-51-107, unless amendments to the submissions have been filed with and approved by the department;   The prepaid limited health service organization is unable to fulfill its obligations to furnish limited health services;   The prepaid limited health service organization has no subscribers twelve (12) months after the issuance of the certificate of authority;   The continued operation of the prepaid limited health service organization would be hazardous to its enrollees; or   The prepaid limited health service organization has filed with the department sworn financial statements that contain material omissions or errors.     If the department has cause to believe that grounds for the suspension or revocation of a certificate of authority exist, it shall notify the prepaid limited health service organization in writing specifically stating the grounds for suspension or revocation and shall pursue a hearing on the matter in accordance with the Uniform Administrative Procedures Act, compiled at title 4, chapter 5.   When the certificate of authority of a prepaid limited health service organization is surrendered or revoked, the organization must proceed, immediately following the effective date of the order of revocation, to wind up its affairs transacted under the certificate of authority. It may not engage in any further advertising, solicitation, or renewal of contracts. The department may, by written order, permit the further operation of the organization as it finds to be in the best interest of enrollees, so that enrollees will be afforded the greatest practical opportunity to obtain continuing limited health services.   The department shall, in its order suspending the authority of a prepaid limited health service organization to enroll new subscribers, specify the period during which the suspension is to be in effect and the conditions, if any, that must be met by the prepaid limited health service organization prior to reinstatement of its authority to enroll new subscribers. The order of suspension is subject to rescission or modification by further order of the department prior to the expiration of the suspension period. Reinstatement may not be made unless requested by the prepaid limited health service organization; however, the department may not grant reinstatement if it finds that the circumstances for which the suspension occurred still exist or are likely to recur.   
 In lieu of suspending or revoking a certificate of authority, or when no penalty is specifically provided, whenever any prepaid limited health service organization or other person, corporation, partnership, or entity subject to this act has been found to have violated any provision of this chapter, the department may:   Issue and cause to be served upon the organization, person, or entity charged with the violation a copy of the findings and an order requiring the organization, person, or entity to cease and desist from engaging in the act or practice that constitutes the violation; and   Impose a monetary penalty of not less than one hundred dollars ($100) for each violation, but not to exceed an aggregate penalty of one hundred thousand dollars ($100,000).   
  In addition to the penalties and other enforcement provisions of this chapter, the department is vested with the power to seek both temporary and permanent injunctive relief when:  A prepaid limited health service organization is being operated by any person or entity without a certificate of authority;   Any person, entity, or prepaid limited health service organization has engaged in any activity prohibited by this chapter or any rule adopted pursuant to this chapter; or   Any prepaid limited health service organization, person, or entity is renewing, issuing, or delivering a prepaid limited health services contract without a certificate of authority.     The department's authority to seek injunctive relief is not conditioned on having conducted any proceeding pursuant to the Uniform Administrative Procedures Act, compiled at title 4, chapter 5.   
 Except as otherwise ordered by the court or as mutually agreed upon by the parties, every judgment or decree entered in any court against any prepaid limited health service organization for the recovery of money must be fully satisfied within sixty (60) days after the entry of the judgment or decree, or, in the case of an appeal from the judgment or decree, within sixty (60) days after the affirmance of the judgment or decree by the appellate court.  
 No judgment creditor or other claimant, other than the department, of a prepaid limited health service organization shall have the right to levy upon any of the assets or securities held in this state as a deposit under  56-51-137.  
  A delinquency proceeding under chapter 9, part 2, 3, or 4 of this title, or supervision by the department pursuant to chapter 9, part 5 of this title constitutes the sole and exclusive means of supervising, liquidating, reorganizing, rehabilitating, or conserving a prepaid limited health service organization.   No prepaid limited health service organization is subject to the laws and regulations governing insurance or health maintenance organization insolvency guaranty funds. No insurance insolvency guaranty fund may provide protection to any individuals entitled to receive limited health services from a prepaid limited health service organization for services related to a prepaid limited health service contract.   
 Every prepaid limited health service organization subject to this chapter must pay to the department the following fees:   For filing an application for a certificate of authority: five hundred dollars ($500);   For filing an amendment to organization documents that require approval: fifty dollars ($50.00);   Each annual report: one hundred dollars ($100); and   For each renewal of certificate of authority each year: one hundred dollars ($100).   
 The department has the power to examine and investigate the affairs of every person, entity, or prepaid limited health service organization in order to determine whether the person, entity, or prepaid limited health service organization is operating in accordance with this chapter, or has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by  56-8-103 and 56-8-104. The department also has the powers enumerated in chapter 8 of this title.  
 For the purposes of defining unfair methods of competition, unfair or deceptive acts or practices,  56-8-104 applies to a prepaid limited health service organization.  
 Any person, entity, or prepaid limited health service organization subject to an order of the department under this chapter may obtain judicial review of the order by filing an appeal from the order, in accordance with the procedures for appeal under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 The provisions of this chapter are cumulative to rights under the general civil and common law, and no action of the department abrogates the rights to damage or other relief in any court.  
  Any information pertaining to the diagnosis, treatment, or health of any enrollee of a prepaid limited health service organization is confidential and exempt from  10-7-503, and shall only be available pursuant to specific written consent of the enrollee, or as otherwise provided by law. With respect to any information pertaining to the diagnosis, treatment, or health of any enrollee or applicant, a prepaid limited health service organization is entitled to claim any statutory privileges against disclosure that the provider who furnished the information to the prepaid limited health service organization is entitled to claim.   Any proprietary financial information contained in contracts entered into with providers by prepaid limited health service organizations is confidential and exempt from  10-7-503.   Any information obtained or produced by the department pursuant to an examination or investigation is confidential and exempt from  10-7-503 until the examination report has been filed and adopted by the commissioner or until the time, if ever, the information is used in litigation by the commissioner or in a contested case. Except for active criminal intelligence or criminal investigative information; personal financial and medical information; information that would defame or cause unwarranted damage to the good name or reputation of an individual; information that would impair the safety and financial soundness of the licensee or affiliated party; proprietary financial information; or information that would reveal the identity of a confidential source, all information obtained by the department pursuant to an examination shall be available after the examination report has been filed.   
 Any acquisition of, control of, merger, or change of control of a prepaid limited health service organization shall be subject to chapter 11 of this title. For purposes of this section, the term control shall have the same meaning as that provided in  56-11-101(b)(3).  
  The premiums, contributions and assessments received by prepaid limited health service organizations are subject to the tax imposed by  56-32-124; provided, however, that the premiums, contributions and assessments received by prepaid limited health service organizations pursuant to subcontracts with entities under contract to the Title XIX single state agency for the provision of health care services are exempt from the tax.   The department shall administer this section pursuant to  56-32-124.   The amount of taxes collected under this section shall be a single credit against the sum total of the taxes imposed by the Franchise Tax Law, compiled in title 67, chapter 4, part 21 and by the Excise Tax Law, compiled in title 67, chapter 4, part 20.   
 The department has authority to adopt rules to effectuate this chapter. The rules shall be adopted in accordance with the rulemaking provisions of the Uniform Administrative Procedures Act, compiled at title 4, chapter 5. The department may also adopt emergency rules as determined to be necessary to effectuate this chapter, in accordance with the Uniform Administrative Procedures Act. No rule shall be adopted without prior hearing and notice as provided under the Uniform Administrative Procedures Act. A violation of any such rule subjects the violator to  56-51-139.  
 Provisions of chapter 32 of this title that are specifically applicable to health maintenance organizations that participate in the TennCare Program under Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program, shall also be applicable to prepaid limited health service organizations that participate in the TennCare program or any successor program.  
 The Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title, shall be applicable to prepaid limited health service organizations to the extent provided for in that act relative to health maintenance organizations.  
  This chapter applies to charitable gift annuities issued by charitable organizations as defined in  56-52-102 and shall be known and may be cited as the Tennessee Charitable Gift Annuity Act of 2008.   The issuance of a charitable gift annuity by a charitable organization authorized under this chapter does not constitute engaging in the business of insurance in this state except to the extent otherwise provided in this chapter.   All annuities, including those issued by charitable organizations, that do not meet the requirements of this chapter shall be subject to regulation as annuities under all applicable chapters of this title, except for private annuities issued by a member of a transferor's immediate family.   
  As used in this chapter, unless the context otherwise requires:  Annuity means a contract or agreement, both with and without a life or mortality element, to make periodic payments, whether in fixed or variable dollar amounts, or both, at specified intervals;    Charitable gift annuity means a transfer of cash, securities, annuities or other property by a donor to a charitable organization in return for an annuity issued by a charitable organization;   Charitable gift annuity does not include a charitable remainder trust or a charitable lead trust or other similar arrangement where the charitable organization does not issue an annuity and incur a financial obligation to guarantee annuity payments. Charitable gift annuity also does not mean any transfer of cash, securities, annuities or other property by a donor to a charitable organization in return for an annuity where a commission is paid to any person as a result of the transfer;     Charitable gift annuity separate account means any segregated account established by a charitable organization to which the organization allocates cash, securities, annuities or other property transferred by a donor to the organization that are to be applied to the terms of a charitable gift annuity issued in connection with the transfer to fund benefits under the charitable gift annuity;   Charitable organization means an entity described by:  Section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C.  501(c)(3)); or   Section 170(c) of the Internal Revenue Code of 1986 (26 U.S.C.  170(c)); and     Commissioner means the commissioner of commerce and insurance.     
  A charitable organization shall not receive any transfer of property, conditioned upon its agreement to pay an annuity to the donor or other annuitant unless and until it has obtained from the commissioner a certificate of authority to issue charitable gift annuities.   A charitable organization shall file with the commissioner its application for a certificate of authority. The application shall be on a form prescribed and furnished by the commissioner and shall be verified by two (2) of the applicant's officers. The application shall include or be accompanied by such proof as the commissioner may reasonably require that the applicant is qualified under this chapter. At filing of the application the applicant shall pay to the commissioner the applicable filing fees as specified in  56-4-101(1).   If after such investigation or examination as the commissioner deems advisable, the commissioner finds that the applicant is in sound financial condition and is otherwise qualified, the commissioner shall issue to the applicant a certificate of authority. If the commissioner does not so find, the commissioner shall deny issuance of the certificate of authority and notify the applicant in writing stating the reasons.   The certificate of authority of a charitable organization issued under this chapter shall continue until suspended or revoked by the commissioner or terminated by the organization, subject to continuance each year by payment on or before March 1 of the continuance fee of one hundred dollars ($100) and filing of the annual report required under  56-52-106.   A person acting on behalf of a charitable organization to solicit the transfers of property in exchange for annuity payments as authorized under this chapter shall not be required to be licensed.   The commissioner shall be authorized to exempt from this section any charitable organizations or classes of organizations that the commissioner finds inappropriate to include to effectuate the purposes of this chapter.   
  A charitable organization authorized by this chapter shall maintain one (1) or more charitable gift annuity separate accounts for its charitable gift annuities. The assets allocated to any such separate account shall not be used to satisfy any debts of the charitable organization other than those incurred pursuant to the issuance of charitable gift annuities to which the account applies. The assets of the separate account shall at least equal either:  The total amount of donations for outstanding charitable gift annuities to which the account applies, measured at the time of each annuity donation, later reduced by payments under the annuity and taking into account investment gains and losses; or   One hundred ten percent (110%) of the reserves, calculated in a manner consistent with subsection (b) for charitable gift annuities to which the separate account applies.      Reserves on the outstanding charitable gift annuities shall not be less than reserves calculated using:  The commissioner's annuity reserve valuation method as defined in the charitable organization's domestic state standard valuation law;   Any mortality table permitted under the charitable organization's domestic state standard valuation law to be used in determining the minimum standard for the valuation of individual annuities issued during the same calendar year as the charitable gift annuity; and   The maximum interest rate permitted under the charitable organization's domestic state standard valuation law to be used in determining the minimum standard for the valuation of individual annuities issued during the same calendar year as the charitable gift annuity; or     One hundred ten percent (110%) of reserves determined by using the Annuity 2000 Mortality Table and an interest assumption of five percent (5%), or such other mortality table and interest assumption as may be prescribed from time to time by the commissioner.     Any portion of the charitable gift annuity risk that is insured or reinsured by the charitable organization with an authorized insurer or reinsurer shall be exempt from subsection (a). For this purpose, any annuity contract purchased from an authorized insurer or reinsurer by the charitable organization is considered to be annuity risk reinsured.   The general assets of the charitable organization shall be liable for charitable gift annuity agreements to the extent that assets allocated to the charitable gift annuity separate accounts are inadequate.   A charitable organization may, but is not required to, maintain a charitable gift annuity separate account solely applicable to its charitable gift annuities issued to Tennessee annuitants. Any charitable gift annuity separate account maintained pursuant to this subsection (e) shall be subject to the requirements of subsection (a).   
 The segregated assets held in the charitable gift annuity separate account shall be invested in accordance with the prudent investor standard as set forth in the Tennessee Uniform Prudent Investor Act of 2002, compiled in title 35, chapter 14.  
  A charitable organization authorized under this chapter shall annually file a report verified by at least two (2) principal officers with the commissioner covering the preceding fiscal year. The report is due ninety (90) days after the close of the charity's fiscal year or at a later date approved by the commissioner. Alternatively, in lieu of a verified report, a charitable organization may submit an audited report within one hundred fifty (150) days after the close of the charity's fiscal year or at a later date approved by the commissioner.   The report shall be in a form prescribed by the commissioner and shall include:  A financial statement of the organization, including its balance sheet and receipts and disbursements for the preceding year;   Any material changes in the information;   The number of gift annuity contracts issued during the year, the number of gift annuity contracts as of the end of the year and the number of gift annuity contracts that terminated during the year;   The amount of annuity payments made during the year and the amounts transferred from the charitable gift annuity separate account to the general account during the year; and   Other information relating to the performance of the charitable gift annuities and charitable gift annuity separate account of the charitable organization necessary to enable the commissioner to:  Issue certificates of authority;   Ascertain maintenance of records;   Evaluate solvency;   Respond to consumer complaints; and   Conduct hearings to determine compliance with this chapter.       A copy of a report, containing the information required under subsection (b), that has been filed in the state of domicile of the charitable organization, or in any other state in which the charitable organization must file a report containing substantially the same information required by this chapter will be deemed to satisfy the requirements of this section. The commissioner shall have the authority to request additional information.   
 Whenever the commissioner determines it to be proper or expedient, the commissioner may make or cause to be made an examination of the assets and liabilities and other affairs of the charitable organization as they pertain to charitable gift annuity agreements entered into pursuant to this chapter. In determining a charitable organization's ability to pay its obligations under charitable gift annuities, the commissioner may limit the examinations to the charitable gift annuity separate account, unless the commissioner determines that the assets in the charitable gift annuity account are not adequate for that purpose. The authority of the commissioner under this section shall be the same as that bestowed upon the commissioner under  56-1-411 and 56-8-107. The commissioner shall keep the information obtained in the course of examinations confidential until the examination is completed. The reasonable expenses incurred for an examination shall be paid by the charitable organization.  
  No form of a charitable gift annuity shall be issued in this state without the approval of the commissioner. The commissioner shall, within thirty (30) days of the filing of a charitable gift annuity, approve or disapprove the proposed agreement forms and shall notify the charitable organization as soon as practicable. If the commissioner does not disapprove the proposed agreement forms within the thirty-day period, the forms shall be deemed approved.   Each annuity agreement form shall include the following information:  The value of the property to be transferred;   The amount of the annuity to be paid to the donor or other annuitant;   The manner in which and the intervals at which payment is to be made;   The age and sex of the person or persons during whose life payment is to be made;   The reasonable value as of the date of the agreement of the benefits created as calculated using methodology approved by the internal revenue service; and   The date the payments are to begin.     
  Within a reasonable amount of time after accepting the property transferred in exchange for the annuity agreement, the organization shall obtain a signed statement from a donor acknowledging the following terms of the agreement:  The expected value of the property to be transferred;   The amount of the annuity to be paid to the donor or other annuitant;   The manner in which and the intervals at which payment is to be made;   The age of the person or persons during whose life payment is to be made;   The reasonable value as of the date of the agreement of the benefits created; and   The date the payments are to begin.     In addition to the disclosure in subsection (a), the charitable organization shall obtain a signed statement from a donor acknowledging that the donor has been informed that payments made under a charitable gift annuity are backed solely by the full faith and credit of the organization, are not insured or guaranteed by an insurance company, are not protected by any insurance guaranty association and are not backed in any way by the state of Tennessee.   The requirements of subsections (a) and (b) may be satisfied by an acknowledgement that is a part of the annuity agreement that is signed by the donor.   A donor may revoke any donation under this chapter prior to signing the written acknowledgement required in subsections (a) and (b).   
  Chapter 8 of this title shall apply to charitable gift annuities issued under this chapter.   Except as otherwise provided in this chapter, this title, including, but not limited to, Chapters 3 9, and 12, shall not apply to charitable gift annuities issued under this chapter.   
 The commissioner may, after notice and hearing, promulgate reasonable rules, regulations and orders as are necessary or proper to carry out and effectuate this chapter, including, but not limited to, the standards for determining financial soundness and other qualifications of a charitable organization wishing to issue charitable gift annuities in this state. The regulations shall be subject to review in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 As used in this chapter, unless the context otherwise requires:   Actual malice means knowledge that information is false, or reckless disregard of whether it is false;   Conceal means to take affirmative action to prevent others from discovering information. Mere failure to disclose information does not constitute concealment. Action by the holder of a legal privilege, or one who has a reasonable belief that a privilege exists, to prevent discovery of privileged information, does not constitute concealment;   Insurance policy means the written instrument in which are set forth the terms of any certificate of insurance, binder of coverage or contract of insurance, including a certificate, binder or contract issued by a state-assigned risk plan, benefit plan, nonprofit hospital service plan, health maintenance organization, motor club service plan, or surety bond, cash bond or any other alternative to insurance authorized by a state's financial responsibility act. Insurance policy also means any other instruments authorized or regulated by the department of commerce and insurance;   Insurance professional means sales agents, managing general agents, brokers, producers, adjusters and third-party administrators;   Insurance transaction means a transaction by, between or among:  An insurer or a person who acts on behalf of an insurer; and   An insured, claimant, applicant for insurance, public adjuster, insurance professional, practitioner, or any person who acts on behalf of an insured, claimant, applicant for insurance, public adjuster, insurance professional, or practitioner;for the purpose of obtaining insurance or reinsurance, calculating insurance premiums, submitting a claim, negotiating or adjusting a claim, or otherwise obtaining insurance, self-insurance, or reinsurance or obtaining the benefits of insurance, self-insurance, or reinsurance or from insurance, self-insurance, or reinsurance;     Insurer means any person purporting to engage in the business of insurance or authorized to do business in this state or subject to regulation by the state, who undertakes to indemnify another against loss, damage or liability arising from a contingent or unknown event. Insurer includes, but is not limited to, an insurance company, self-insurer, reinsurer, reciprocal exchange, interinsurer, risk retention group, Lloyd's insurer, fraternal benefit society, surety, medical service, health maintenance organization, dental, optometric or any other similar health service plan, and any other legal entity engaged or purportedly engaged in the business of insurance, including any person or entity that falls within the definition of insurer found within this title;   Pattern or practice means repeated, routine or generalized in nature, and not merely isolated or sporadic;   Person means a natural person, company, corporation, unincorporated association, partnership, professional corporation, agency of government and any other entity;   Practitioner means a licensee of this state authorized to practice medicine and surgery, psychology, chiropractic or law or any other licensee of the state or person required to be licensed in the state whose services are compensated either in whole or in part, directly or indirectly, by insurance proceeds, including, but not limited to, automotive repair shops, building contractors and insurance adjusters, or a licensee similarly licensed in other states and nations or the licensed practitioner of any nonmedical treatment rendered in accordance with a recognized religious method of healing;   Premium means consideration paid or payable for coverage under an insurance policy. Premium includes any payments, whether due within the insurance policy term or otherwise, and deductible payments, whether advanced by the insurer or insurance professional and subject to reimbursement by the insured or otherwise, any self-insured retention or payments, whether advanced by the insurer or insurance professional and subject to reimbursement by the insured or otherwise, and any collateral or security to be provided to collateralize obligations to pay any of the above;   Premium finance company means a person engaged or purporting to engage in the business of advancing money, directly or indirectly, to an insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, including but not limited to loan contracts, notes, agreements or obligations, wherein the insured has assigned the unearned premiums, accrued dividends, or loss payments as security for the advancement in payment of premiums on insurance policies only, and does not include the financing of insurance premiums purchased in connection with the financing of goods and services;   Premium finance transaction means a transaction by, between or among an insured, a producer or other party claiming to act on behalf of an insured and a third-party premium finance company, for the purposes of purportedly or actually advancing money directly or indirectly to an insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, wherein the insured has assigned the unearned premiums, accrued dividends or loan payments as security for the advancement in payment of premiums on insurance policies only, and does not include the financing of insurance premiums purchased in connection with the financing of goods and services;   Reckless means without reasonable belief of the truth, or, for the purposes of  56-53-103(a)(3), with a high degree of awareness of probable insolvency; and   Withhold means to fail to disclose facts or information that any law, other than this chapter, requires to be disclosed. Mere failure to disclose information does not constitute withholding if the one failing to disclose reasonably believes that there is no duty to disclose.   
  Any person who, knowingly and with intent to defraud, and for the purpose of depriving another of property or for pecuniary gain, commits, participates in or aids, abets, or conspires to commit or solicits another person to commit, or intentionally permits its employees or its agents to commit any of the following acts, has committed a fraudulent insurance act:  Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, claimant or applicant to an insurer, insurance professional or premium finance company in connection with an insurance transaction or premium finance transaction, any information that contains false representations as to any material fact, or that withholds or conceals a material fact concerning any of the following:  The application for, rating of, or renewal of, any insurance policy;   A claim for payment or benefit pursuant to any insurance policy;   Payments made in accordance with the terms of any insurance policy; or   The application used in any premium finance transaction;     Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, insurance professional or a premium finance company in connection with an insurance transaction or premium finance transaction, any information that contains false representations as to any material fact, or that withholds or conceals a material fact, concerning any of the following:  The solicitation for sale of any insurance policy or purported insurance policy;   An application for certificate of authority;   The financial condition of any insurer; or   The acquisition, formation, merger, affiliation or dissolution of any insurer;     Solicits or accepts new or renewal insurance risks by or for an insolvent insurer;   Removes the assets or records of assets, transactions and affairs or a material part of the assets or records, from the home office or other place of business of the insurer, or from the place of safekeeping of the insurer, or destroys or sequesters the same from the department; or   Diverts, misappropriates, converts or embezzles funds of an insurer, an insured, claimant or applicant for insurance in connection with:  An insurance transaction;   The conduct of business activities by an insurer or insurance professional; or   The acquisition, formation, merger, affiliation or dissolution of any insurer.       It shall be unlawful for any person to commit, or to attempt to commit, or aid, assist, abet or solicit another to commit, or to conspire to commit a fraudulent insurance act.   
  Any person who commits, participates in, or aids, abets, or conspires to commit, or solicits another person to commit, or permits its employees or its agents to commit any of the following acts with an intent to induce reliance, has committed an unlawful insurance act:  Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, claimant or applicant to an insurer, insurance professional or a premium finance company in connection with an insurance transaction or premium finance transaction, any information that the person knows to contain false representations, or representations the falsity of which the person has recklessly disregarded, as to any material fact, or that withholds or conceals a material fact, concerning any of the following:  The application for, rating of, or renewal of, any insurance policy;   A claim for payment or benefit pursuant to any insurance policy;   Payments made in accordance with the terms of any insurance policy; or   The application for the financing of any insurance premium;     Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, insurance professional or a premium finance company in connection with an insurance transaction or premium finance transaction, any information that the person knows to contain false representations, or representations the falsity of which the person has recklessly disregarded, as to any material fact, or that withholds or conceals a material fact, concerning any of the following:  The solicitation for sale of any insurance policy or purported insurance policy;   An application for certificate of authority;   The financial condition of any insurer; or   The acquisition, formation, merger, affiliation or dissolution of any insurer; or     Solicits or accepts new or renewal insurance risks by or for an insurer that the person knows was insolvent or the insolvency of which the person recklessly disregards.     It shall be unlawful for any person to commit, or to attempt to commit, or aid, assist, abet or solicit another to commit, or to conspire to commit an unlawful insurance act.   
 A person who violates  56-53-102 shall be punished and subject to the penalties under  39-14-133.  
  A person convicted of a violation of  56-53-102 shall be ordered to make monetary restitution for any financial loss or damages sustained by any other person as a result of the violation. Financial loss or damage shall include, but is not necessarily limited to, loss of earnings, out-of-pocket and other expenses, paid deductible amounts under an insurance policy, insurer claim payments, cost reasonably attributed to investigations and recovery efforts by owners, insurers, insurance professionals, law enforcement and other public authorities, and cost of prosecution.   When restitution is ordered, the court shall determine its extent and methods. Restitution may be imposed in addition to a fine and, if ordered, any other penalty, but not in lieu thereof. The court shall determine whether restitution, if ordered, shall be paid in a single payment or installments and shall fix a period of time, not in excess of three (3) years, within which payment of restitution is to be made in full.   
   Any practitioner determined by the court to have violated  56-53-102 shall be deemed to have committed an act involving moral turpitude that is inimical to the public well being. The court or prosecutor shall notify the appropriate licensing authority in this state of the judgment for appropriate disciplinary action, including revocation of the professional license, and may notify appropriate licensing authorities in any other jurisdictions where the practitioner is licensed. Any victim may notify the appropriate licensing authorities in this state and any other jurisdiction where the practitioner is licensed, of the conviction.   Upon notification of a conviction of the crimes enumerated in  56-53-102 or a substantially similar crime under the laws of another state or the United States, this state's appropriate licensing authority may hold an administrative hearing, or take other appropriate administrative action authorized by state law, to consider the imposition of the administrative sanctions as provided by law against the practitioner. Where the practitioner has been convicted of a felony violation of  56-53-102 or a substantially similar crime under the laws of another state or of the United States, this state's appropriate licensing authority may hold an administrative hearing, or take other appropriate administrative action authorized by state law, and may summarily and permanently revoke the license or take other action against the licensee as deemed appropriate. It is recommended by the legislature that the supreme court shall summarily and permanently disbar any attorney found guilty of such felony.   The referrals to the appropriate licensing or other agencies, and all dispositive actions of the referral, shall be a matter of public record.      A person convicted of a felony involving dishonesty or breach of trust shall not participate in the business of insurance unless a waiver is granted by the commissioner.   A person in the business of insurance shall not knowingly or intentionally permit a person convicted of a felony involving dishonesty or breach of trust to participate in the business of insurance unless a waiver has been granted by the commissioner pursuant to subdivision (b)(1).     
   Any person injured in the person's business or property by reason of a violation of  56-53-103 may recover for the injury from the person or persons violating  56-53-103, in any appropriate court having jurisdiction, the following:  Return of any profit, benefit, compensation or payment received by the person violating  56-53-103 directly resulting from the violation; and   Reasonable attorneys' fees, related legal expenses, including internal legal expenses and court costs.     An action maintained under subdivision (a)(1) may neither be certified as a class action nor be made part of a class action.      Any person injured in the person's business or property by reason of a violation of  56-53-102 may recover for the injury from the person or persons violating  56-53-102, in any appropriate court having jurisdiction, the following:  Return of any profit, benefit, compensation or payment received by the person violating  56-53-102 directly resulting from the violation;   Reasonable attorneys' fees, related legal expenses, including internal legal expenses and court costs;   All other economic damages directly resulting from the violation of  56-53-102;   Reasonable investigative fees based on a reasonable estimate of the time and expense incurred in the investigation of the violation or violations of  56-53-102 proved at trial; and   A penalty of no less than one hundred dollars ($100) and no greater than ten thousand dollars ($10,000).     An action maintained under subdivision (b)(1) may neither be certified as a class action nor be made part of a class action.     Any person injured in the person's business or property by a person violating  56-53-102, upon a showing of clear and convincing evidence that the violation was part of a pattern or practice of such violations, shall be entitled to recover threefold the injured person's economic damages. An action for treble damages must be brought within three (3) years of the violation. One third (1/3) of the treble damages awarded shall be payable to the state to be used solely for the purpose of investigation and prosecution of violations of this chapter or other fraudulent behavior relating to insurance transactions, or for public education relating to insurance fraud. An action maintained under this subsection (c) may neither be certified as class action nor be made part of a class action, unless the violations of  56-53-102 giving rise to the action resulted in criminal conviction of the violator or violators under  56-53-104.    The attorney general and reporter, district attorney general or other prosecutorial agency shall have authority to maintain civil proceedings on behalf of the department of commerce and insurance and any victims of violations of  56-53-102. In the action, the court shall proceed as soon as practicable to the hearing and determination of the hearing. Pending final determination, the court may at any time enter restraining orders or prohibitions, or take other actions, including the acceptance of satisfactory performance bonds, as it deems proper.  The circuit and chancery courts of the state shall have jurisdiction to prevent and restrain violations of  56-53-102 by issuing appropriate orders.   In any action commenced under this subsection (d), the court, upon finding that any person has violated  56-53-102, shall levy a fine of up to five thousand dollars ($5,000) for each violation.     Any court in which a prosecution for violation of  56-53-102 is pending shall have authority to stay or limit proceedings in any civil action regarding the same or related conduct. Any court in which is pending a civil action brought pursuant to this subsection (d) may stay or limit proceedings in actions brought pursuant to subsections (a)-(c) regarding the same or related conduct or may transfer the actions or consolidate them before itself or allow the plaintiffs in the actions to participate in the action brought pursuant to this subsection (d), as it shall prescribe.     Any cause of action under this section for violation of  56-53-102 or  56-53-103 must be brought within five (5) years of the commission of the acts constituting the violation, or within five (5) years of the time the plaintiff discovered, or with reasonable diligence could have discovered, the acts, whichever is later.   An insurer shall not pay damages awarded under this section, or provide a defense or money for a defense, on behalf of an insured under a contract of insurance or indemnification. A third party who has asserted a claim against an insured shall have no cause of action under this section against the insurer of the insured arising out of the insurer's processing or settlement of the third party's claim. An obligee under a surety bond shall not have a cause of action under this section against the surety arising out of the surety's processing or settlement of the obligee's claim against the bond.   Any person injured in the person's business or property by reason of a violation of  56-53-102 or  56-53-103 may recover under only one (1) of the subsections of this section.   
 The remedies expressly provided in  56-53-107 shall be the only private remedies for violations of this chapter and no additional remedies shall be implied. The remedies available under  56-53-107 shall not be used in conjunction with or in addition to any other remedies available at law or in equity to duplicate recovery for the same element of economic damage. Further, in any civil action pleading both exemplary damages and the treble damages available in  56-53-107(c), the plaintiff shall elect one (1) or the other remedy, but not both, at the conclusion of the evidentiary phase of the trial; provided, that nothing in this chapter shall limit or abrogate any right of action that would have existed in the absence of this chapter, but no action based on such a right shall rely on this chapter to establish a standard of conduct or for any other purpose.  
  When any law enforcement official or authority, any insurance department, state division of insurance fraud, or state or federal regulatory or licensing authority requests information from an insurer or insurance professional for the purpose of detecting, prosecuting or preventing insurance fraud, the insurer or insurance professional shall take all reasonable actions to provide the information requested, subject to any legal privilege protecting the information.   Any insurer or insurance professional who has reasonable belief that an act violating  56-53-102 or  56-53-103 will be, is being, or has been committed shall furnish and disclose any information in the insurance professional's possession concerning the act to the appropriate law enforcement official or authority, insurance department, state division of insurance fraud, or state or federal regulatory or licensing authority, subject to any legal privilege protecting the information. In no case shall the information be required by subpoena or otherwise to be given to the person alleged to have committed a violation, unless in possession of an insurer and that insurer used the information to deny a claim of the person, in whole or in part.   All documents or other information submitted to or generated by a law enforcement, regulatory, licensing or other governmental agency pursuant to subsection (a) or (b) shall not be subject to disclosure pursuant to the public records laws, codified in title 10, chapter 7, and shall be confidential unless disclosed by the law enforcement, regulatory, licensing or other governmental agency at the agency's sole discretion.   Any person who has a reasonable belief that an act violating this chapter will be, is being, or has been committed, or any person who collects, reviews or analyzes information concerning insurance fraud may furnish and disclose any information in the person's possession concerning the act to an authorized representative of an insurer who requests the information for the purpose of detecting, prosecuting or preventing insurance fraud.   Failure to cooperate with a request for information from an appropriate local, state or federal governmental authority shall bar a person's eligibility for restitution from any proceeds resulting from the governmental investigation and prosecution. This subsection (e) shall not be construed as limiting the ability of any governmental authority from imposing lawful civil discipline upon a person or entity that fails to cooperate with a request for information as delineated in this subsection (e).   
 In the absence of actual malice, no person furnishing, disclosing or requesting information pursuant to  56-53-109 shall be subject to civil liability for libel, slander, or any other cause of action arising from the furnishing, disclosing or requesting of the information. No person providing information pursuant to  56-53-109(a) shall be subject to civil liability for any cause of action arising from the person's provision of requested information. Any person against whom any action is brought who is found to be immune from liability under this section, shall be entitled to recover reasonable attorneys' fees and costs from the person or party who brought the action. This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person.  
  Anti-Fraud Plans.  By January 1, 2002, every insurer with direct written premiums exceeding ten million dollars ($10,000,000) shall prepare, implement, and maintain an insurance anti-fraud plan. Each insurer's anti-fraud plan shall outline specific procedures, appropriate to the type of insurance the insurer writes in this state, to:  Prevent, detect and investigate all forms of insurance fraud, including fraud involving the insurer's employees or agents; fraud resulting from misrepresentations in the application, renewal or rating of insurance policies; claims fraud; and security of the insurer's data processing systems;   Educate appropriate employees on fraud detection and the insurer's anti-fraud plan;   Provide for the hiring of or contracting for fraud investigators;   Report insurance fraud to appropriate law enforcement and regulatory authorities in the investigation and prosecution of insurance fraud; and   Pursue restitution for financial loss caused by insurance fraud, where appropriate.     The commissioner may review each insurer's anti-fraud plan at the time of the insurance company's financial examination or market conduct examination or at any other time when requested by the commissioner.   The commissioner may require each insurer to file a summary of the insurer's anti-fraud activities and results. The anti-fraud plans and the summary of the insurer's anti-fraud activities and results are not public records and are exempt from the public records act, and shall be proprietary and not subject to public examination, and shall not be discoverable or admissible in civil litigation.   This subsection (a) confers no private rights of action.     Fraud Warnings.   By January 1, 2002, all applications for insurance, and all claim forms regardless of the form of transmission provided and required by an insurer or required by law as a condition of payment of a claim, shall contain a statement, permanently affixed to the application or claim form, that clearly states in substance the following, or words to that effect:  It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties include imprisonment, fines and denial of insurance benefits.    The lack of a statement required in this subsection (b) does not constitute a defense in any criminal prosecution under  56-53-102 nor in any civil action under  56-53-102 or  56-53-103.     The warning required by subdivision (b)(1) shall not be required on forms relating to reinsurance.     Enforcement.  Notwithstanding any other law, the following are the exclusive monetary penalties for violation of this section. Insurers that fail to prepare, implement, and maintain an insurance anti-fraud plan are subject to a penalty of five hundred dollars ($500) per day, not to exceed twenty-five thousand dollars ($25,000).   
 Nothing in this chapter shall apply to a workers' compensation insurance policy as defined in  56-47-102, and the Workers' Compensation Fraud Act, compiled in chapter 47 of this title, shall continue in full force and effect.  
 This chapter shall be known and may be cited as the Tennessee Health Care Liability  Reporting Act.  
 This chapter is intended to ensure the availability of health care liability claims data necessary for thorough analysis and understanding of issues associated with health care liability claims, in order to support the establishment and maintenance of sound public policy. The information submitted to the department of commerce and insurance pursuant to this section shall be used solely for the purpose of analyzing trends in health care liability claims; provided, however, that the information received pursuant to  56-54-105 that pertains to judgments and settlements paid as to any medical physician, osteopathic physician or dentist shall be sent to the department of health, division of health related boards and  56-54-107 shall apply to the reports.  
 As used in this chapter, unless the context otherwise requires:   Claim means:  A demand for monetary damages for injury or death caused by health care liability; or   A voluntary indemnity payment for injury or death caused by health care liability;     Claimant means a person, including a decedent's estate, that is seeking or has sought monetary damages for injury or death caused by health care liability;   Closed claim means a claim that has been settled or otherwise disposed of by the insuring entity, self-insurer, facility or provider. A claim may be closed with or without an indemnity payment to a claimant;   Commissioner means the commissioner of commerce and insurance;   Companion claims means separate claims involving the same incident of health care liability made against other providers or facilities;   Economic damages means objectively verifiable monetary losses, including medical expenses, loss of earnings, burial costs, loss of use of property, cost of replacement or repair, cost of obtaining substitute domestic services, and loss of business or employment opportunities;   Health care facility or facility means an entity licensed under title 68, including a clinic, diagnostic center, hospital, laboratory, mental health center, nursing home, office, surgical facility, treatment facility, or similar place where a health care provider provides health care to patients;   Health care liability means an actual or alleged negligent act, error, or omission in providing or failing to provide health care services;   Health care provider or provider means:  A person licensed in either title 63, except chapter 12, or title 68 to provide health care or related services, including, but not limited to, an acupuncturist, a physician, a surgeon, an osteopathic physician, a dentist, a nurse, an optometrist, a podiatrist, a chiropractor, a physical therapist, a psychologist, a pharmacist, an optician, a physician assistant, a certified professional midwife, an orthopedic physician assistant, or a nurse practitioner. If the person is deceased, this includes the person's estate or personal representative; or   An employee or agent of a person described in subdivision (9)(A), acting in the course and scope of the employee's or agents employment. If the employee or agent is deceased, this includes the employees or agents estate or personal representative;     Insuring entity means:  An authorized insurer;   A captive insurer;   A joint underwriting association;   A patient compensation fund;   A risk retention group; or   An unauthorized insurer that provides surplus lines coverage;     Noneconomic damages means subjective, nonmonetary losses, including pain, suffering, inconvenience, mental anguish, disability, or disfigurement incurred by the injured party, emotional distress, loss of society and companionship, loss of consortium, humiliation and injury to reputation, and destruction of the parent-child relationship; and   Self-insurer means any health care provider, facility, or other individual or entity that assumes operational or financial risk for claims of health care liability.   
 This chapter shall apply to all health care liability claims in this state, regardless of whether or how they are covered by medical professional liability insurance. This chapter shall not apply to the state or those employed by the state to the extent that their health care liability is not covered by an insurance entity.  
  For claims closed or open and pending on or after January 1, 2008:  Every insuring entity or self-insurer that provides health care liability insurance to any facility or provider in this state must report each health care liability claim to the commissioner;   A claim that is covered under a primary policy and one (1) or more excess policies shall be reported only by the insuring entity that issued the primary policy. The insuring entity that issued the primary policy shall report the total amount, if any, paid with respect to the claim, including any amount paid under an excess policy, any amount paid by the facility or provider, and any amount paid by any other person on behalf of the facility or provider;   If a claim is not covered by an insuring entity or self-insurer, the facility or provider named in the claim must report it to the commissioner after a final claim disposition has occurred due to a court proceeding or a settlement by the parties. Instances in which a claim may not be covered by an insuring entity or self-insurer include situations in which:  The facility or provider did not buy insurance or maintained a self-insured retention that was larger than the final judgment or settlement;   The claim was denied by an insuring entity or self-insurer because it did not fall within the scope of the insurance coverage agreement; or   The annual aggregate coverage limits had been exhausted by other claim payments.        Any self-insurer, risk retention group, or unauthorized insurer that may be exempt from this chapter due to a federal preemption or other cause, may report all data required under this section.   The self-insurer, risk retention group, or unauthorized insurer must notify covered providers and facilities that they may have reporting responsibilities under this chapter if the self-insurer, risk retention group or unauthorized insurer does not report due to a federal exemption or other jurisdictional preemption.   If any self-insurer, risk retention group or unauthorized insurer does not report information required by this chapter due to the assertion of a federal exemption or other jurisdictional preemption, the facility or provider named in a health care liability claim shall report all data required by this chapter once notified by the self-insurer, risk retention group or unauthorized insurer that such entity is not reporting under this section.      Counsel for claimants asserting claims covered by this section shall provide:  Information about fee arrangements to the commissioner. The information shall include the portion of any settlement or judgment received by claimant's counsel; and   Information as to whether the healthcare provider named in the claim received payment from TennCare for the incident that is the subject of the claim.     For the purposes of the levying of civil penalties under  56-54-109, counsel for claimants who are required to submit the information outlined in this subsection (c) shall be considered reporting entities under this section.   The information provided pursuant to subdivision (c)(1)(B) shall be provided for claims closed or open and pending on or after January 1, 2012.     Beginning in 2009, reports required under subsections (a) and (c) must be filed by March 1. These reports must include data for all claims open and pending as of the last day of the preceding calendar year, and those claims closed in the preceding calendar year and any adjustments to data reported in prior years.   The commissioner may adopt rules that require insuring entities, self-insurers, facilities, providers and claimant's counsel to submit all required claim data electronically.   
 With the exception of reports received pursuant to  56-54-105(c), reports required under  56-54-105 must contain the following information in a format and coding protocol prescribed by the commissioner; however, for all open claims, an insuring entity, self-insurer, facility and provider shall only be required to report the information in its possession as of the date of the report. To the greatest extent possible while still fulfilling the purposes of this chapter, the format and coding protocol shall be consistent with the format and coding protocol for data reported to the National Practitioner Data Bank.   Claim and incident identifiers, including:  A claim identifier assigned to the claim by the insuring entity, self-insurer, facility or provider; and   An incident identifier if companion claims have been made by a claimant;     The policy limits of the medical professional liability insurance policy covering the claim; however, no information concerning policy limits shall be included in the report prepared pursuant to  56-54-111;   If applicable, the medical specialty of the provider named in the claim;   The type of health care facility where the health care liability incident occurred;   The primary location within a facility where the health care liability incident occurred;   The geographic location, by city and county, where the health care liability incident occurred;   The injured person's sex and age on the incident date;   The severity of the health care liability injury using the National Practitioner Data Bank severity scale;   The dates of:  The incident that was the proximate cause of the claim;   Notice to the insuring entity, self-insurer, facility or provider;   Suit, if a suit was filed;   Final indemnity payment, if any; and   Final action by the insuring entity, self-insurer, facility or provider to close the claim;     Settlement information that identifies the timing and final method of claim disposition, including:  Claims settled by the parties;   Claims disposed of by a court, including the date disposed;   Claims disposed of by alternative dispute resolution, such as arbitration, mediation, private trial and other common dispute resolution methods; and   Whether the settlement occurred before or after trial, if a trial occurred;     Specific information about the indemnity payments and defense and cost containment expenses, including:  For claims disposed of by a court that result in a verdict or judgment that itemizes damages:   The total verdict or judgment;   If there is more than one (1) defendant, the total indemnity paid by or on behalf of this facility or provider;   Economic damages;   Noneconomic damages;   Punitive damages, if applicable; and   Defense and cost containment expenses, including court costs, attorneys' fees, and costs of expert witnesses; and     For claims that do not result in a verdict or judgment that itemizes damages:   The total amount of the settlement;   If there is more than one (1) defendant, the total indemnity paid by or on behalf of this facility or provider;   The insuring entity's or self-insurer's best estimate of economic damages included in the settlement;   The insuring entity's or self-insurer's best estimate of noneconomic damages included in the settlement; and   Defense and cost containment expenses, including court costs, attorneys' fees, and costs of expert witnesses;       The reason for the health care liability claim. The reporting entity must use the same allegation group and specific allegation codes that are used for mandatory reporting to the National Practitioner Data Bank; and   Any other open or closed claim data the commissioner determines to be necessary to accomplish the purpose of this chapter and requires by adopting a rule. The commissioner is also authorized by rule to determine certain open or closed claim data not necessary for submission to the commissioner.   
  The information submitted to the department of commerce and insurance pursuant to this chapter shall be confidential, shall not be subject to public inspection, shall not be subject to discovery, subpoena or legal compulsion for release to any person or entity and shall not be admissible in any criminal, civil or administrative proceeding.   Nothing in this chapter shall be construed to prevent parties to a liability claim or legal action from entering into a settlement of that claim on a confidential basis. Any such agreement shall be mutually binding on all parties by the terms of the agreement, with the exception that any party required to report under this section shall do so and such reporting shall not be considered a breach of any confidential settlement agreement.   The commissioner may share information received pursuant to this chapter with the National Association of Insurance Commissioners, other state insurance departments or other appropriate government entities; however, the commissioner shall not share any data related to an open or pending claim to any other jurisdiction and such shared data shall not include the license number or any other personal identification of any health care provider.   
 Any cost incurred by the department of commerce and insurance associated with the implementation of this chapter shall be paid out of existing reserves of the insurance division of the department of commerce and insurance.  
  The commissioner may assess a civil penalty in the amount of one hundred dollars ($100) per day upon any insuring entity, self-insurer, facility, provider and claimant's counsel that fails to file a complete filing by the required date, or otherwise fails to comply with this chapter. Any insuring entity, self-insurer, facility, provider and claimant's counsel so assessed may request an administrative hearing to contest the assessment of a penalty under this section. The prevailing party shall be entitled to its costs in bringing or defending the action.   All hearings under this section shall be conducted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
 The commissioner shall adopt any rules needed for implementing this chapter in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 The commissioner shall submit an annual report to the speaker of the senate and the speaker of the house of representatives summarizing the information submitted pursuant to this chapter. The annual report shall be submitted on or before November 1 of each year. Any report shall contain aggregate data only and shall not identify any individual health care facility or health care provider. The annual report compiled by the commissioner shall aggregate total settlement and judgment to all health care providers in connection with a single occurrence; provided, that the report shall not contain any claimant's social security number. The report shall differentiate between health care facilities and health care providers listed in  56-54-103. The report shall also include information as to whether any healthcare provider named in any claim received payment from TennCare for the incident that is the subject of the respective claim.  
 This chapter shall be known and may be cited as the Tennessee Vehicle Protection Product Act.  
 As used in this chapter, unless the context otherwise requires:   Administrator means a third party, other than the warrantor, who is designated by the warrantor to be responsible for the administration of vehicle protection product warranties;   Commissioner means the commissioner of commerce and insurance;   Incidental costs means expenses specified in the warranty, incurred by the warranty holder, related to the failure of the vehicle protection product to perform as provided in the warranty. Incidental costs may include, but not be limited to, insurance policy deductibles, rental vehicle charges, the difference between the actual value of the stolen vehicle at the time of theft and the cost of a replacement vehicle, sales taxes, registration fees, transaction fees, and mechanical inspection fees;    Vehicle protection product means a vehicle protection device, system, or service that:   Is installed on or applied to a vehicle;   Is designed to prevent loss or damage to a vehicle from a specific cause; and   Includes a written warranty;     Vehicle protection product includes, but is not limited to, alarm systems, body part marking products, steering locks, window etch products, pedal and ignition locks, fuel and ignition kill switches, and electronic, radio, and satellite tracking devices;     Vehicle protection product warrantor or warrantor means a person who is contractually obligated to the warranty holder under the terms of the vehicle protection product warranty agreement. Warrantor does not include an authorized insurer;   Vehicle protection product warranty or warranty means a written agreement by a warrantor that provides that, if the vehicle protection product fails to prevent loss or damage to a vehicle from a specific cause, then the warranty holder shall be paid specified incidental costs by the warrantor as a result of the failure of the vehicle protection product to perform pursuant to the terms of the warranty;   Warranty holder means the person who purchases a vehicle protection product or who is a permitted transferee; and   Warranty reimbursement insurance policy means a policy of insurance that is issued to the vehicle protection product warrantor to provide reimbursement to the warrantor, or to pay on behalf of the warrantor, all covered contractual obligations incurred by the warrantor under the terms and conditions of the insured vehicle protection product warranties sold by the warrantor.   
  No vehicle protection product may be sold or offered for sale in this state unless the seller, warrantor, and administrator, if any, comply with this chapter.   A vehicle protection product warranty provided or sold in compliance with this chapter is not a contract of insurance.   Warranties, indemnity agreements, and guarantees that are not provided as a part of a vehicle protection product are not subject to this chapter.   
  A person may not operate as a warrantor, or represent to the public that the person is a warrantor, unless the person is registered with the department on a form prescribed by the commissioner.   Warrantor registration records shall be filed annually and shall be updated by the warrantor within thirty (30) days of any change. The registration records shall contain the following information:  The warrantor's name, any other names under which the warrantor does business in this state, principal office address, and telephone number;   The names of the warrantor's executive officer or officers directly responsible for the warrantor's vehicle protection product business;   The name, address, and telephone number of any administrators designated by the warrantor to be responsible for the administration of vehicle protection product warranties in this state;   A copy of the warranty reimbursement insurance policy or policies, or other financial information required by  56-55-105;   A copy of each warranty the warrantor proposes to use in this state; and   A statement indicating under which provision of  56-55-105 the warrantor qualifies to do business in this state as a warrantor.     The commissioner may charge each registrant a reasonable fee to offset the cost of processing the registration and maintaining the records. The fee shall be set by the commissioner in an amount not to exceed the amount necessary to defray the department's expenses in administering this chapter.   If a registrant fails to register by the renewal deadline, the commissioner shall give the registrant written notice of the failure, and the registrant shall have thirty (30) days to complete the renewal of the registration before the registration is revoked. Revocation for failure to renew a registration does not require any additional notice or a hearing.   An administrator or person who sells or solicits a sale of a vehicle protection product, but who is not a warrantor, shall not be required to register as a warrantor, or be licensed under the insurance laws of this state, to sell vehicle protection products.   
 No vehicle protection product shall be sold or offered for sale in this state unless the vehicle protection product warrantor is insured under a warranty insurance policy meeting the following conditions in order to ensure adequate performance under the warranty:   The warranty reimbursement insurance policy is issued by an insurer authorized to do business in this state and provides that the insurer will pay to, or on behalf of, the warrantor one hundred percent (100%) of all sums that the warrantor is legally obligated to pay according to the warrantor's contractual obligations under the warrantor's vehicle protection product warranty;   A true and correct copy of the warranty reimbursement insurance policy has been filed with the commissioner by the warrantor; and   The policy contains the provisions required by  56-55-106.   
 No warranty reimbursement insurance policy shall be issued, sold, or offered for sale in this state unless the policy meets the following conditions:   The policy states that the issuer of the policy will reimburse, or pay on behalf of the vehicle protection product warrantor, all covered sums that the warrantor is legally obligated to pay, or will provide all service that the warrantor is legally obligated to perform, according to the warrantor's contractual obligations under the provisions of the insured warranties sold by the warrantor;   The policy states that, in the event that payment due under the terms of the warranty is not provided by the warrantor within sixty (60) days after proof of loss has been filed according to the terms of the warranty by the warranty holder, the warranty holder may file directly with the warranty reimbursement insurance company for reimbursement;   The policy provides that a warranty reimbursement insurance company that insures a warranty shall be deemed to have received payment of the premium, if the warranty holder paid for the vehicle protection product and the insurer's liability under the policy shall not be reduced or relieved by a failure of the warrantor, for any reason, to report the issuance of a warranty to the insurer; and   The policy has the following provisions regarding cancellation of the policy:  The issuer of a reimbursement insurance policy shall not cancel the policy until a notice of cancellation, in writing, has been mailed or delivered to the commissioner and each insured warrantor;   The cancellation of a reimbursement insurance policy shall not reduce the issuer's responsibility for vehicle protection products sold prior to the date of cancellation; and   In the event an insurer cancels a policy that a warrantor has filed with the commissioner, the warrantor will do either of the following:   File a copy of a new policy with the commissioner before the termination of the prior policy; provided, that there is no lapse in coverage following the termination of the prior policy; or   Discontinue acting as a warrantor as of the termination date of the policy, until a new policy becomes effective and is accepted by the commissioner.       
  Every vehicle protection product warranty shall be written in clear, understandable language and shall be printed or typed in an easy-to-read point size and font and shall not be sold or offered for sale in the state unless the warranty:  Contains a disclosure that reads substantially as follows: This agreement is a product warranty and is not insurance.;   Identifies the warrantor, the administrator, if any, the seller, and the warranty holder;   Sets forth the procedure for making a claim, including a telephone number;   Sets forth the total purchase price and the terms under which it is to be paid; provided, however, that the purchase price is not required to be preprinted on the vehicle protection product warranty and may be negotiated with the consumer at the time of sale;   Sets forth any terms, restrictions, or conditions governing transferability of the warranty, if any;   Conspicuously sets forth all of the obligations and duties of the warranty holder, such as the duty to protect against any further damage to the vehicle, the obligation to notify the warrantor in advance of any repair, or other similar requirements, if any;   Conspicuously states the existence of a deductible amount, if any;   Specifies the payments or performance to be provided under the warranty, including payments for incidental costs, the manner of calculation or determination of payments or performance, and any limitations, exceptions, or exclusions;   Sets forth the conditions on which substitution will be allowed;   Conspicuously states that the obligations of the warrantor to the warranty holder are insured under a warranty reimbursement insurance policy;   Conspicuously states that, in the event a warranty holder must make a claim against a party other than the warranty reimbursement insurance policy issuer, the warranty holder is entitled to make a direct claim against the insurer upon the failure of the warrantor to pay any claim or meet any obligation under the terms of the warranty, within sixty (60) days after proof of loss has been filed with the warrantor; and   Conspicuously states the name and address of the issuer of the warranty reimbursement insurance policy. This information need not be preprinted on the warranty form, but may be stamped on the warranty.     At the time of sale, the seller or warrantor shall provide to the purchaser:  A copy of the vehicle protection product warranty; or   A receipt, or other written evidence of the purchase of the vehicle protection product, and a copy of the warranty, within thirty (30) days of the date of purchase.     
  No vehicle protection product may be sold or offered for sale in this state, unless the vehicle protection product warranty clearly states the terms and conditions governing the cancellation of the sale and warranty, if any.   The warrantor may only cancel the warranty if the warranty holder does any of the following:  Fails to pay for the vehicle protection product;   Makes a material misrepresentation to the seller or warrantor;   Commits fraud; or   Substantially breaches the warranty holder's duties under the warranty.     A warrantor canceling a warranty shall mail written notice of cancellation to the warranty holder at the last address of the warranty holder in the warrantor's records, at least thirty (30) days prior to the effective date of the cancellation. The notice shall state the effective date of the cancellation and the reason for the cancellation.   
  Unless licensed as an insurance company, a vehicle protection product warrantor shall not use in its name, contracts, or literature the words insurance, casualty, surety, mutual, or any other word that is descriptive of the insurance, casualty, or surety business or that is deceptively similar to the name or description of any insurance or surety corporation or any other vehicle protection product warrantor. A warrantor may use the term guaranty or a similar word in the warrantor's name.   A vehicle protection product warrantor shall not make, permit, or cause any false or misleading statements, either oral or written, in connection with the sale, offer to sell, or advertisement of a vehicle protection product.   A vehicle protection product warrantor shall not permit or cause the omission of any material statement in connection with the sale, offer to sell, or advertisement of a vehicle protection product, that, under the circumstances, should have been made, in order to make the statements that were made not misleading.   A vehicle protection product warrantor shall not make, permit, or cause any false or misleading statements, either oral or written, about the performance required or payments that may be available under the vehicle protection product warranty.   A vehicle protection product warrantor shall not make, permit, or cause any statement or practice that has the effect of creating or maintaining a fraud.   A vehicle protection product seller or warrantor may not require, as a condition of sale or financing, that a retail purchaser of a motor vehicle purchase a vehicle protection product that is not installed on the motor vehicle at the time of sale.   
  All vehicle protection product warrantors shall keep accurate accounts, books, and records concerning transactions regulated under this chapter.   A vehicle protection product warrantor's accounts, books, and records shall include:  Copies of all vehicle protection product warranties;   The name and address of each warranty holder; and   The dates, amounts, and descriptions of all receipts, claims, and expenditures.     A vehicle protection product warrantor shall retain all required accounts, books, and records pertaining to each warranty holder for at least two (2) years after the specified period of coverage has expired. A warrantor discontinuing business in this state shall maintain the records until it furnishes the commissioner satisfactory proof that it has discharged all obligations to warranty holders in this state.   Vehicle protection product warrantors shall make all accounts, books, and records concerning transactions regulated under this chapter available to the commissioner for the purpose of examination.   
   The commissioner may conduct examinations of warrantors, administrators, or other persons to enforce this chapter, and to protect warranty holders in this state. Upon request of the commissioner, a warrantor shall make available to the commissioner all accounts, books, and records concerning vehicle protection products sold by the warrantor that are necessary to enable the commissioner to reasonably determine compliance or noncompliance with this chapter.   Any person or entity examined shall pay any and all appropriate and reasonable costs incurred by the commissioner during the examination, including, but not limited to, the compensation of experts, actuaries, examiners, or other persons that may be contracted for by the commissioner or the commissioner's designated appointee for the purpose of assisting in the examination. The compensation shall be fixed at a reasonable amount, commensurate with usual compensation for like services, and shall be contracted for in accordance with applicable state contracting procedures, if applicable.     The commissioner may take action that is necessary or appropriate to enforce this chapter and the commissioner's rules and orders, and to protect warranty holders in this state. If a person or entity violates this chapter and the commissioner reasonably believes the violation threatens to cause irreparable loss or injury to the property or business of any person or company located in this state, the commissioner may:  Issue an order directed to the warrantor to cease and desist from engaging in further acts, practices, or transactions that are causing the conduct;   Issue an order prohibiting the warrantor from selling, or offering for sale, vehicle protection products in violation of this chapter;   Issue an order imposing a civil penalty on the warrantor; or   Issue any combination of subdivisions (b)(1)-(3), as applicable.     At any hearing under this chapter, the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, shall apply.   The commissioner may bring an action in any court of competent jurisdiction, for an injunction or other appropriate relief, to enjoin threatened or existing violations of this chapter, or of the commissioner's orders or rules. An action filed under this section may also seek restitution on behalf of persons aggrieved by a violation of this chapter, or orders or rules of the commissioner.   A person or entity that is found to have violated this chapter or orders or rules of the commissioner may be ordered to pay to the commissioner a civil penalty in an amount determined by the commissioner, not to exceed five thousand dollars ($5,000) per violation.   
  Any warrantor doing business in this state in accordance with this chapter shall be deemed to have appointed the commissioner its true and lawful attorney upon whom may be served all lawful process in any action or proceeding against it.   Any warrantor doing business in this state unauthorized by this chapter shall be deemed to have appointed the secretary of state to be its true and lawful attorney upon whom may be served all lawful process in any action or proceeding against it.   
 The commissioner may adopt administrative rules consistent with this chapter that are necessary to implement this chapter. The rules shall include disclosures for the benefit of the warranty holder, record keeping requirements, registration fees, penalties, and procedures for public complaints. The rules shall also include the conditions under which surplus lines insurers may be rejected for the purpose of underwriting vehicle protection product warranty agreements.  
 This chapter applies to all vehicle protection products sold or offered for sale on or after July 1, 2006. The failure of any person to comply with this chapter prior to July 1, 2006, shall not be admissible in any court proceeding, administrative proceeding, arbitration, or alternative dispute resolution proceeding and may not otherwise be used to prove that the action of any person or the affected vehicle protection product was unlawful or otherwise improper.  
 Nothing in this chapter shall authorize the sale of warranties, as defined in  56-55-102, except as part of a vehicle protection product.  
 As used in this chapter, professional employer organization benefit and welfare plan means a plan offered to the covered employees of a professional employer organization registered pursuant to the Tennessee Professional Employer Organization Act, compiled in title 62, chapter 43, and as amended.  
 A professional employer organization may sponsor and maintain employee benefit and welfare plans in accordance with  62-43-108(c), for the benefit of covered employees. The self-insured plans developed under this section are not subject to the premium taxes imposed by this title. The department may promulgate rules regulating self-insured plans under this section.  
 As used in this chapter, unless the context otherwise requires:   Commissioner means the commissioner of commerce and insurance;   Department means the department of commerce and insurance;   Member means any person who enrolls at no cost, or who pays fees, dues, charges or other consideration for the right to enroll to receive the purported benefits of a prescription drug discount plan;   Operator means any person that engages as principal in the business of offering, selling, marketing, advertising or otherwise distributing a prescription drug discount plan within this state. Operator does not include discount cards offered by a nonprofit association to its members as an incidental benefit to membership in the association; provided, that membership in the association entitles members to apply for insurance or other health benefits that are available only to members of the association;   Person means an individual, corporation, partnership, association, joint venture, joint stock company, trust, unincorporated organization, limited liability company, any similar entity, or any combination of these entities;   Prescription drug has the same meaning as the term is defined in  63-10-204; and   Prescription drug discount plan means any card or other purchasing mechanism or device, that is not insurance, that purports to offer discounts or access to discounts to any person for the retail purchase of prescription drugs from licensed pharmacies. A prescription drug discount plan does not include any drug discount card or drug benefit plan provided by a self-insured employer's group health benefits plan, or any prescription drug discount plan offered by an insurer licensed under this title in conjunction with health insurance.   
  The department of health is authorized to develop and implement a prescription drug discount plan, which shall be known as Volunteer Rx, or, if the department of health deems appropriate, may contract for, pursuant to state purchasing laws, a prescription drug discount plan. The purpose of this section is to assist in providing, when possible, cost savings on medications for uninsured Tennesseans, or for insured Tennesseans whose insurance does not provide for prescription drug coverage on or after January 1, 2005.   Notwithstanding subsection (a), the department of health may, if funding is made available through the general appropriations act, provide benefits through the prescription drug discount plan. The benefits would be limited by the funds specifically appropriated for that purpose. The department of health shall also have the authority to develop and implement prescription drug discount plans targeted for specific defined populations. The plans may also incorporate benefits; provided, that funds are specifically allocated for the benefits in the general appropriations act.   In developing the plans authorized by this section, the department of health may consider the use of different means to lower the overall cost to participants, including, but not limited to, the payment or waiver of any membership fees, as well as the use of cost-sharing arrangements and deductibles.   Nothing in the creation of a prescription drug discount program, pursuant to this section, shall be construed as creating any entitlement by any individuals or entities to any services or medications.   
  An operator of a prescription drug discount plan must obtain a valid certificate of registration from the commissioner. The certificate shall be valid for one (1) year from the date of issuance. In order to receive a valid certificate of registration, the operator shall file an application on a form adopted by the commissioner, and provide or demonstrate to the commissioner each of the following:  The name and principal place of business of the operator;   A copy of the operator's promotional materials that are distributed to prospective members;   A list of drugs and drug classifications that make up the drug discount plan, or a notation that the plan is an open formulary; and   The name and address of the agent in this state for service of process.     Notwithstanding any law to the contrary, it shall be unlawful and a violation of this chapter for any operator, after August 1, 2005, to sell, market, promote, advertise or otherwise distribute a prescription drug discount plan in Tennessee without first complying with the registration provisions of this chapter, and complying with  47-18-2701 and 47-18-2702.   
  Each prescription drug discount card, or any materials distributed on behalf of any prescription drug discount plan covered under this chapter, shall expressly provide, in bold and reasonably prominent type, that the card or plan does not constitute health insurance. The card or distributed materials must also contain a toll-free number for customer service, and provide the operator's corporate name and a website address, if applicable.   The operator must provide each prospective member, prior to becoming a member, with a complete description of the fees that a member of the plan could be assessed, including any upfront fees or membership fees associated with the plan, along with the estimated average savings typically associated with the plan's general terms and conditions.   An operator must provide each member with:  A network directory of participating pharmacies, which shall be updated annually, or access to the information online or by a toll-free number;   A list of the prescription drugs covered by the card or plan, which shall be updated annually, or access to the information online, by a toll-free number, or by way of a notation that the plan is an open formulary; and   A toll-free number for customer service.     
  Each member shall have the right to cancel membership in a plan within thirty (30) days of joining the plan, and shall have the right to have refunded any and all membership fees paid during that initial membership.   For prescription drug discount plans requiring a paid membership, after the initial thirty-day membership period, a member shall have the right to cancel membership, in accordance with the policies established by the operator. Information concerning the cancellation policy of the operator must be provided to the member at the time of the initial membership and cannot be changed unless thirty-day written notice is provided to the member.   
 After notice and hearing, the commissioner may levy an administrative penalty, in an amount up to ten thousand dollars ($10,000), for each violation of the registration provisions of this chapter. Each day of a continuing violation constitutes a separate violation for purposes of this chapter.  
 This chapter shall be known and may be cited as the Interstate Insurance Product Regulation Compact Act of 2007.  
 Pursuant to terms and conditions of this compact, Tennessee seeks to join with other states and establish the Interstate Insurance Product Regulation Compact, and thus become a member of the interstate insurance product regulation commission. The commissioner of commerce and insurance is designated to serve as the representative of this state to the commission. Therefore, the Interstate Insurance Product Regulation Compact is enacted and entered into with all other jurisdictions legally joining it in the form substantially as follows:   Article I. Purposes.   The purposes of this compact are, through means of joint and cooperative action among the compacting states:   1.  To promote and protect the interest of consumers of individual and group annuity, life insurance, disability income and long-term insurance products;   2.  To develop uniform standards for insurance products covered under the compact;   3.  To establish a central clearinghouse to receive and provide prompt review of insurance products covered under the compact and, in certain cases, advertisements related thereto, submitted by insurers authorized to do business in one (1) or more compacting states;   4.  To give appropriate regulatory approval to those product filings and advertisements satisfying the applicable uniform standard;   5.  To improve coordination of regulatory resources and expertise between state insurance departments regarding the setting of uniform standards and review of insurance products covered under the compact;   6.  To create the interstate insurance product regulation commission; and   7.  To perform these and such other related functions as may be consistent with the state regulation of the business of insurance.   Article II. Definitions.   For purposes of this compact:   1.  Advertisement means any material designed to create public interest in a product, or induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain a policy, as more specifically defined in the rules and operating procedures of the commission;   2.  Bylaws mean those bylaws established by the commission for its governance, or for directing or controlling the commission's actions or conduct;   3.  Commission means the interstate insurance product regulation commission established by this compact;   4.  Commissioner means the chief insurance regulatory official of a state, including, but not limited to, commissioner, superintendent, director or administrator;   5.  Compacting state means any state which has enacted this compact legislation and which has not withdrawn pursuant to Article XIV, Section 1, or been terminated pursuant to Article XIV, Section 2;   6.  Domiciliary state means the state in which an insurer is incorporated or organized; or, in the case of an alien insurer, its state of entry;   7.  Insurer means any entity licensed by a state to issue contracts of insurance for any of the lines of insurance covered by this compact;   8.  Member means the person chosen by a compacting state as its representative to the commission, or the member's designee;   9.  Non-compacting state means any state which is not at the time a compacting state;   10.  Operating procedures mean procedures promulgated by the commission implementing a rule, uniform standard or a provision of this compact;   11.  Product means the form of a policy or contract, including any application, endorsement, or related form which is attached to and made a part of the policy or contract, and any evidence of coverage or certificate, for an individual or group annuity, life insurance, disability income or long-term care insurance product that an Insurer is authorized to issue;   12.  Rule means a statement of general or particular applicability and future effect promulgated by the commission, including a uniform standard developed pursuant to Article VII of this compact, designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of the commission, which shall have the force and effect of law in the compacting states;   13.  State means any state, district or territory of the United States of America;   14.  Third-party filer means an entity that submits a product filing to the commission on behalf of an insurer; and   15.  Uniform standard means a standard adopted by the commission for a product line, pursuant to Article VII of this compact, and shall include all of the product requirements in aggregate; provided, that each uniform standard shall be construed, whether express or implied, to prohibit the use of any inconsistent, misleading or ambiguous provisions in a product and the form of the product made available to the public shall not be unfair, inequitable or against public policy as determined by the commission.   Article III. Establishment of the Commission and Venue.   1.  The compacting states hereby create and establish a joint public agency known as the interstate insurance product regulation commission. Pursuant to Article IV, the commission will have the power to develop uniform standards for product lines, receive and provide prompt review of products filed therewith, and give approval to those product filings satisfying applicable uniform standards; provided, it is not intended for the commission to be the exclusive entity for receipt and review of insurance product filings. Nothing herein shall prohibit any insurer from filing its product in any state wherein the insurer is licensed to conduct the business of insurance; and any such filing shall be subject to the laws of the state where filed.   2.  The commission is a body corporate and politic, and an instrumentality of the compacting states.   3.  The commission is solely responsible for its liabilities except as otherwise specifically provided in this compact.   4.  Venue is proper and judicial proceedings by or against the commission shall be brought solely and exclusively in a court of competent jurisdiction where the principal office of the commission is located.   Article IV. Powers of the Commission.   The commission shall have the following powers:   1.  To promulgate rules, pursuant to Article VII of this Compact, which shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in this compact;   2.  To exercise its rule-making authority and establish reasonable uniform standards for products covered under the compact, and advertisement related thereto, which shall have the force and effect of law and shall be binding in the compacting states, but only for those products filed with the commission, provided, that a compacting state shall have the right to opt out of such uniform standard pursuant to Article VII, to the extent and in the manner provided in this compact, and, provided further, that any uniform standard established by the commission for long-term care insurance products may provide the same or greater protections for consumers as, but shall not provide less than, those protections set forth in the National Association of Insurance Commissioners' Long-Term Care Insurance Model Act and Long-Term Care Insurance Model Regulation, respectively, adopted as of 2001. The commission shall consider whether any subsequent amendments to the NAIC Long-Term Care Insurance Model Act or Long-Term Care Insurance Model Regulation adopted by the NAIC require amending of the uniform standards established by the commission for long-term care insurance products;   3.  To receive and review in an expeditious manner products filed with the commission, and rate filings for disability income and long-term care insurance products, and give approval of those products and rate filings that satisfy the applicable uniform standard, where such approval shall have the force and effect of law and be binding on the compacting states to the extent and in the manner provided in this compact;   4.  To receive and review in an expeditious manner advertisement relating to long-term care insurance products for which uniform standards have been adopted by the commission, and give approval to all advertisement that satisfies the applicable uniform standard. For any product covered under this compact, other than long-term care insurance products, the commission shall have the authority to require an insurer to submit all or any part of its advertisement with respect to that product for review or approval prior to use, if the commission determines that the nature of the product is such that an advertisement of the product could have the capacity or tendency to mislead the public. The actions of the commission as provided in this section shall have the force and effect of law and shall be binding in the compacting states to the extent and in the manner provided in the compact;   5.  To exercise its rule-making authority and designate products and advertisement that may be subject to a self-certification process without the need for prior approval by the commission;   6.  To promulgate operating procedures, pursuant to Article VII of this compact, which shall be binding in the compacting states to the extent and in the manner provided in this compact;   7.  To bring and prosecute legal proceedings or actions in its name as the commission; provided, that the standing of any state insurance department to sue or be sued under applicable law shall not be affected;   8.  To issue subpoenas requiring the attendance and testimony of witnesses and the production of evidence;   9.  To establish and maintain offices;   10.  To purchase and maintain insurance and bonds;   11.  To borrow, accept or contract for services of personnel, including, but not limited to, employees of a compacting state;   12.  To hire employees, professionals or specialists, and elect or appoint officers, and to fix their compensation, define their duties and give them appropriate authority to carry out the purposes of this compact, and determine their qualifications; and to establish the commission's personnel policies and programs relating to, among other things, conflicts of interest, rates of compensation and qualifications of personnel;   13.  To accept any and all appropriate donations and grants of money, equipment, supplies, materials and services, and to receive, utilize and dispose of the same; provided that at all times the commission shall strive to avoid any appearance of impropriety;   14.  To lease, purchase, accept appropriate gifts or donations of, or otherwise to own, hold, improve or use, any property, real, personal or mixed; provided that at all times the commission shall strive to avoid any appearance of impropriety;   15.  To sell, convey, mortgage, pledge, lease, exchange, abandon or otherwise dispose of any property, real, personal or mixed;   16.  To remit filing fees to compacting states as may be set forth in the bylaws, rules or operating procedures;   17.  To enforce compliance by compacting states with rules, uniform standards, operating procedures and bylaws;   18.  To provide for dispute resolution among compacting states;   19.  To advise compacting states on issues relating to insurers domiciled or doing business in non-compacting states, consistent with the purposes of this compact;   20.  To provide advice and training to those personnel in state insurance departments responsible for product review, and to be a resource for state insurance departments;   21.  To establish a budget and make expenditures;   22.  To borrow money;   23.  To appoint committees, including advisory committees comprising members, state insurance regulators, state legislators or their representatives, insurance industry and consumer representatives, and such other interested persons as may be designated in the bylaws;   24.  To provide and receive information from, and to cooperate with law enforcement agencies;   25.  To adopt and use a corporate seal; and   26.  To perform such other functions as may be necessary or appropriate to achieve the purposes of this compact consistent with the state regulation of the business of insurance.   Article V. Organization of the Commission.   1.  Membership, voting and bylaws.   a.  Each compacting state shall have and be limited to one (1) member. Each member shall be qualified to serve in that capacity pursuant to applicable law of the compacting state. Any member may be removed or suspended from office as provided by the law of the state from which the member shall be appointed. Any vacancy occurring in the commission shall be filled in accordance with the laws of the compacting state wherein the vacancy exists. Nothing herein shall be construed to affect the manner in which a compacting state determines the election or appointment and qualification of its own commissioner.   b.  Each member shall be entitled to one (1) vote and shall have an opportunity to participate in the governance of the commission in accordance with the bylaws. Notwithstanding any provision herein to the contrary, no action of the commission with respect to the promulgation of a uniform standard shall be effective unless two thirds (2/3) of the members vote in favor thereof.   c.  The commission shall, by a majority of the members, prescribe bylaws to govern its conduct as may be necessary or appropriate to carry out the purposes, and exercise the powers, of the compact, including, but not limited to:   i.  Establishing the fiscal year of the commission;   ii.  Providing reasonable procedures for appointing and electing members, as well as holding meetings, of the management committee;   iii.  Providing reasonable standards and procedures:   For the establishment and meetings of other committees; and   Governing any general or specific delegation of any authority or function of the commission;   iv.  Providing reasonable procedures for calling and conducting meetings of the commission that consist of a majority of commission members, ensuring reasonable advance notice of each such meeting, and providing for the right of citizens to attend each such meeting with enumerated exceptions designed to protect the public's interest, the privacy of individuals, and insurers' proprietary information, including trade secrets. The commission may meet in camera only after a majority of the entire membership votes to close a meeting en toto or in part. As soon as practicable, the commission must make public:   A copy of the vote to close the meeting revealing the vote of each member with no proxy votes allowed; and   Votes taken during such meeting;   v.  Establishing the titles, duties and authority and reasonable procedures for the election of the officers of the commission;   vi.  Providing reasonable standards and procedures for the establishment of the personnel policies and programs of the commission. Notwithstanding any civil service or other similar laws of any compacting state, the bylaws shall exclusively govern the personnel policies and programs of the commission;   vii.  Promulgating a code of ethics to address permissible and prohibited activities of commission members and employees; and   viii.  Providing a mechanism for winding up the operations of the commission and the equitable disposition of any surplus funds that may exist after the termination of this compact after the payment and/or reserving of all of its debts and obligations.   d.  The commission shall publish its bylaws in a convenient form and file a copy thereof and a copy of any amendment thereto, with the appropriate agency or officer in each of the compacting states.   2.  Management Committee, Officers and Personnel.   a.  A management committee comprising no more than fourteen (14) members shall be established as follows:   i.  One (1) member from each of the six (6) compacting states with the largest premium volume for individual and group annuities, life, disability income and long-term care insurance products, determined from the records of the NAIC for the prior year;   ii.  Four (4) members from those compacting states with at least two percent (2%) of the market based on the premium volume described above, other than the six (6) compacting states with the largest premium volume, selected on a rotating basis as provided in the bylaws; and   iii.  Four (4) members from those compacting states with less than two percent (2%) of the market, based on the premium volume described above, with one (1) selected from each of the four (4) zone regions of the NAIC as provided in the bylaws.   b.  The management committee shall have such authority and duties as may be set forth in the bylaws, including, but not limited to:   i.  Managing the affairs of the commission in a manner consistent with the bylaws and purposes of the commission;   ii.  Establishing and overseeing an organizational structure within, and appropriate procedures for, the commission to provide for the creation of uniform standards and other rules, receipt and review of product filings, administrative and technical support functions, review of decisions regarding the disapproval of a product filing, and the review of elections made by a compacting state to opt out of a uniform standard; provided that a uniform standard shall not be submitted to the compacting states for adoption unless approved by two thirds (2/3) of the members of the management committee;   iii.  Overseeing the offices of the commission; and   iv.  Planning, implementing, and coordinating communications and activities with other state, federal and local government organizations in order to advance the goals of the commission.   c.  The commission shall elect annually officers from the management committee, with each having such authority and duties, as may be specified in the bylaws.   d.  The management committee may, subject to the approval of the commission, appoint or retain an executive director for such period, upon such terms and conditions and for such compensation as the commission may deem appropriate. The executive director shall serve as secretary to the commission, but shall not be a member of the commission. The executive director shall hire and supervise such other staff as may be authorized by the commission.   3.  Legislative and Advisory Committees.   a.  A legislative committee comprising state legislators or their designees shall be established to monitor the operations of, and make recommendations to, the commission, including the management committee; provided that the manner of selection and term of any legislative committee member shall be as set forth in the bylaws. Prior to the adoption by the commission of any uniform standard, revision to the bylaws, annual budget or other significant matter as may be provided in the bylaws, the management committee shall consult with and report to the legislative committee.   b.  The commission shall establish two (2) advisory committees, one of which shall comprise consumer representatives independent of the insurance industry, and the other comprising insurance industry representatives.   c.  The commission may establish additional advisory committees as its bylaws may provide for the carrying out of its functions.   4.  Corporate Records of the Commission.   The commission shall maintain its corporate books and records in accordance with the bylaws.   5.  Qualified Immunity, Defense and Indemnification.   a.  The members, officers, executive director, employees and representatives of the commission shall be immune from suit and liability, either personally or in their official capacity, for any claim for damage to or loss of property or personal injury or other civil liability caused by or arising out of any actual or alleged act, error or omission that occurred, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities; provided, that nothing in this paragraph shall be construed to protect any such person from suit and/or liability for any damage, loss, injury or liability caused by the intentional or willful and wanton misconduct of that person.   b.  The commission shall defend any member, officer, executive director, employee or representative of the commission in any civil action seeking to impose liability arising out of any actual or alleged act, error or omission that occurred within the scope of commission employment, duties or responsibilities, or that the person against whom the claim is made had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities; provided, that nothing herein shall be construed to prohibit that person from retaining his or her own counsel; and provided further, that the actual or alleged act, error or omission did not result from that person's intentional or willful and wanton misconduct.   c.  The commission shall indemnify and hold harmless any member, officer, executive director, employee or representative of the commission for the amount of any settlement or judgment obtained against that person arising out of any actual or alleged act, error or omission that occurred within the scope of commission employment, duties or responsibilities, or that such person had a reasonable basis for believing occurred within the scope of commission employment, duties or responsibilities; provided, that the actual or alleged act, error or omission did not result from the intentional or willful and wanton misconduct of that person.   Article VI. Meetings and Acts of the Commission.   1.  The commission shall meet and take such actions as are consistent with the provisions of this compact and the bylaws.   2.  Each member of the commission shall have the right and power to cast a vote to which that compacting state is entitled and to participate in the business and affairs of the commission. A member shall vote in person or by such other means as provided in the bylaws. The bylaws may provide for members' participation in meetings by telephone or other means of communication.   3.  The commission shall meet at least once during each calendar year. Additional meetings shall be held as set forth in the bylaws.   Article VII. Rules Operating Procedures.   1.  Rulemaking Authority. The commission shall promulgate reasonable rules, including uniform standards, and operating procedures in order to effectively and efficiently achieve the purposes of this compact. Notwithstanding the foregoing, in the event the commission exercises its rulemaking authority in a manner that is beyond the scope of the purposes of this compact, or the powers granted hereunder, then such an action by the commission shall be invalid and have no force and effect.   2.  Rulemaking Procedure. Rules and operating procedures shall be made pursuant to a rulemaking process that conforms to the Model State Administrative Procedure Act of 1981 as amended, as may be appropriate to the operations of the commission. Before the commission adopts a uniform standard, the commission shall give written notice to the relevant state legislative committee(s) in each compacting state responsible for insurance issues of its intention to adopt the uniform standard. The commission in adopting a uniform standard shall consider fully all submitted materials and issue a concise explanation of its decision.   3.  Effective Date and Opt Out of a Uniform Standard. A uniform standard shall become effective ninety (90) days after its promulgation by the commission or such later date as the commission may determine; provided, however, that a compacting state may opt out of a uniform standard as provided in this article. Opt out shall be defined as any action by a compacting state to decline to adopt or participate in a promulgated uniform standard. All other rules and operating procedures, and amendments thereto, shall become effective as of the date specified in each rule, operating procedure or amendment.   4.  Opt Out Procedure. A compacting state may opt out of a uniform standard, either by legislation or regulation duly promulgated by the insurance department under the compacting state's administrative procedure act. If a compacting state elects to opt out of a uniform standard by regulation, it must:   Give written notice to the commission no later than ten (10) business days after the uniform standard is promulgated, or at the time the state becomes a compacting state; and   Find that the uniform standard does not provide reasonable protections to the citizens of the state, given the conditions in the state. The commissioner shall make specific findings of fact and conclusions of law, based on a preponderance of the evidence, detailing the conditions in the state which warrant a departure from the uniform standard and determining that the uniform standard would not reasonably protect the citizens of the state. The commissioner must consider and balance the following factors and find that the conditions in the state and needs of the citizens of the state outweigh:  Notwithstanding the foregoing, a compacting state may, at the time of its enactment of this compact, prospectively opt out of all uniform standards involving long-term care insurance products by expressly providing for such opt out in the enacted compact, and such an opt out shall not be treated as a material variance in the offer or acceptance of any state to participate in this compact. Such an opt out shall be effective at the time of enactment of this compact by the compacting state and shall apply to all existing uniform standards involving long-term care insurance products and those subsequently promulgated.   5.  Effect of Opt Out. If a compacting state elects to opt out of a uniform standard, the uniform standard shall remain applicable in the compacting state electing to opt out until such time the opt out legislation is enacted into law or the regulation opting out becomes effective.   Once the opt out of a uniform standard by a compacting state becomes effective as provided under the laws of that state, the uniform standard shall have no further force and effect in that state unless and until the legislation or regulation implementing the opt out is repealed or otherwise becomes ineffective under the laws of the state. If a compacting state opts out of a uniform standard after the uniform standard has been made effective in that state, the opt out shall have the same prospective effect as provided under Article XIV for withdrawals.   6.  Stay of Uniform Standard. If a compacting state has formally initiated the process of opting out of a uniform standard by regulation, and while the regulatory opt out is pending, the compacting state may petition the commission, at least fifteen (15) days before the effective date of the uniform standard, to stay the effectiveness of the uniform standard in that state. The commission may grant a stay if it determines the regulatory opt out is being pursued in a reasonable manner and there is a likelihood of success. If a stay is granted or extended by the commission, the stay or extension thereof may postpone the effective date by up to ninety (90) days, unless affirmatively extended by the commission; provided, a stay may not be permitted to remain in effect for more than one (1) year unless the compacting state can show extraordinary circumstances which warrant a continuance of the stay, including, but not limited to, the existence of a legal challenge which prevents the compacting state from opting out. A stay may be terminated by the commission upon notice that the rulemaking process has been terminated.   7.  Not later than thirty (30) days after a rule or operating procedure is promulgated, any person may file a petition for judicial review of the rule or operating procedure; provided, that the filing of such a petition shall not stay or otherwise prevent the rule or operating procedure from becoming effective unless the court finds that the petitioner has a substantial likelihood of success. The court shall give deference to the actions of the commission consistent with applicable law and shall not find the rule or operating procedure to be unlawful if the rule or operating procedure represents a reasonable exercise of the commission's authority.     The intent of the legislature to participate in, and the benefits of, an interstate agreement to establish national uniform consumer protections for the products subject to this compact; and   The presumption that a uniform standard adopted by the commission provides reasonable protections to consumers of the relevant product.   Article VIII. Commission Records and Enforcement.   1.  The commission shall promulgate rules establishing conditions and procedures for public inspection and copying of its information and official records, except such information and records involving the privacy of individuals and insurers' trade secrets. The commission may promulgate additional rules under which it may make available to federal and state agencies, including law enforcement agencies, records and information otherwise exempt from disclosure, and may enter into agreements with such agencies to receive or exchange information or records subject to nondisclosure and confidentiality provisions.   2.  Except as to privileged records, data and information, the laws of any compacting state pertaining to confidentiality or nondisclosure shall not relieve any compacting state commissioner of the duty to disclose any relevant records, data or information to the commission; provided, that disclosure to the commission shall not be deemed to waive or otherwise affect any confidentiality requirement; and further provided, that, except as otherwise expressly provided in this compact, the commission shall not be subject to the compacting state's laws pertaining to confidentiality and nondisclosure with respect to records, data and information in its possession. Confidential information of the commission shall remain confidential after such information is proved to any commissioner.   3.  The commission shall monitor compacting states for compliance with duly adopted bylaws, rules, including uniform standards, and operating procedures. The commission shall notify any non-complying compacting state in writing of its noncompliance with commission bylaws, rules or operating procedures. If a non-complying compacting state fails to remedy its noncompliance within the time specified in the notice of noncompliance, the compacting state shall be deemed to be in default as set forth in Article XIV.   4.  The commissioner of any state in which an insurer is authorized to do business, or is conducting the business of insurance, shall continue to exercise the commissioner's authority to oversee the market regulation of the activities of the insurer in accordance with the provisions of the state's law. The commissioner's enforcement of compliance with this compact is governed by the following provisions:   a.  With respect to the commissioner's market regulation of a product or advertisement that is approved or certified to the commission, the content of the product or advertisement shall not constitute a violation of the provisions, standards or requirements of this compact except upon a final order of the commission, issued at the request of a commissioner after prior notice to the insurer and an opportunity for hearing before the commission.   b.  Before a commissioner may bring an action for violation of any provision, standard or requirement of this compact relating to the content of an advertisement not approved or certified to the commission, the commission, or an authorized commission officer or employee, must authorize the action. However, authorization pursuant to this paragraph does not require notice to the insurer, opportunity for hearing or disclosure of requests for authorization or records of the commission's action on such requests.   Article IX. Dispute Resolution.   The commission shall attempt, upon the request of a member, to resolve any disputes or other issues that are subject to this compact and which may arise between two (2) or more compacting states, or between compacting states and non-compacting states, and the commission shall promulgate an operating procedure providing for resolution of such disputes.   Article X. Product Filing and Approval.   1.  Insurers and third-party filers seeking to have a product approved by the commission shall file the product with, and pay applicable filing fees to, the commission. Nothing in this compact shall be construed to restrict or otherwise prevent an insurer from filing its product with the insurance department in any state wherein the insurer is licensed to conduct the business of insurance, and such filing shall be subject to the laws of the states where filed.   2.  The commission shall establish appropriate filing and review processes and procedures pursuant to commission rules and operating procedures. Notwithstanding any provision herein to the contrary, the commission shall promulgate rules to establish conditions and procedures under which the commission will provide public access to product filing information. In establishing such rules, the commission shall consider the interests of the public in having access to such information, as well as protection of personal medical and financial information and trade secrets, that may be contained in a product filing or supporting information.   3.  Any product approved by the commission may be sold or otherwise issued in those compacting states for which the insurer is legally authorized to do business.   Article XI. Review of Commission Decisions Regarding Filings.   1.  Not later than thirty (30) days after the commission has given notice of a disapproved product or advertisement filed with the commission, the insurer or third-party filer whose filing was disapproved may appeal the determination to a review panel appointed by the commission. The commission shall promulgate rules to establish procedures for appointing such review panels and provide for notice and hearing. An allegation that the commission, in disapproving a product or advertisement filed with the commission, acted arbitrarily, capriciously, or in a manner that is an abuse of discretion or otherwise not in accordance with the law, is subject to judicial review in accordance with Article III, Section 4.   2.  The commission shall have authority to monitor, review and reconsider products and advertisement subsequent to their filing or approval upon a finding that the product does not meet the relevant uniform standard. Where appropriate, the commission may withdraw or modify its approval after proper notice and hearing, subject to the appeal process in Section 1 above.   Article XII. Finance.   1.  The commission shall pay or provide for the payment of the reasonable expenses of its establishment and organization. To fund the cost of its initial operations, the commission may accept contributions and other forms of funding from the National Association of Insurance Commissioners, compacting states and other sources. Contributions and other forms of funding from other sources shall be of such a nature that the independence of the commission concerning the performance of its duties shall not be compromised.   2.  The commission shall collect a filing fee from each insurer and third-party filer filing a product with the commission to cover the cost of the operations and activities of the commission and its staff in a total amount sufficient to cover the commission's annual budget.   3.  The commission's budget for a fiscal year shall not be approved until it has been subject to notice and comment as set forth in Article VII of this compact.   4.  The commission shall be exempt from all taxation in and by the compacting states.   5.  The commission shall not pledge the credit of any compacting state, except by and with the appropriate legal authority of that compacting state.   6.  The commission shall keep complete and accurate accounts of all its internal receipts, including grants and donations, and disbursements of all funds under its control. The internal financial accounts of the commission shall be subject to the accounting procedures established under its bylaws. The financial accounts and reports including the system of internal controls and procedures of the commission shall be audited annually by an independent certified public accountant. Upon the determination of the commission, but no less frequently than every three (3) years, the review of the independent auditor shall include a management and performance audit of the commission. The commission shall make an annual report to the governor and legislature of the compacting states, which shall include a report of the independent audit. The commission's internal accounts shall not be confidential and such materials may be shared with the commissioner of any compacting state upon request; provided, however, that any work papers related to any internal or independent audit and any information regarding the privacy of individuals' and insurers' proprietary information, including trade secrets, shall remain confidential.   7.  No compacting state shall have any claim to or ownership of any property held by or vested in the commission or to any commission funds held pursuant to the provisions of this compact.   Article XIII. Compacting States, Effective Date and Amendment.   1.  Any state is eligible to become a compacting state.   2.  The compact shall become effective and binding upon legislative enactment of the compact into law by two (2) compacting states; provided, that the commission shall become effective for purposes of adopting uniform standards for, reviewing, and giving approval or disapproval of, products filed with the commission that satisfy applicable uniform standards only after twenty-six (26) states are compacting states or, alternatively, by states representing greater than forty percent (40%) of the premium volume for life insurance, annuity, disability income and long-term care insurance products, based on records of the NAIC for the prior year. Thereafter, it shall become effective and binding as to any other compacting state upon enactment of the compact into law by that state.   3.  Amendments to the compact may be proposed by the commission for enactment by the compacting states. No amendment shall become effective and binding upon the commission and the compacting states unless and until all compacting states enact the amendment into law.   Article XIV. Withdrawal, Default and Termination.   1.  Withdrawal.   a.  Once effective, the compact shall continue in force and remain binding upon each and every compacting state; provided, that a compacting state may withdraw from the compact (withdrawing state) by enacting a statute specifically repealing the statute which enacted the compact into law.   b.  The effective date of withdrawal is the effective date of the repealing statute. However, the withdrawal shall not apply to any product filings approved or self-certified, or any advertisement of such products, on the date the repealing statute becomes effective, except by mutual agreement of the commission and the withdrawing state unless the approval is rescinded by the withdrawing state as provided in subsection e of this section.   c.  The commissioner of the withdrawing state shall immediately notify the management committee in writing upon the introduction of legislation repealing this compact in the withdrawing state.   d.  The commission shall notify the other compacting states of the introduction of such legislation within ten (10) days after its receipt of notice thereof.   e.  The withdrawing state is responsible for all obligations, duties and liabilities incurred through the effective date of withdrawal, including any obligations, the performance of which extend beyond the effective date of withdrawal, except to the extent those obligations may have been released or relinquished by mutual agreement of the commission and the withdrawing state. The commission's approval of products and advertisement prior to the effective date of withdrawal shall continue to be effective and be given full force and effect in the withdrawing state, unless formally rescinded by the withdrawing state in the same manner as provided by the laws of the withdrawing state for the prospective disapproval of products or advertisement previously approved under state law.   f.  Reinstatement following withdrawal of any compacting state shall occur upon the effective date of the withdrawing state reenacting the compact.   2.  Default.   a.  If the commission determines that any compacting state has at any time defaulted (defaulting state) in the performance of any of its obligations or responsibilities under this compact, the bylaws or duly promulgated rules or operating procedures, then, after notice and hearing as set forth in the bylaws, all rights, privileges and benefits conferred by this compact on the defaulting state shall be suspended from the effective date of default as fixed by the commission. The grounds for default include, but are not limited to, failure of a compacting state to perform its obligations or responsibilities, and any other grounds designated in commission rules. The commission shall immediately notify the defaulting state in writing of the defaulting state's suspension pending a cure of the default. The commission shall stipulate the conditions and the time period within which the defaulting state must cure its default. If the defaulting state fails to cure the default within the time period specified by the commission, the defaulting state shall be terminated from the compact and all rights, privileges and benefits conferred by this compact shall be terminated from the effective date of termination.   b.  Product approvals by the commission or product self-certifications, or any advertisement in connection with such product, that are in force on the effective date of termination shall remain in force in the defaulting state in the same manner as if the defaulting state had withdrawn voluntarily pursuant to paragraph 1 of this article.   c.  Reinstatement following termination of any compacting state requires a reenactment of the compact.   3.  Dissolution of Compact.   a.  The compact dissolves effective upon the date of the withdrawal or default of the compacting state which reduces membership in the compact to one (1) compacting state.   b.  Upon the dissolution of this compact, the compact becomes null and void and shall be of no further force or effect, and the business and affairs of the commission shall be wound up and any surplus funds shall be distributed in accordance with the bylaws.   Article XV. Severability and Construction.   1.  The provisions of this compact shall be severable; and if any phrase, clause, sentence or provision is deemed unenforceable, the remaining provisions of the compact shall be enforceable.   2.  The provisions of this compact shall be liberally construed to effectuate its purposes.   Article XVI. Binding Effect of Compact and Other Laws.   1.  Other Laws.   a.  Nothing herein prevents the enforcement of any other law of a compacting state, except as provided in paragraph b of this section.   b.  For any product approved or certified to the commission, the rules, uniform standards and any other requirements of the commission shall constitute the exclusive provisions applicable to the content, approval and certification of such products. For advertisement that is subject to the commission's authority, any rule, uniform standard or other requirement of the commission which governs the content of the advertisement shall constitute the exclusive provision that a commissioner may apply to the content of the advertisement. Notwithstanding the foregoing, no action taken by the commission shall abrogate or restrict:   i.  The access of any person to state courts;   ii.  Remedies available under state law related to breach of contract, tort, or other laws not specifically directed to the content of the product;   iii.  State law relating to the construction of insurance contracts; or   iv.  The authority of the attorney general of the state, including, but not limited to, maintaining any actions or proceedings, as authorized by law.   c.  All insurance products filed with individual states shall be subject to the laws of those states.   2.  Binding Effect of this Compact.   a.  All lawful actions of the commission, including all rules and operating procedures promulgated by the commission, are binding upon the compacting states.   b.  All agreements between the commission and the compacting states are binding in accordance with their terms.   c.  Upon the request of a party to a conflict over the meaning or interpretation of commission actions, and upon a majority vote of the compacting states, the commission may issue advisory opinions regarding the meaning or interpretation in dispute.   d.  In the event any provision of this compact exceeds the constitutional limits imposed on the legislature of any compacting state, the obligations, duties, powers or jurisdiction sought to be conferred by that provision upon the commission shall be ineffective as to that compacting state, and those obligations, duties, powers or jurisdiction shall remain in the compacting state and shall be exercised by the agency thereof to which those obligations, duties, powers or jurisdiction are delegated by law in effect at the time this compact becomes effective.  
  This chapter shall be known and may be cited as the Guaranteed Asset Protection Waiver Act of 2008.   The purpose of this chapter is to provide a framework within which guaranteed asset protection (GAP) waivers are defined and may be offered within the state. GAP waivers governed under this chapter are not insurance and are exempt from the insurance laws of this state. Persons marketing, soliciting, negotiating, selling or offering to sell GAP waivers to borrowers that comply with this chapter are exempt from this state's insurance licensing requirements. This chapter does not apply to an insurance policy offered by an insurer under the insurance laws of this state or a debt cancellation or debt suspension contract being offered in compliance in 12 CFR Part 37 or 12 CFR Part 721 or other state or federal law, including  45-2-601.   
 The following definitions are for purposes of this chapter and are not intended to provide actual terms required in GAP waivers:   Administrator means a person, other than an insurer or creditor, that performs administrative or operational functions pursuant to the GAP waiver program;   Borrower means a debtor, retail buyer or lessee under a finance agreement;   Commissioner means the commissioner of commerce and insurance;   Creditor means:  The lender in a loan or credit transaction;   The lessor in a lease transaction;   Any motor vehicle dealer as defined in  55-17-102;   The seller in commercial retail installment transactions; or   The assignees of any of subdivisions (4)(A)-(D) to whom the credit obligation is payable;     Finance agreement means a loan, lease or retail installment sales contract for the purchase of a motor vehicle;   Free look period means the period of time from the effective date of the GAP waiver until the date the borrower may cancel the contract without penalty, fees or costs to the borrower. This period of time shall not be shorter than thirty (30) days;   Guaranteed asset protection waiver or GAP waiver means a contractual agreement wherein a creditor agrees for a separate charge to cancel or waive all or part of amounts due on a borrower's finance agreement in the event of a total physical damage loss or unrecovered theft of a motor vehicle, which agreement must be part of, or a separate addendum to, the finance agreement;   Insurer means an insurance company licensed, registered, or otherwise authorized to do business under the laws of this state, including surplus lines insurers;   Motor vehicle means self propelled or towed vehicles designed for personal or commercial use, including, but not limited to, automobiles, trucks, motorcycles, recreational vehicles, all terrain vehicles, campers, boats, personal watercraft, and motorcycle, boat, camper and personal watercraft trailers;   Person includes an individual, company, association, organization, partnership, business trust, corporation, and every form of legal entity;   Related finance company means a finance company that has common ownership of fifty percent (50%) or more with the retail seller;   Retail buyer means a person who buys motor vehicles not principally for the purpose of resale; and   Retail seller means a person that is regularly engaged in the selling of motor vehicles to a retail buyer and that holds any necessary license or licenses to sell to a retail buyer.   
  GAP waivers may be offered, sold, or provided to borrowers in this state in compliance with this chapter.   GAP waivers may, at the option of the creditor, be sold for a single payment or may be offered with a monthly or periodic payment option.   Notwithstanding any other law, any cost to the borrower for a GAP waiver entered into in compliance with the Truth in Lending Act (15 U.S.C.  1601 et seq.), and its implementing regulations, must be separately stated and is not to be considered a finance charge or interest.    A retail seller shall insure its GAP waiver obligations under a contractual liability or other insurance policy issued by an insurer; provided, that:  A retail seller that does not assign the financing agreement of which the GAP waiver is a part to anyone other than the retail seller's related finance company is not required to insure its GAP waiver obligation; and   Retail sellers that are lessors of motor vehicles are not required to insure obligations related to GAP waivers on leased vehicles.     A creditor not otherwise required to insure its GAP waiver obligation pursuant to subdivision (d)(1) may insure its GAP waiver obligation under a contractual liability policy or other such policy issued by an insurer. Any such insurance policy may be directly obtained by a creditor, retail seller, or may be procured by an administrator to cover a creditor or retail seller's obligations.     The GAP waiver remains a part of the finance agreement upon the assignment, sale or transfer of such finance agreement by the creditor.   Neither the extension of credit, the term of credit, nor the term of the related motor vehicle sale or lease may be conditioned upon the purchase of a GAP waiver.   Any creditor that offers a GAP waiver must report the sale of, and forward funds received on all such waivers to the designated party, if any, as prescribed in any applicable administrative services agreement, contractual liability policy, other insurance policy or other specified program documents.   Funds received or held by a creditor or administrator and belonging to an insurer, creditor or administrator, pursuant to the terms of a written agreement must be held by such creditor or administrator in a fiduciary capacity.   
  Contractual liability or other insurance policies insuring GAP waivers must state the obligations of the insurer to reimburse or pay to the creditor any sums the creditor is legally obligated to waive under the GAP waivers issued by the creditor and purchased or held by the borrower.   Coverage under a contractual liability or other insurance policy insuring a GAP waiver must also cover any subsequent assignee upon the assignment, sale or transfer of the finance agreements.   Coverage under a contractual liability or other insurance policy insuring a GAP waiver must also remain in effect unless canceled or terminated in compliance with applicable insurance laws of this state.   The cancellation or termination of a contractual liability or other insurance policy must not reduce the insurer's responsibility for GAP waivers issued by the creditor prior to the date of cancellation or termination and for which premium has been received by the insurer.   
 GAP waivers must disclose, as applicable, in writing and in clear, understandable language that is easy to read, the following:   The name and address of the initial creditor and the borrower at the time of sale, and the identity of any administrator if different from the creditor;   The purchase price and the terms of the GAP waiver, including, without limitation, the requirements for protection, conditions, or exclusions associated with the GAP waiver;   That the borrower may cancel the GAP waiver within a free look period, as specified in the waiver, and will be entitled to a full refund of the purchase price; provided, that no claim for benefits has been made or no benefits have been paid, or in the event a claim has been made or benefits have been paid, the borrower may receive a full or partial refund if the waiver so provides;   The procedure the borrower must follow, if any, to obtain GAP waiver benefits under the terms and conditions of the waiver, including a telephone number and address where the borrower may apply for waiver benefits;   Whether or not the GAP waiver is cancelable after the free look period and the conditions under which it may be cancelled or terminated including the procedures for requesting any refund due;   That in order to receive any refund due in the event of a borrower's cancellation of the GAP waiver agreement or early termination of the finance agreement after the free look period of the GAP waiver, the borrower, in accordance with terms of the waiver, must provide a written request to cancel to the creditor, administrator or such other party, within ninety (90) days after the borrower's decision to cancel the waiver or the occurrence of the event terminating the finance agreement;   The methodology for calculating any refund of the unearned purchase price of the GAP waiver due, in the event of cancellation of the GAP waiver or early termination of the finance agreement;   That neither the extension of credit, the terms of the credit, nor the terms of the related motor vehicle sale or lease, may be conditioned upon the purchase of the GAP waiver; and   That the cost of the GAP waiver is not regulated and that the consumer has the responsibility to determine whether the cost of the GAP waiver is reasonable in relation to the protection afforded by the GAP waiver.   
  GAP waiver agreements may be cancelable or noncancelable after the free look period. GAP waivers must provide that if a borrower cancels a waiver within the free look period, the borrower will be entitled to a full refund of the purchase price; provided, that no claims have been made or no benefits have been paid, or in the event benefits have been paid or claims made, the borrower may receive a full or partial refund if the waiver so provides.   In the event of a borrower's cancellation of the GAP waiver or early termination of the finance agreement, after the agreement has been in effect beyond the free look period, the borrower may be entitled to a refund of any unearned portion of the purchase price of the waiver unless the waiver provides otherwise. In order to receive a refund, the borrower, in accordance with any applicable terms of the waiver, must provide a written request to the creditor, administrator or other party within ninety (90) days after the borrower's decision to cancel the waiver or the occurrence of the event terminating the finance agreement.   If the cancellation of a GAP waiver occurs as a result of a default under the finance agreement or the repossession of the motor vehicle associated with the finance agreement, or any other termination of the finance agreement, any refund due may be paid directly to the creditor or administrator and applied as set forth in subsection (d).   Any cancellation refund under subsections (a)-(c) may be applied by the creditor as a reduction of the amount owed under the finance agreement, unless the borrower can show that the finance agreement has been paid in full.   
  Sections 56-59-103(c), 56-59-105 and 56-59-108 are not applicable to a GAP waiver offered in connection with a lease or sale associated with a commercial transaction.   For purposes of subsection (a), commercial transaction means a transaction involving the sale or lease of a motor vehicle that is intended or will be used primarily for a purpose other than personal, family or household use.   
 The commissioner may take action that is necessary or appropriate to enforce this chapter and to protect GAP waiver holders in this state. After proper notice and opportunity for hearing the commissioner may:   Order the creditor, administrator or any other person not in compliance with this section to cease and desist from further GAP waiver related operations that are in violation of this chapter;   Impose a penalty of not more than five hundred dollars ($500) per violation and no more than ten thousand dollars ($10,000) in the aggregate for all violations of similar nature. For purposes of this section, violations must be of a similar nature if the violation consists of the same or similar course of conduct, action or practice, regardless of the number of times the action, conduct or practice that is determined to be a violation of this chapter occurred; and   Order any person found to have violated this chapter to cease and desist from selling, soliciting, or negotiating a GAP waiver in this state.   
 The general assembly finds that GAP waivers are not insurance. The general assembly also finds that GAP waivers complying with this chapter are exempt from the insurance laws of this state.  
  This part shall be known and may be cited as the Tennessee Insurance Producer Licensing Act of 2002.   This part governs the qualifications and procedures for the licensing of insurance producers. It simplifies and organizes some statutory language to improve efficiency, permits the use of new technology and reduces costs associated with issuing and renewing insurance licenses.   This part does not apply to surplus lines agents licensed pursuant to the Surplus Lines Insurance Act, compiled in chapter 14 of this title, except as provided in  56-6-108 and 56-6-118(b).   
 As used in this part, unless the context otherwise requires:   Business entity means a corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity;   Commissioner means the commissioner of commerce and insurance;   Crop insurance means insurance providing protection against damage to crops from unfavorable weather conditions, fire or lightning, flood, hail, insect infestation, disease, or other yield-reducing conditions or perils provided by the private insurance market, or that is subsidized by the Federal Crop Insurance Corporation, including multi-peril crop insurance;   Department means the department of commerce and insurance;   Home state means any state or territory of the United States and the District of Columbia in which an insurance producer maintains a principal place of residence or principal place of business and is licensed to act as an insurance producer;   Insurance means any of the lines of authority in  56-2-201;   Insurance producer means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance;   Insurer means any insurance company authorized to transact insurance business in this state;   License means a document issued by this state's commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent or inherent, in the holder to represent or commit an insurance carrier;   Limited line credit insurance includes credit life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, guaranteed automobile protection (gap) insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the commissioner determines should be designated a form of limited line credit insurance;   Limited line credit insurance producer means a person who sells, solicits or negotiates one or more forms of limited line credit insurance coverage to individuals through a master, corporate, group or individual policy;   Limited lines insurance means those lines of insurance defined in  56-6-110 or any other line of insurance that the commissioner deems necessary to recognize for the purposes of complying with  56-6-108(e);   Limited lines producer means a person authorized by the commissioner to sell, solicit or negotiate limited lines insurance;   NAIC means the National Association of Insurance Commissioners;   Negotiate means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract; provided, that the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers;   Person means an individual or a business entity;   Sell means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company;   Solicit means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company;   Surplus lines producer means a person authorized by the commissioner to sell, solicit or negotiate surplus lines insurance pursuant to the Surplus Lines Insurance Act, compiled in chapter 14 of this title. The person shall have the same authority given to a surplus lines agent licensed under the Surplus Lines Insurance Act;   Terminate means the cancellation of the relationship between an insurance producer and the insurer or the termination of a producer's authority to transact insurance;   Uniform application means the current version of the NAIC uniform application for resident and nonresident producer licensing; and   Uniform business entity application means the current version of the NAIC uniform business entity application for resident and nonresident business entities.   
 A person shall not sell, solicit or negotiate insurance in this state for any class or classes of insurance unless the person is licensed for that line of authority in accordance with this part.  
  Nothing in this part shall be construed to require an insurer to obtain an insurance producer license. In this section, the term insurer does not include an insurer's officers, directors, employees, subsidiaries or affiliates.   A license as an insurance producer shall not be required of the following:  An officer, director or employee of an insurer or of an insurance producer; provided, that the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in this state and:  The officer, director or employee's activities are executive, administrative, managerial, clerical or a combination of these, and are only indirectly related to the sale, solicitation or negotiation of insurance;   The officer, director or employee's function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance; or   The officer, director or employee is acting in the capacity of a special agent or agency supervisor assisting insurance producers where the person's activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance;     A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans, issuing certificates under plans or otherwise assisting in administering plans, or performs administrative services related to mass marketed property and casualty insurance, where no commission is paid to the person for the service;   An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director or trustees are engaged in the administration or operation of a program of employee benefits for the employer's or association's own employees or the employees of its subsidiaries or affiliates, which program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts;   Employees of insurers or organizations employed by insurers who are engaging in the inspection, rating or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance;   A person whose activities in this state are limited to advertising without the intent to solicit insurance in this state through communications in printed publications or other forms of electronic mass media whose distribution is not limited to residents of the state; provided, that the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this state;   A person who is not a resident of this state who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract; provided, that the person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state where the insured maintains its principal place of business and the contract of insurance insures risks located in that state;   A salaried full-time employee who counsels or advises an employer relative to the insurance interests of the employer or of the subsidiaries or business affiliates of the employer; provided, that the employee does not sell or solicit insurance or receive a commission;   Any regular salaried officer, employee or member of a fraternal benefit society that provides benefits in case of death or disability, resulting solely from accident, and that does not obligate the officer, employee or member to pay natural death or sick benefits, the officers, employees or members procuring other members and receiving no compensation for the procurement other than awards or merchandise nominal in value;   An officer, director, or employee of a vehicle rental company engaged in the sale, solicitation, or negotiation of optional insurance sold in connection with and incidental to a motor vehicle rental agreement for a period not to exceed ninety (90) days;  The insurance that may be offered pursuant to this subdivision (b)(9) is limited to:   Personal accident coverage that provides protection for renters and other rental vehicle occupants for accidental death or dismemberment, and for medical expenses resulting from an accident that occurs during the rental period;   Liability coverage that provides protection to renters and to other authorized drivers of the rental motor vehicle for liability arising from the operation of the motor vehicle during the rental period. The liability protection, when purchased by a renter, shall be deemed to be primary over any other coverages that may be available to the renter or other authorized driver of the rental vehicle to the extent of the protection provided;   Personal effects coverage that provides protection to renters and other motor vehicle occupants for loss of, or damage to, personal effects in the rental motor vehicle during the rental period; and   Roadside assistance coverage;     As used in subdivision (b)(9)(A), motor vehicle or rental vehicle means a private passenger motor vehicle, including passenger vans, mini vans, and sport utility vehicles, and a cargo motor vehicle, including cargo vans, pickup trucks, and trucks with a gross vehicle weight of less than twenty-six thousand pounds (26,000 lbs.);   Each person engaged in the sale of optional insurance products pursuant to this subdivision (b)(9) shall give each renter who purchases the coverage brochures or other written materials that:   Summarize, clearly and correctly, the material terms and conditions of coverage offered to renters;   Identify the insurer;   Describe the process for filing a claim in the event the renter elects to purchase coverage;   State that the purchase of the coverage is not required in order to rent a vehicle;   Disclose that the coverage offered by the rental agreement may provide a duplication of coverage already provided by a renter's personal automobile policy or by another source of coverage; and   Itemize the cost for the coverage separately;     The commissioner may seek the sanctions provided in former  56-6-112(e) [repealed] against a vehicle rental company upon a finding that an officer, director, or employee of a vehicle rental company has violated  56-6-112(a)(2), (4), (5), (7), (8), or (10) in connection with the sale, solicitation, or negotiation of optional insurance sold in connection with and incidental to a motor vehicle rental agreement for a period not to exceed ninety (90) days;     An officer, director, employee, or authorized representative of a business entity engaged in the sale, solicitation, or negotiation of portable electronics insurance licensed pursuant to and acting in compliance with part 11 of this chapter; or   An officer, director, employee or authorized representative of a business entity engaged in the sale, solicitation or negotiation of self-service storage insurance licensed pursuant to and acting in compliance with part 12 of this chapter.     
  A resident individual applying for an insurance producer license shall pass a written examination unless exempt pursuant to  56-6-109. The examination shall test the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer and the insurance laws and regulations of this state. Each individual wishing to take the state insurance examination shall first complete either an on-site or on-line preparation program approved by the commission. A person seeking an insurance producer license shall also meet the following prelicensing requirements:  All applicants for an insurance producer license, unless otherwise exempted by law, are required to register and complete either an on-line or classroom study program approved by the commissioner;   Applicants for a license shall be at least eighteen (18) years of age or older; and   All other requirements for an insurance license shall be developed and conducted under rules and regulations prescribed by the commissioner.     The commissioner may make arrangements, including contracting with an outside testing service, for administering examinations and collecting the nonrefundable examination fee.   An individual who fails to appear for the examination as scheduled or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.    An individual who fails to pass the examination on the first attempt must wait at least ten (10) calendar days before reapplying to take the examination a second time.   An individual who fails to pass the examination on the second attempt, or any subsequent attempt, must wait at least thirty (30) calendar days before reapplying to take the examination another time.     
  An individual residing in this state applying for an insurance producer license shall make application to the commissioner on the uniform application and declare under penalty of refusal, suspension or revocation of the license that the statements made in the application are true, correct and complete to the best of the individual's knowledge and belief. Before approving the application, the commissioner shall find that the individual:  Is at least eighteen (18) years of age;   Has not committed any act that is a ground for denial, suspension or revocation set forth in  56-6-112;   Has completed a prelicensing course of study for the lines of authority for which the person has applied that consists of a minimum of twenty (20) hours of coursework for life, accident and health, property, casualty, personal lines or title insurance;   Has paid the fees set forth in  56-6-121; and   Has successfully passed the examinations for the lines of authority for which the person has applied.     A business entity may obtain an insurance producer's license; however, only an individual licensed producer or limited lines producer shall sell, solicit or negotiate a contract of insurance in this state. Application shall be made using the uniform business entity application. An individual authorized and acting on behalf of the business entity shall declare under penalty of refusal, suspension or revocation of the license that the statements made in the application are true, correct and complete to the best of the individual's knowledge and belief. Before approving the application, the commissioner shall find that:  The business entity has paid the applicable fees set forth in  56-6-121; and   The business entity has designated a principal or officer who also holds a current producer license responsible for the business entity's compliance with the insurance laws, rules and regulations of this state.     The commissioner may require any documents reasonably necessary to verify the information contained in an application.   
  Unless denied licensure pursuant to  56-6-112, persons who have met the requirements of  56-6-105 and 56-6-106 shall be issued an insurance producer license. A resident insurance producer may receive a license in one (1) or more of the following lines of insurance:  Life  insurance coverage on human lives including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accident and benefits for disability income;   Accident and health or sickness  insurance coverage for sickness, bodily injury or accidental death and may include benefits for disability income;   Property  insurance coverage for the direct or consequential loss or damage to property of every kind;   Casualty  insurance coverage against legal liability, including that for death, injury or disability or damage to real or personal property;   Variable life and variable annuity products  insurance coverage provided under variable life insurance contracts and variable annuities;   Personal lines  property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes;   Credit  limited line credit insurance; and   Any other line of insurance permitted under this title or regulations promulgated under this title.      For licenses issued or renewed on or after January 1, 2007, the licenses shall remain in effect for twenty-four (24) months from the last day of the licensee's birth month.   Business entity licenses will expire biennially on March 1.     At the end of the twenty-four (24) months, the insurance producer license may be renewed, subject to the limitations set forth in  56-6-112, by paying the applicable fee set forth in  56-6-121 and submitting the renewal form prescribed by the commissioner. In addition, and subject to the exception found in  56-6-118, an insurance producer license will not be renewed unless the insurance producer has completed all continuing education requirements, as established by rule; however, the continuing education requirements shall not apply to the following:  An insurance producer who has been continuously licensed since January 1, 1994; and   An insurance producer that is a business entity.     An insurance producer who allows the license to lapse may, within twelve (12) months from the due date of the renewal fee, reinstate the same license without the necessity of passing a written examination; however, a penalty in the amount of double the unpaid renewal fee shall be required for any renewal fee received after the due date.   A licensed insurance producer who is unable to comply with the license renewal procedures of this section due to military service or some other extenuating circumstance, e.g., a long-term medical disability, may request a waiver of the license renewal procedures. The producer may also request a waiver of any examination requirement or any other sanction imposed for failure to comply with the renewal procedures.   The license shall contain the licensee's name, address, insurance producer number, and the date of issuance, the lines of authority, the expiration date and any other information the commissioner deems necessary.   A licensed insurance producer shall inform the commissioner by any means acceptable to the commissioner of a change of address within thirty (30) days of the change. Failure to timely inform the commissioner of a change in legal name or address may result in a disciplinary action pursuant to  56-6-112.   In order to assist in the performance of the commissioner's duties, the commissioner may contract with nongovernmental entities, including the NAIC or any affiliates or subsidiaries that the NAIC oversees, to perform any ministerial functions, including the collection of fees, related to producer licensing that the commissioner and the non-governmental entity may deem appropriate.   In the commissioner's discretion, the commissioner shall have the authority to waive any continuing education requirements imposed by this section.   
  Unless denied licensure pursuant to  56-6-112, a nonresident person shall receive an insurance producer license if:  The person is currently licensed as a resident insurance producer and is in good standing in the person's home state;   The person has submitted the proper request for licensure and has paid the applicable fees required by  56-6-121;   The person has submitted or transmitted to the commissioner the application for licensure that the person submitted to the person's home state, or in lieu of the same, a completed uniform application; and   The person's home state awards insurance producer licenses to residents of this state on the same basis.     The commissioner may verify the insurance producer's licensing status through any producer database maintained by the NAIC, its affiliates or subsidiaries.   A nonresident insurance producer who moves from one state to another state or a resident insurance producer who moves from this state to another state shall file a change of address and provide certification from the new resident state within thirty (30) days of the change of legal residence. No fee or license application is required.   Notwithstanding any other provision of this part, a person licensed as a surplus lines producer in the person's home state shall receive a surplus lines producer license in this state pursuant to subsection (a). Except as provided in subsection (a), nothing in this section otherwise amends or supersedes the Surplus Lines Insurance Act, compiled in chapter 14 of this title.   Notwithstanding any other provision of this part, a person licensed as a limited line credit insurance producer or any other type of limited lines insurance producer in the person's home state shall receive a nonresident limited lines producer license, pursuant to subsection (a), as long as the license is granted to residents of this state. The license shall grant the nonresident the same scope of authority as granted a resident insurance producer holding the license in this state.   
  An individual who applies for an insurance producer license in this state who was previously licensed for the same lines of authority in another state shall not be required to complete any prelicensing education or examination. This exemption is only available if the person is currently licensed in that state or if the application is received within ninety (90) days of the cancellation of the applicant's previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the state's producer database records, maintained by the NAIC, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested.   A person licensed as an insurance producer in another state who moves to this state shall make application within ninety (90) days of establishing legal residence to become a resident licensee pursuant to  56-6-106. No prelicensing education or examination shall be required of that person to obtain any line of authority previously held in the prior state except where the commissioner determines otherwise by regulation.   
 An individual who has met the requirements of  56-6-106 shall be entitled to a limited lines producer license without examination in one (1) or more of the following limited lines:   Travel insurance;   Credit life, credit accident and health insurance, or involuntary unemployment credit insurance;   Mortgage guaranty insurance;   Personal property insurance sold to a debtor under a master group policy issued to a creditor;   Crop insurance;   Title insurance; provided, that the limited lines producer is an attorney, duly licensed in this state, who acts as a title insurance agent as an ancillary part of the attorney's practice of law;   Any other lines that the commissioner finds by rule are essential for the transaction of business in this state and do not require the professional competency demanded by an insurance producer's license;   Portable electronics insurance; or   Self-service storage insurance.   
  The commissioner may issue a temporary insurance producer license for a period not to exceed one hundred eighty (180) days without requiring an examination if the commissioner deems that the temporary license is necessary for the servicing of an insurance business in the following cases:  To the surviving spouse or court-appointed personal representative of a licensed insurance producer who dies or becomes mentally or physically disabled to allow adequate time for the sale of the insurance business owned by the producer or for the recovery or return of the producer to the business or to provide for the training and licensing of new personnel to operate the producer's business;   To a member or employee of a business entity licensed as an insurance producer, upon the death or disability of an individual designated in the business entity application or the license;   To the designee of a licensed insurance producer entering active service in the armed forces of the United States; or   In any other circumstance where the commissioner deems that the public interest will best be served by the issuance of this license.     The commissioner may by order limit the authority of any temporary licensee in any way deemed necessary to protect insureds and the public. The commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts of the temporary licensee and may impose other similar requirements designed to protect insureds and the public. A temporary license issued under this part may also be suspended or revoked pursuant to  56-6-112. A temporary license may not continue after the owner or the personal representative disposes of the business.   
  The commissioner may place on probation, suspend, revoke or refuse to issue or renew a license issued under this part or may levy a civil penalty in accordance with this section or take any combination of those actions, for any one (1) or more of the following causes:  Providing incorrect, misleading, incomplete or materially untrue information in the license application;   Violating any law, rule, regulation, subpoena or order of the commissioner or of another state's commissioner;   Obtaining or attempting to obtain a license through misrepresentation or fraud;   Improperly withholding, misappropriating or converting any moneys or properties received in the course of doing insurance business;   Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;   Having been convicted of a felony;   Having admitted or been found to have committed any insurance unfair trade practice or fraud;   Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere;   Having an insurance producer license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory;   Forging another's name to an application for insurance or to any document related to an insurance transaction;   Improperly using notes or any other reference material to complete an examination for an insurance license;   Knowingly directing any person to submit an application for health care benefits through the TennCare program at a time when the person is covered by a group policy or when the policy is being renewed, and then quoting a rate for a group health insurance policy if the insurance producer knows the person would otherwise have been eligible to participate or continue participation in the group policy;   Knowingly accepting insurance business from an individual who is not licensed;   Selling, soliciting or negotiating insurance for a company that is not authorized to transact the business of insurance in this state; and   Violating the unfair trade practices as enumerated in  56-6-125.     Any action by the commissioner to put on probation, suspend, revoke or deny the renewal of a license pursuant to this section shall be governed by the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   In the event that the action by the commissioner is to deny an application for a license, the commissioner shall notify the applicant and advise, in writing, the applicant of the denial of the applicant's application within thirty (30) days.   The license of a business entity may be suspended or revoked if the commissioner finds, after a hearing, that an individual licensee's violation was known or should have been known by one (1) or more of the partners, officers or managers acting on behalf of the partnership or corporation and the violation was neither reported to the commissioner nor corrective action taken.   The commissioner shall retain the authority to enforce this part and impose any penalty or remedy authorized by this part and this title against any person who is under investigation for or charged with a violation of this part or this title, even if the person's license has been surrendered or has lapsed by operation of law.   The commissioner may serve a notice or order in any action arising under this part by registered or certified mail to the insurance producer or applicant at the address of record in the files of the department. Notwithstanding any law to the contrary, service in the manner set forth in this subsection (f) shall be deemed to constitute actual service on the insurance producer or applicant.   If, after providing notice consistent with the process established by  4-5-320(c), and providing the opportunity for a contested case hearing held in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, the commissioner finds that any person required to be licensed, permitted, or authorized by the division of insurance pursuant to this chapter has violated any statute, rule or order, the commissioner may, at the commissioner's discretion, order:  The person to cease and desist from engaging in the act or practice giving rise to the violation;   Payment of a monetary penalty of not more than one thousand dollars ($1,000) for each violation, but not to exceed an aggregate penalty of one hundred thousand dollars ($100,000). This subdivision (g)(2) shall not apply where a statute or rule specifically provides for other civil penalties for the violation. For purposes of this subdivision (g)(2), each day of continued violation shall constitute a separate violation; and   The suspension or revocation of the person's license.     In determining the amount of penalty to assess under this section, the commissioner shall consider:  Whether the person could reasonably have interpreted such person's actions to be in compliance with the obligations required by a statute, rule or order;   Whether the amount imposed will be a substantial economic deterrent to the violator;   The circumstances leading to the violation;   The severity of the violation and the risk of harm to the public;   The economic benefits gained by the violator as a result of noncompliance;   The interest of the public; and   The person's efforts to cure the violation.     
  An insurer or insurance producer shall not pay a commission, service fee, brokerage fee or other valuable consideration to a person for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under this part and is not so licensed.   A person shall not accept a commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating insurance in this state if that person is required to be licensed under this part and is not so licensed.   Renewal or other deferred commissions may be paid to a person for selling, soliciting or negotiating insurance in this state if the person was required to be licensed under this part at the time of the sale, solicitation or negotiation and was so licensed at that time.   An insurer or insurance producer may pay or assign commissions, service fees, brokerages or other valuable consideration to an insurance agency or to persons who do not sell, solicit or negotiate insurance in this state, unless the payment would violate  56-8-104(5) or (8).   An unlicensed person may make a referral to a licensed insurance producer if the person does not discuss the specific insurance policy terms and conditions. Except as prohibited by federal law, the unlicensed person may be compensated for the referral. However, an unlicensed person who is neither employed by nor affiliated with the licensed insurance producer may be compensated only if the compensation is a fixed dollar amount, not to exceed twenty-five dollars ($25.00) or such lesser amount as the commissioner may establish by rule, for each referral. In either event, the referral compensation must not depend on whether the referred customer purchases an insurance product from the licensed insurance producer.   
  A person shall be personally liable for any premiums paid for, or valid claims made on, all contracts of insurance unlawfully sold within this state by or through the person directly or indirectly, for or on behalf of an insurance company not authorized to do business in this state.   A person who sells insurance in this state for an insurance company not authorized to do business in this state commits a fraudulent insurance act as defined by  56-53-102.   
  An insurance producer shall not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer. An insurance producer who is not acting as an agent of an insurer is not required to become appointed.   An insurance producer who solicits or negotiates an application for insurance shall be regarded, in any controversy arising from the application for insurance or any policy issued in connection with the application between the insured or insured's beneficiary and the insurer, as the agent of the insurer and not the insured or insured's beneficiary. This subsection (b) shall not affect the apparent authority of an agent.   To appoint a producer as its agent, the appointing insurer shall file, in a format approved by the commissioner, a notice of appointment within fifteen (15) days from the date the agency contract is executed or the first insurance application is submitted. An insurer may also elect to appoint a producer to all or some insurers within the insurer's holding company system or group by the filing of a single appointment request.   Upon receipt of the notice of appointment, the commissioner shall verify within a reasonable time, not to exceed thirty (30) days, that the insurance producer is eligible for appointment. If the insurance producer is determined to be ineligible for appointment, the commissioner shall notify the insurer within five (5) days of the determination.   An insurer shall pay an appointment fee, in the amount set in  56-6-121, for each insurance producer appointed by the insurer. The fees under this section may be paid by the insurer on a quarterly basis.   Any insurance producer may place excess or rejected risks with an insurer lawfully doing business within this state, and shall not be required to enter into an agency contract or agreement with the insurer accepting such excess or rejected risks or be appointed by such insurer; provided, that only that portion of the risk in excess of the limits which the insurer will write may be placed as an excess risk, and:  The insurance producer has an agency contract or agreement with an insurer that actually engages in the writing of the insurance; and   The insurer has deemed the risk to be in excess of, or in noncompliance with, its underwriting standards.     No insurance producer may place an application for insurance with any residual market mechanism, as defined by  56-5-102, unless the insurance producer:  Has an agency contract or agreement with an insurer that actually engages in the writing of the insurance; and   Makes a diligent effort to place the application for insurance with the insurer.     It is unlawful for any insurer to accept applications from, or pay commissions to, an insurance producer or limited lines producer except in accordance with this section. Any insurer who unlawfully accepts applications from, or pays commissions to, any insurance producer shall be deemed to have accepted and acknowledged the person as its insurance producer or limited lines producer.   An individual not duly licensed as an insurance producer or limited lines producer who solicits a policy of insurance on behalf of an insurer shall become liable for all the duties, requirements, liabilities and penalties to which an insurance producer of the insurer is subject.   
 Any money that an insurance producer receives for soliciting, negotiating or selling insurance shall be held in a fiduciary capacity, and shall not be misappropriated, converted or improperly withheld. Any violation of this section shall be considered grounds for the denial, suspension, or revocation of the insurance producer's license and shall subject the insurance producer to the sanctions and penalties set forth under  56-6-112.  
  Termination for Cause.  An insurer or authorized representative of the insurer that terminates the appointment, employment, contract or other insurance business relationship with a producer shall notify the commissioner within thirty (30) days following the effective date of the termination, using a format prescribed by the commissioner, if the reason for termination is one of the reasons set forth in  56-6-112 or the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities described in  56-6-112. Upon the written request of the commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination or activity of the producer.   Termination Without Cause.  An insurer or authorized representative of the insurer that terminates the appointment, employment, or contract with a producer for any reason not set forth in  56-6-112 shall notify the commissioner within thirty (30) days following the effective date of the termination, using a format prescribed by the commissioner. Upon written request of the commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination.   Termination of Appointment Fee.  An insurer shall pay a termination of appointment fee, in the amount set forth in  56-6-121, for each insurance producer appointment terminated by the insurer.   Ongoing Notification Requirement.  The insurer or the authorized representative of the insurer shall promptly notify the commissioner in a format acceptable to the commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the commissioner in accordance with subsection (a) had the insurer known of its existence at the time the insurer initially notified the commissioner.   Copy of Notification to be Provided to Producer.  Within fifteen (15) days after making the notification required by subsections (a), (b) and (d), the insurer shall mail a copy of the notification to the producer at the producer's last known address. If the producer is terminated for cause for any of the reasons listed in  56-6-112, the insurer shall provide a copy of the notification to the producer at the producer's last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier.   Within thirty (30) days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the commissioner. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments shall become a part of the commissioner's file and accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subsection (g).     Immunities.  In the absence of actual malice, an insurer, the authorized representative of the insurer, a producer, the commissioner, or an organization of which the commissioner is a member and that compiles the information and makes it available to other commissioners or regulatory or law enforcement agencies shall not be subject to civil liability, and a civil cause of action of any nature shall not arise against these entities or their respective agents or employees, as a result of any statement or information required by or provided pursuant to this section or any information relating to any statement that may be requested in writing by the commissioner from an insurer or producer; or a statement by a terminating insurer or producer to an insurer or producer limited solely and exclusively to whether a termination for cause under subsection (a) was reported to the commissioner; provided, that the propriety of any termination for cause under subsection (a) is certified in writing by an officer or authorized representative of the insurer or producer terminating the relationship.   In any action brought against a person that may have immunity under subdivision (f)(1) for making any statement required by this section or providing any information relating to any statement that may be requested by the commissioner, the party bringing the action shall plead specifically in any allegation that subdivision (f)(1) does not apply because the person making the statement or providing the information did so with actual malice.   Subdivision (f)(1) or (f)(2) shall not abrogate or modify any existing statutory or common law privileges or immunities.     Confidentiality.   All testimony, documents, other information in the control or possession of the department that is obtained by the commissioner in an investigation pursuant to this section shall, except as provided in subdivision (g)(1)(B), be confidential and absolutely privileged and shall not be:   Subject to  10-7-503(a) or  56-1-602;   Subject to subpoena;   Subject to discovery; or   Admissible as evidence in any private civil action.     Notwithstanding subdivision (g)(1)(A), the commissioner is authorized to use the testimony, documents, and other information in the control or possession of the department in the furtherance of any regulatory or legal action brought as a part of the commissioner's duties.     Neither the commissioner nor any person who received documents, materials or other information while acting under the authority of the commissioner shall be permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subdivision (g)(1).   In order to assist in the performance of the commissioner's duties under this part, the commissioner may:  Share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subdivision (g)(1), with other state, federal, and international regulatory agencies, with the NAIC, its affiliates or subsidiaries, and with state, federal, and international law enforcement authorities; provided, that the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information;   Receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC, its affiliates or subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and   Enter into agreements governing sharing and use of information consistent with this subsection (g).     No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information shall occur as a result of disclosure to the commissioner under this section or as a result of sharing as authorized in subdivision (g)(3).   Nothing in this part shall prohibit the commissioner from releasing final, adjudicated actions including for cause terminations that are open to public inspection pursuant to  10-7-503(a) to a database or other clearinghouse service maintained by the NAIC, its affiliates or subsidiaries.     Penalties for Failing to Report.  An insurer or the authorized representative of the insurer, or a producer that fails to report as required under this section or that is found to have falsely reported with actual malice by a court of competent jurisdiction may, after notice and hearing, have its license or certificate of authority suspended or revoked. In addition to or in lieu of the suspension or revocation of a license or certificate of authority, the commissioner may subject violators of this part to a civil penalty in an amount not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) for each violation.   
  The commissioner shall waive any requirements for a nonresident license applicant with a valid license from the applicant's home state, except the requirements imposed by  56-6-108, if the applicant's home state awards nonresident licenses to residents of this state on the same basis. Notwithstanding any other provision of this part, after a public hearing the commissioner may waive any of the limitations or requirements imposed by  56-6-108 if the applicant's home state awards nonresident licenses to residents of this state on the same basis. However, nothing contained in this subsection (a) shall prevent the commissioner from denying, suspending or revoking a license issued under this part pursuant to  56-6-112.   A nonresident producer's satisfaction of the producer's home state's continuing education requirements for licensed insurance producers shall constitute satisfaction of this state's continuing education requirements if the nonresident producer's home state recognizes the satisfaction of its continuing education requirements imposed upon producers from this state on the same basis.   
  A producer shall report to the commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in this state within thirty (30) days of the final disposition of the matter. This report shall include a copy of any order entered or other relevant legal documents.   Within thirty (30) days of the initial pretrial hearing date, a producer shall report to the commissioner any criminal prosecution of the producer taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.   
  The commissioner may make investigations necessary for the proper administration of this part. For the purpose of making the investigations, the commissioner shall have inquisitorial powers and shall be empowered to subpoena witnesses and examine them under oath; provided that:  Any investigatory action be reasonable in scope and relevant to the administration of this part;   In the course of an investigation conducted pursuant to this section, the commissioner shall be given access to all business records of a person licensed or required to be licensed under this part. The department shall endeavor to conduct its investigation in a manner that is least obtrusive to the ongoing business of the person; and    All testimony, documents, other information in the control or possession of the commissioner that is obtained in an investigation pursuant to this section shall, except as provided in subdivision (a)(3)(B), be confidential and absolutely privileged and shall not be:   Subject to  10-7-503(a) or  56-1-602;   Subject to subpoena;   Subject to discovery; or   Admissible as evidence in any private civil action;       The commissioner is authorized to use the testimony, documents, and other information in the control or possession of the department in the furtherance of any regulatory or legal action brought as a part of the commissioner's duties;   Subject to subsection (b), a person being investigated pursuant to this section, or counsel for such person, may obtain from the commissioner a copy of each and any inquisitorial order and complaint filed against the person. Further, upon initiation of a formal proceeding against any person, the 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.          Upon issuance by the commissioner of an inquisitorial order or upon receipt by the department of a written complaint against a person, the department shall provide the person with a copy of the inquisitorial order or complaint within thirty (30) days of issuance of the order or receipt of the complaint.   Before seeking a statement from a person being investigated, the department shall notify the person that any statement may be used in an investigation or become evidence in a hearing. Failure of the department to comply with subdivision (b)(1) shall render any statement provided to the department prior to its compliance with subdivision (b)(1) inadmissible in any administrative actions against such person. However, failure to comply with subdivision (b)(1) shall not prevent the department from proceeding with any actions arising from such order or complaint. Further, nothing in this section shall prevent the department from taking a statement from a person being investigated prior to giving the notice required by subdivision (b)(1) as long as it is taken within thirty (30) days of the receipt of the complaint or the entry of the inquisitorial order.     Upon receiving notice under subdivision (b)(1), the person being investigated may obtain a copy of any written, formal or recorded statements made by such person. The department shall produce such information requested pursuant to this subsection (c) within thirty (30) days of the request.   In the course of an investigation conducted pursuant to this section, the commissioner shall have the right to take under oath the testimony of any person involved in the business of insurance. Such person shall be given no less than fourteen (14) days' written notice of the commissioner's intent to take testimony and the place where the testimony will be taken. Upon good cause shown, and in the commissioner's sole discretion, the commissioner may provide additional time to the requester.   If the commissioner requests a person to produce records, originals or copies, in conjunction with an investigation conducted pursuant to this section, and the person from whom the documents have been requested believes the request is overbroad and will not lead to the discovery of facts relevant to the commissioner's investigation, that person may seek review of the commissioner's request by application to an administrative judge, including seeking entry of a protective order. The cost of document production pursuant to this section shall be borne by the person from whom the documents are sought; provided, however, that all other costs of investigation shall be borne by the department.   No later than thirty (30) days after completion of an investigation, or closure of a complaint file, the commissioner shall provide notice of such completion or closure to the person being investigated or against whom the complaint was filed.   In the commissioner's annual report made pursuant to  56-1-601, the department shall identify the total number of open investigations, the number of investigations opened in the year covered by the report, and the number of investigations closed in the year covered by the report.   Any investigation initiated under this part shall be completed within two (2) years of receiving a complaint, or the entry of an inquisitorial order, whichever comes first. The filing of an action under subsection (e) shall toll this limitation until such time as there is a final order issued pursuant to the Uniform Administrative Procedures Act and there is no judicial order staying the effectiveness of the final order. All actions shall be commenced within five (5) years of the date that the commissioner knew or reasonably should have known of the cause of action. Nothing in this subsection (h) shall prevent the department from taking action based upon an order previously entered by another state or the federal government or a felony conviction, regardless of the date of such order or conviction. Any investigation initiated prior to July 1, 2011, shall be completed or closed, or a contested case action shall be filed as of July 1, 2013.   Any notices required by the department pursuant to this section may be transmitted electronically.   
 In addition to any other fees that may be required elsewhere in this title, the following are the nonrefundable fees that will be paid to the commissioner under this part:   Except as provided in subdivision (5), fifty dollars ($50.00) for the filing of an application for an insurance producer license or limited lines producer license;   Sixty dollars ($60.00) for the renewal of an insurance producer license;   Thirty dollars ($30.00) for the renewal of a limited lines producer license;   Fifteen dollars ($15.00) for the appointment or termination of appointment of an insurance producer or limited lines producer by an insurer; and   Seven hundred fifty dollars ($750) for the filing of an initial application or renewal application as a travel insurance supervising entity pursuant to the Travel Insurance Producer Limited License Act, compiled in part 14 of this chapter.   
 Notwithstanding any other law to the contrary, there shall be no requirement that an insurance producer who is a resident of this state must countersign a policy of insurance written by an insurance company.  
 An insurance producer doing business under any name other than the producer's legal name is required to notify the commissioner prior to using the assumed name.  
  The commissioner may, in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, promulgate reasonable regulations as are necessary or proper to carry out the purposes of this part.   The commissioner shall have the authority to promulgate any emergency rules necessary to implement this part; provided, that permanent rules shall be implemented pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   The commissioner shall promulgate continuing education requirements for individuals licensed under this part in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
  It is an unfair trade practice for an insurance producer to:  Hold the insurance producer out, directly or indirectly, to the public as a financial planner, investment adviser, consultant, financial counselor, risk manager or any other specialist engaged in the business of giving financial planning, risk management or advice relating to investments, insurance, real estate, tax matters or trust and estate matters when the person is in fact engaged only in the sale of insurance policies. This subdivision (a)(1) does not preclude persons who hold some form of formal recognized financial planning, risk management or consultant certification or designation from using this certification or designation when they are only selling insurance;   Engage in the business of financial planning without disclosing to the client prior to the execution of the agreement provided for in subdivision (a)(3), or solicitation of the sale of a product or service, that:  The person is also an insurance salesperson; and   That a commission for the sale of an insurance product will be received in addition to a fee for financial planning, if such is the case. The disclosure requirement under this subsection (a) may be met by including it in any disclosure required by federal or state securities law; or     Charge fees for the sale, solicitation or negotiation of insurance not authorized by a written agreement with an insurer, and, where applicable, incorporated in the insurer's rate filing. An insurance producer may charge fees for services not connected with the sale, solicitation and negotiation of insurance by the insurance producer if the fees are based upon a qualified written agreement, signed by the party to be charged in advance of the performance of the services under the agreement. A copy of the qualifying agreement must be provided to the party to be charged at the time the agreement is signed by the party. The agreement shall be considered as qualifying if it includes:  The services for which the fee is to be charged;   The amount of the fee to be charged or how it will be determined or calculated; and   A disclosure stating that the client is under no obligation to purchase any insurance product through the insurance producer or consultant. The insurance producer shall retain a copy of the agreement for not less than three (3) years after completion of services, and a copy shall be available to the commissioner upon request.       Notwithstanding subsection (a) or this title, an insurance producer may charge fees for services relating to an individual's purchase of an individual major medical policy as defined in  56-12-204(c)(3)(C) [See Compiler's Note], where the insurer is not paying commission to the insurance producer, if the fees are based upon a qualified written agreement signed by the party to be charged in advance of the performance of the services under the agreement. An agreement under this subsection (b) is qualified if it meets the requirements contained in subdivisions (a)(3)(A)-(C).   Except as otherwise provided in subsections (a) and (b), this section does not permit persons to charge an additional fee for services that are associated with the sale, solicitation, negotiation, or servicing of insurance policies.   
 If any provisions of this part or the application of a provision to any person or circumstances is held invalid, the remainder of the part, and the application of the provision to persons or circumstances other than those to which it is held invalid, shall not be affected.  
 As used in this part:   Commissioner means the commissioner of commerce and insurance;   Crop means and includes any agricultural product, including livestock, nursery product, tree and product from a tree, as well as anything insured by the Federal Crop Insurance Corporation under a crop insurance program;   Department means the department of commerce and insurance;   Fingerprints means an impression of the lines on the finger taken for purpose of identification. The impression may be electronic or in ink converted to electronic format; and   Person means a natural person.   
  No person shall act or hold out as being a crop insurance adjuster unless licensed as a crop insurance adjuster in accordance with this part.   An insurer that sells crop insurance shall not contract, employ or use any person to adjust claims made under a crop insurance policy unless the person is licensed as a crop insurance adjuster.   
   A person applying for a crop insurance adjuster license shall make application to the commissioner on the appropriate application prescribed by the commissioner.   The commissioner is authorized to determine whether the crop insurance adjuster license to be issued under this part shall be a crop-specific loss adjuster license or a multi-peril crop adjuster license, and based on the commissioner's decision, the applicant shall complete the appropriate application.     The applicant shall declare, under penalty of perjury and under penalty of refusal, suspension or revocation of the license, that the statements made in the application are true, correct and complete to the best of the applicant's knowledge and belief.   
 The commissioner shall promulgate rules to establish the qualifications for the issuance of a license under this part. Such standards shall include the completion of a course of instruction in adjusting crop insurance claims and the passing of an examination testing the applicant's knowledge of how to adjust crop insurance claims.  
  An individual applying for a crop insurance adjuster license under this part shall pass a written examination. The examination shall test the knowledge of the individual concerning the duties and responsibilities of a limited lines crop adjuster and the insurance laws and regulations of this state. Examinations required by this section shall be developed and conducted under rules and regulations prescribed by the commissioner. Based on the commissioner's decision concerning whether the license shall be a crop-specific loss adjuster license or a multi-peril crop adjuster license, the examination shall specifically cover the applicable license. If the license is to be a multi-peril crop adjuster license, the commissioner may accept the risk management agency-approved proficiency test as the basis for such licensure.   The commissioner may make arrangements, including contracting with an outside testing service, for administering examinations and collecting a nonrefundable fee in an amount set forth by rule by the commissioner.   Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the commissioner, in an amount set by rule promulgated by the commissioner.   An individual who fails to appear for the examination as scheduled, or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.   The commissioner is authorized to establish continuing education requirements, including a minimum number of required hours as well as appropriate curriculum, for persons licensed as crop insurance adjusters under this part.   
 All insurers that sell crop insurance in this state shall maintain complete records of each claim made by a policyholder or on property in this state. These records shall be maintained for at least five (5) years after the termination of the closing of the claim and shall be open to examination by the commissioner at all times.  
 A crop insurance adjuster shall not undertake the adjustment of any claim, if the crop insurance adjuster is not sufficiently competent and knowledgeable as to the terms and conditions of the insurance coverage so as to properly discharge the duties of a crop insurance adjuster, or that otherwise exceeds the crop insurance adjuster's current expertise.  
 The commissioner may make investigations necessary for the proper administration of this part. For the purpose of making investigations, the commissioner shall have inquisitorial powers and shall be empowered to subpoena witnesses and examine them under oath.  
 The commissioner may promulgate regulations as are necessary or proper to carry out the purposes of this part. These regulations may include provisions relating to the assessment of licensure fees reasonable to defray the costs of examinations and testing of crop insurance adjusters. The commissioner may also set standards for the maintenance of a crop insurance adjuster license. The commissioner shall keep a separate accounting of fees and costs to administer this part, and no other fees generated under this chapter shall be used to administer this part.  
 For purposes of this part:   Commissioner means the commissioner of commerce and insurance;   Customer means a person who purchases portable electronics or services;   Department means the department of commerce and insurance;   Enrolled customer means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics;   Location means any physical location in this state or any web site, call center site, or similar location directed to residents of this state;   Portable electronics means electronic devices that are portable in nature, the devices' accessories, and services related to the use of the devices;    Portable electronics insurance means insurance providing coverage for the repair or replacement of portable electronics which may provide coverage for portable electronics against any one (1) or more of the following causes of loss:   Loss;   Theft;   Inoperability due to mechanical failure;   Inoperability due to malfunction;   Damage; or   Other similar causes of loss.     Portable electronics insurance does not include:   A service contract or extended warranty providing coverage limited to the repair, replacement, or maintenance of property for the operational or structural failure of property due to a defect in materials, workmanship, accidental damage from handling, power surges, or normal wear and tear;   A policy of insurance covering a seller's or a manufacturer's obligations under a warranty; or   A homeowner's, renter's, private passenger automobile, commercial multi-peril, or similar policy;       Portable electronics transaction means:  The sale or lease of portable electronics by a vendor to a customer; or   The sale of a service related to the use of portable electronics by a vendor to a customer;     Supervising entity means a business entity that is a licensed insurance producer or insurer; and   Vendor means a person in the business of engaging in portable electronics transactions directly or indirectly.   
  A vendor is required to hold a limited lines license to sell or offer coverage under a policy of portable electronics insurance. A vendor who has met the requirements of this part shall be entitled to a limited lines business entity producer's license, without examination, authorizing the vendor to sell or offer coverage under a policy of portable electronics insurance.   A limited lines license issued to a vendor under this section shall authorize any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location at which the vendor engages in portable electronics transactions.   In connection with a vendor's initial application for licensure and at renewal, the vendor shall provide a list to the commissioner of all locations in this state at which the vendor offers coverage.   Notwithstanding any law to the contrary, a license issued pursuant to this section shall authorize the licensee and its employees or authorized representatives to engage in activities permitted in this part.   
  At every location where portable electronics insurance is offered to customers, brochures or other written materials shall be made available to a prospective customer that:  Disclose that portable electronics insurance may provide a duplication of coverage already provided by a customer's homeowner's insurance policy, renter's insurance policy, or other source of coverage;   State that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services;   Summarize the material terms of the insurance coverage, including:  The identity of the insurer;   The identity of the supervising entity;   The amount of any applicable deductible and how it is to be paid;   Benefits of the coverage; and   Key terms and conditions of coverage such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or nonoriginal manufacturer parts or equipment;     Summarize the process for filing a claim, including a description of how to return portable electronics and the maximum fee applicable in the event the enrolled customer fails to comply with any equipment return requirements; and   State that the enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and the person paying the premium shall receive a refund of any applicable unearned premium.     Notwithstanding any law to the contrary, portable electronics insurance may be offered on a month-to-month or other periodic basis as a group or master commercial inland marine policy issued to a vendor of portable electronics for its enrolled customers.   Eligibility and underwriting standards for customers electing to enroll in coverage shall be established for each portable electronics insurance program.   
  Notwithstanding any law to the contrary, the employees and authorized representatives of vendors may sell or offer portable electronics insurance to customers and shall not be subject to licensure as an insurance producer under this part; provided, that:  The vendor obtains a limited lines license to authorize its employees or authorized representatives to sell or offer portable electronics insurance pursuant to  56-6-1102;   The insurer issuing the portable electronics insurance either directly supervises or appoints a supervising entity to supervise the administration of the program, including development of a training program for employees and authorized representatives of the vendors. The training required by this subdivision (a)(2) shall comply with the following:  The training shall be delivered to employees and authorized representatives of a vendor who are directly engaged in the activity of selling or offering portable electronics insurance;   The training may be provided in electronic form. If the training is conducted in an electronic form the supervising entity shall implement a supplemental education program regarding portable electronics insurance that is conducted and overseen by licensed employees of the supervising entity; and   Each employee and authorized representative shall receive basic instruction concerning the portable electronics insurance offered to customers and the disclosures required under  56-6-1103;     No employee or authorized representative of a vendor of portable electronics shall advertise, represent, or otherwise hold himself or herself out as a non limited lines licensed insurance producer; and   No employee or authorized representative of a vendor shall be compensated based primarily on the number of customers enrolled for portable electronics insurance coverage; provided, however, that the employee or authorized representative may receive compensation for activities under the limited lines license which is incidental to his or her overall compensation.      The charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. Any charge to the customer for coverage that is not included in the cost associated with the purchase or lease of portable electronics or related services shall be separately itemized on the enrolled customer's bill. If the portable electronics insurance coverage is included with the purchase or lease of portable electronics or related services the vendor shall clearly and conspicuously disclose to the enrolled customer that the coverage is included with the purchase or lease of the portable electronics or related services.   Vendors billing and collecting such charges shall not be required to maintain such funds in a segregated account; provided, that the vendor is authorized by the insurer to hold such funds in a nonsegregated account and remits such amounts to the supervising entity within sixty (60) days of receipt.   All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer.   Vendors may receive compensation for billing and collection services.     
 If a vendor of portable electronics or its employee or authorized representative violates this part, the commissioner is authorized to:   After notice and hearing, impose on a person's license pursuant to this part civil penalties not to exceed five hundred dollars ($500) per violation and five thousand dollars ($5,000) in the aggregate for such conduct; and   After notice and hearing, impose on a person's license pursuant to this part other penalties that the commissioner deems necessary and reasonable to carry out the purpose of this part, including:  Suspending the privilege of transacting portable electronics insurance pursuant to this part at specific business locations where violations have occurred; and   Suspending or revoking the ability of individual employees or authorized representatives to act under a license issued pursuant to  56-6-1102.     
 Notwithstanding any other law to the contrary:   An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least thirty (30) days' notice;   If the insurer changes the terms and conditions, then the insurer shall provide the vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a summary of material changes;   Notwithstanding subdivision (1):  An insurer may terminate an enrolled customer's enrollment under a portable electronics insurance policy upon fifteen (15) days' notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim thereunder; and   An insurer may immediately terminate an enrolled customer's enrollment under a portable electronics insurance policy:   For nonpayment of premium;   If the enrolled customer ceases to have active service with the vendor of portable electronics; or   If an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within thirty (30) calendar days after exhaustion of the limit. However, if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer;       If a portable electronics insurance policy is terminated by a policyholder, then the policyholder shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled customer at least thirty (30) days prior to the termination; and    Whenever notice by an insurer is required pursuant to this section, the notice shall be in writing and may be mailed or delivered to the vendor of portable electronics at the vendor's mailing address and to its affected enrolled customers' last known mailing addresses on file with the insurer;   If notice is mailed pursuant to this section, then the insurer or vendor of portable electronics, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States postal service or other commercial mail delivery service;   An insurer or vendor policyholder may comply with any notice required by this section by providing electronic notice to a vendor or its affected enrolled customers, as the case may be, by electronic means. If notice is accomplished through electronic means the insurer or vendor of portable electronics, as the case may be, shall maintain proof that the notice was sent.     
  A sworn application for a license under this part shall be made to and filed with the commissioner on forms prescribed and furnished by the department.   The application shall:  Provide the name, residence address, and other information required by the department for an individual that is designated by the applicant as the individual responsible for the vendor's compliance with the requirements of this part. Notwithstanding any other law, the individual required to be designated by the vendor pursuant to this section and  56-6-106(b)(2) shall not be required to be a principal, officer or employee of the vendor but shall be a principal, officer or employee of the supervising entity who holds a current producer license in this state; and   Provide the location of the applicant's home office.     Initial licenses issued pursuant to this part shall be valid for a period of twenty-four (24) months and expire biennially on March 1 of the renewal year assigned by the commissioner.    Except as provided in subdivision (d)(2), each vendor of portable electronics licensed under this part shall pay to the commissioner a fee as prescribed by the commissioner, but in no event shall the fee exceed one thousand dollars ($1,000) for an initial portable electronics limited lines license and five hundred dollars ($500) for each renewal thereof.   The fee prescribed for a vendor that is engaged in portable electronics transactions at ten (10) or fewer locations in this state shall not exceed one hundred dollars ($100) for an initial license and for each renewal thereof.     
 For purposes of this part:   Commissioner means the commissioner of commerce and insurance or the commissioner's designee;   Covered personal property means personal property covered under an occupant's self-service storage insurance policy;   Department means the department of commerce and insurance;   Enrolled occupant means an occupant who elects coverage under a self-service storage insurance policy issued to an owner;   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;   Location means any physical location in this state or any web site, or similar location directed to residents of this state;   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;   Owner means:  The owner, operator, lessor or sublessor of a self-service storage facility, the agent of such person; or   Any person authorized by such person to manage the facility or to receive rent from an occupant under a rental agreement;     Personal property means movable property not affixed to land and includes, but is not limited to, goods, wares, merchandise, household items and vehicles;   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;   Self-service storage facility:  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   Does not include any part of the real property used for residential purposes;     Self-service storage insurance:  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:   Loss;   Theft;   Damage; or   Other similar causes of loss; and     Does not include a homeowner's, renter's, private passenger automobile, commercial multi-peril or similar policy;     Self-service storage transaction means the lease of self-service storage space by an owner to an occupant pursuant to a rental agreement;   Supervising entity means a business entity that is a licensed insurance producer or insurer; and   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.   
  An owner shall hold a limited lines business entity producer's license to sell or offer coverage under a policy of self-service storage insurance. An owner who complies with this part shall be entitled to a limited lines license, without examination, authorizing the owner to sell or offer coverage under a policy of self-service storage insurance.   A limited lines license issued to an owner under this section shall authorize any employee or authorized representative of the owner to sell or offer coverage under a policy of self-service storage insurance to an occupant at each location at which the owner engages in self-service storage transactions.   In connection with an owner's initial application for licensure and at renewal, the owner shall provide a list to the commissioner of all locations in this state at which the owner offers coverage.   Notwithstanding any law to the contrary, a license issued pursuant to this section shall authorize the licensee and its employees or authorized representatives to engage in activities permitted in this part.   
  At every location where self-service storage insurance is offered to occupants, brochures or other written materials shall be made available that:  Disclose that self-service storage insurance may provide a duplication of coverage already provided by an occupant's homeowner's insurance policy, renter's insurance policy or other source of coverage;   State that the enrollment by the occupant in a self-service storage insurance program is not required in order to lease self-service storage space;   Summarize the material terms of the insurance coverage, including:  The identity of the insurer;   The identity of the supervising entity;   The amount of any applicable deductible and how it is to be paid;   Benefits of the coverage; and   Key terms and conditions of coverage such as whether covered personal property may be repaired or replaced;     Summarize the process for filing a claim; and   State that the enrolled occupant may cancel enrollment for coverage under a self-service storage insurance policy at any time and the person paying the premium shall receive a refund of any applicable unearned premium.     Self-service storage insurance may only be offered or sold on a periodic basis in connection with the rental of leased space at the self-service storage facility on a master, corporate, commercial, group, or individual policy basis and only with respect to personal property insurance that provides coverage to an occupant at the self-service storage facility where the insurance is transacted for the loss of or damage to stored personal property that occurs at such facility.   Eligibility and underwriting standards for occupants electing to enroll in coverage shall be established for each self-service storage insurance program.   
  Notwithstanding any law to the contrary, the employees and authorized representatives of an owner may sell or offer self-service storage insurance to occupants and shall not be subject to licensure as an insurance producer under this part; provided, that:  The owner obtains a limited lines license to authorize its employees or authorized representatives to sell or offer self-service storage insurance pursuant to  56-6-1202;   The insurer issuing the self-service storage insurance either directly supervises or appoints a supervising entity to supervise the administration of the program, including development of a training program for employees and authorized representatives of the owner. The training required by this subdivision (a)(2) shall comply with the following:  The training shall be delivered to employees and authorized representatives of an owner who are directly engaged in the activity of selling or offering self-service storage insurance;   The training may be provided in electronic form. If the training is conducted in an electronic form, the supervising entity shall implement a supplemental education program regarding self-service storage insurance that is conducted and overseen by the supervising entity; and   Each employee and authorized representative shall receive basic instruction concerning the self-service storage insurance offered to customers and the disclosures required under  56-6-1203;     No employee or authorized representative of an owner of self-service storage space shall advertise, represent or otherwise hold themselves out as a nonlimited lines licensed insurance producer; and   No employee or authorized representative of an owner shall be compensated based primarily on the number of occupants enrolled for self-service storage coverage; provided, however, the employee or authorized representative may receive compensation for activities under the limited lines license which is incidental to overall compensation.      The charge for self-service storage insurance coverage may be assessed and collected by the owner; provided, however, that such charge shall be a separate item within or an addendum to a rental agreement.   Owners assessing and collecting such charges shall not be required to maintain such funds in a segregated account; provided, the owner is authorized by the insurer to hold such funds in a nonsegregated account and remits such amounts to the supervising entity within sixty (60) days of receipt.   All funds received by an owner from an enrolled occupant for the sale of self-service storage insurance shall be considered funds held in trust by the owner in a fiduciary capacity for the benefit of the insurer.   Owners may receive compensation for assessing and collection services.     
 lf an owner or its employee or authorized representative violates this part, the commissioner is authorized to:   After notice and hearing, impose on a person licensed pursuant to this part civil penalties not to exceed five hundred dollars ($500) per violation and five thousand dollars ($5,000) in the aggregate for such conduct; and   After notice and hearing, impose on a person licensed pursuant to this part other penalties that the commissioner deems necessary and reasonable to carry out the purpose of this part, including:  Suspending the privilege of transacting self-service storage insurance pursuant to this part at specific business locations where violations have occurred; and   Suspending or revoking the authority of individual employees or authorized representatives to act under a license issued pursuant to  56-6-1202.     
 Notwithstanding any other law to the contrary:   An insurer may terminate or otherwise change the terms and conditions of a policy of self-service storage insurance only upon providing the policyholder and enrolled occupants with at least thirty (30) days written notice;   If the insurer changes the terms and conditions, then the insurer shall provide the owner with a revised policy or endorsement and each enrolled occupant with a revised certificate, endorsement, updated brochure or other evidence indicating a change in the terms and conditions has occurred and a summary of material changes;   Notwithstanding subdivision (1):  An insurer may terminate an enrolled occupant's enrollment under a self-service storage insurance policy upon fifteen (15) days written notice for discovery of fraud or material misrepresentation in obtaining coverage or in the presentation of a claim thereunder; and   An insurer may immediately terminate an enrolled occupant's enrollment under a self-service storage insurance policy:   For nonpayment of premium;   If the enrolled occupant ceases to have active business with the owner; or   If an enrolled occupant exhausts the aggregate limit of liability, if any, under the terms of the self-service storage insurance policy and the insurer sends written notice of termination to the enrolled occupant within thirty (30) calendar days after exhaustion of the limit; provided, however, that if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends written notice of termination to the enrolled occupant;       If a self-service storage insurance policy is terminated by a policyholder, then the policyholder shall mail or deliver written notice to each enrolled occupant advising the enrolled occupant of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled occupant at least thirty (30) days prior to the termination; and    Whenever notice by an insurer is required pursuant to this section, the notice shall be in writing and may be mailed or delivered to the owner at the owner's mailing address and to its affected enrolled occupants' last known mailing addresses on file with the insurer;   If notice is mailed pursuant to this section, then the insurer or owner, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States postal service or other commercial mail delivery service;   An insurer or owner may comply with any notice required by this section by providing electronic notice to an owner or its affected enrolled occupants, as the case may be, by electronic means. If notice is accomplished through electronic means, the insurer or owner, as the case may be, shall maintain proof that the notice was sent.     
  A sworn application for a license under this part shall be made to and filed with the commissioner on forms prescribed and furnished by the department.   The application shall:  Provide the name, residence address and other information required by the department for an individual that is designated by the applicant as the individual responsible for the owner's compliance with this part and the name of the principal, officer, employee, or representative who holds a current producer license in this state; and   Provide the location of the applicant's home office.     Initial licenses issued pursuant to this part shall be valid for a period of twenty-four (24) months and expire biennially on March 1 of the renewal year assigned by the commissioner.    Except as provided in subdivision (d)(2), each owner licensed under this part shall pay to the commissioner a fee as prescribed by the commissioner, but in no event shall the fee exceed one thousand dollars ($1,000) for an initial self-service storage limited lines license and five hundred dollars ($500) for each renewal.   The fee prescribed for an owner that is engaged in self-service storage transactions at ten (10) or fewer locations in this state shall not exceed one hundred dollars ($100) for an initial license and for each renewal.     
 For purposes of this part:   Commissioner means the commissioner of commerce and insurance;   Exchange means any health benefit exchange established or operating in this state, including any exchange established or operated by the United States department of health and human services; and   Navigator means any person, other than an insurance producer, or a hospital licensed in this state under title 68 or title 33, who:  Receives any funding, directly or indirectly, from an exchange, this state or the federal government to perform any of the activities and duties identified in 42 U.S.C.  18031(i);   Facilitates enrollment of individuals or employers in health plans or public insurance programs offered through an exchange;   Conducts public education or consumer assistance activities for, or on behalf of, an exchange; or   Is described or designated by an exchange, this state or the United States department of health and human services, or could reasonably be described or designated as, a navigator, an in-person assister, enrollment assister, application assister or application counselor.     
 No navigator shall sell, solicit or negotiate any policy of insurance, either within or outside of an exchange.  
 The commissioner may:   Issue a cease and desist order to a navigator for violating state or federal law pertaining to an exchange; and   Seek injunctive relief against a navigator acting in violation of state or federal law pertaining to an exchange.   
 The commissioner may promulgate such rules and regulations as may be necessary or appropriate to regulate the activities of navigators as may be consistent with the Patient Protection and Affordable Care Act (42 U.S.C.  18011 et seq.).  
 If any provision of this part or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the part which can be given effect without the invalid provision or application, and to that end the provisions of this part are declared to be severable.  
 This part shall be known and may be cited as the Travel Insurance Producer Limited License Act.  
 As used in this part:   Commissioner means the commissioner of commerce and insurance;   Designated responsible producer or DRP means a person designated by a travel insurance supervising entity pursuant to  56-6-1403(a)(2)(C);   Insurer has the same meaning as defined in  56-6-102;   Limited lines travel insurance producer means an individual or business entity that has met the requirements of  56-6-110 and may also be approved as a travel insurance supervising entity;   Offer and disseminate means providing general information, including a description of the coverage and price, as well as processing the application, collecting premiums, and performing other lawful nonlicensable activities;   Travel insurance:  Means insurance coverage for personal risks incident to planned travel, including, but not limited to:   Interruption or cancellation of a trip or event;   Loss of baggage or personal effects;   Damages to accommodations or rental vehicles; or   Sickness, accident, disability, or death occurring during travel; and     Does not include major medical plans that provide comprehensive medical protection for travelers with trips lasting six (6) months or longer, including those working overseas as expatriates or deployed military personnel;     Travel insurance supervising entity means an individual or business entity that receives a license pursuant to  56-6-1403(a)(2) and is a:  Licensed managing general agent, as defined in  56-6-502; or   Licensed insurance producer, including a limited lines producer; and     Travel retailer means a business entity that makes, arranges, or offers travel services and may offer and disseminate travel insurance as a service to its customers on behalf of and under the direction of a travel insurance supervising entity.   
  Notwithstanding any other law to the contrary:  Pursuant to the Tennessee Insurance Producer Licensing Act of 2002, compiled in part 1 of this chapter, the commissioner may issue to an individual or business entity that has filed with the commissioner an application in a form and manner prescribed by the commissioner, a limited lines travel insurance producer license, which authorizes the limited lines travel insurance producer to sell, solicit, or negotiate travel insurance through a licensed insurer;   Pursuant to this chapter, the commissioner may issue a travel insurance supervising entity license to an individual or business entity that has filed with the commissioner an application in a form and manner prescribed by the commissioner, which authorizes the travel insurance supervising entity to sell, solicit, or negotiate travel insurance through a travel retailer only if the following conditions are met:  The travel insurance supervising entity or travel retailer provides to purchasers of travel insurance:   A description of the material terms or the actual material terms of the insurance coverage;   A description of the process for filing a claim;   A description of the review or cancellation process for the travel insurance policy; and   The identity and contact information of the insurer and limited lines travel insurance producer;     At the time of licensure, the travel insurance supervising entity establishes and maintains a register, in a form prescribed by the commissioner, of each travel retailer that offers travel insurance on the travel insurance supervising entity's behalf. The register shall be maintained and updated annually by the travel insurance supervising entity and shall include the name, address, and contact information of the travel retailer and an officer or person who directs or controls the travel retailer's operations, and the travel retailer's federal tax identification number. The travel insurance supervising entity shall submit the register to the department of commerce and insurance upon reasonable request. The travel insurance supervising entity shall also certify that the travel retailer register complies with 18 U.S.C.  1033;   The travel insurance supervising entity has designated one (1) of its employees who is a licensed individual producer as the designated responsible producer (DRP) responsible for the travel insurance supervising entity's compliance with the travel insurance laws and rules of this state;   The commissioner finds that the DRP, president, secretary, treasurer, and any other officer or person who directs or controls the travel insurance supervising entity's insurance operations have not committed any act that is a ground for denial, suspension, or revocation set forth in  56-6-112;   The travel insurance supervising entity has paid all applicable insurance producer licensing fees as set forth in  56-6-121; and   The travel insurance supervising entity requires each employee and authorized representative of the travel retailer whose duties include offering and disseminating travel insurance to receive a program of instruction or training, which may be subject to review by the commissioner. The training material shall, at a minimum, contain instructions on the types of insurance offered, ethical sales practices, and required disclosures to prospective customers;     The initial license issued to a travel insurance supervising entity pursuant to subdivision (a)(2) shall be valid for a period of twelve (12) months and expire annually on March 1; and   Travel insurance supervising entities, and those registered under their licenses, are exempt from examination, prelicensing, and continuing education requirements under this part.     Any travel retailer offering or disseminating travel insurance shall make available to prospective purchasers brochures or other written materials that:  Provide the identity and contact information of the insurer and the travel insurance supervising entity;   Explain that the purchase of travel insurance is not required in order to purchase any other product or service from the travel retailer; and   Explain that an unlicensed travel retailer is permitted to provide general information about the insurance offered by the travel retailer, including a description of the coverage and price, but is not qualified or authorized to answer technical questions about the terms and conditions of the insurance offered by the travel retailer or to evaluate the adequacy of the customer's existing insurance coverage.     A travel retailer's employees or authorized representatives who are not licensed as insurance producers shall not:  Evaluate or interpret the technical terms, benefits, and conditions of the offered travel insurance coverage;   Evaluate or provide advice concerning a prospective purchaser's existing insurance coverage; or   Hold themselves out as licensed insurers, licensed producers, or insurance experts.     
 Notwithstanding any other law, a travel retailer whose insurance-related activities, and those of its employees and authorized representatives, are limited to offering and disseminating travel insurance on behalf of and under the direction of a travel insurance supervising entity meeting the conditions stated in this part, is authorized to do so and receive related compensation for such services, upon registration by the travel insurance supervising entity pursuant to  56-6-1403(a)(2)(B).  
 Travel insurance may be provided under an individual policy or under a group or master policy.  
 As the insurer designee, the travel insurance supervising entity is responsible for the acts of the travel retailer and shall use reasonable means to ensure compliance by the travel retailer with this part.  
  The commissioner may take any action or combination of actions authorized pursuant to  56-2-305 or  56-6-112 against any limited lines travel insurance producer, travel insurance supervising entity, or travel retailer licensed or approved pursuant to this part.   If the commissioner determines that a travel retailer or a travel retailer's employee has violated this part or any other provision of this title, the commissioner may:  Direct the travel insurance supervising entity to implement a corrective action plan with the travel retailer; or   Direct the travel insurance supervising entity to revoke the authorization of the travel retailer to transact travel insurance on its behalf and under its license and to remove the travel retailer's name from its register.     If the commissioner determines that a travel retailer or a travel retailer's employee has violated this part or any other provision of this title, the commissioner, after notice and hearing, may take any actions authorized pursuant to  56-2-305 or  56-6-112.   
  In addition to other powers permitted to banks by title 45, a state bank may own, operate or manage an insurance company offering only surety insurance, as defined in  56-2-201(6)(E).   An insurance company owned by a bank shall comply with all Tennessee law applicable to insurance companies and shall be regulated by the commissioner of commerce and insurance.   
 Insurance agents licensed in this state may charge, receive and collect on the principal balance of unpaid insurance and bond premiums a time-price differential not to exceed the rate now provided for retail merchants under the Retail Installment Sales Act, compiled in title 47, chapter 11:   On so much of the principal balance as does not exceed five hundred dollars ($500), ten dollars ($10.00) per one hundred dollars ($100) per year;   If the principal balance exceeds five hundred dollars ($500), but is less than five thousand dollars ($5,000), eight dollars ($8.00) per one hundred dollars ($100) per year on that portion over five hundred dollars ($500); and   If the principal balance exceeds five thousand dollars ($5,000), six dollars ($6.00) per one hundred dollars ($100) per year on that portion over five thousand dollars ($5,000).   
 The time-price differential provided for in this part shall be computed in the same manner as is provided in the Retail Installment Sales Act, as set out in  47-11-103(d).  
 In the event time-price differential charges are made pursuant to this part, the purchaser of insurance must agree to the charges in writing, and the instrument must contain:   The cash price of the insurance policy or bond and the amount of the initial payment, if any;   The difference between the two (2), if any;   The principal balance owed;   The amount of the time-price differential; and   The time balance owed by the buyer.   
 The buyer of insurance may prepay in full at any time before maturity the unpaid balance due, and in so paying the unpaid balance, shall receive a refund credit as provided under  47-11-103(h).  
 No agent shall make time-price differential charges in excess of the schedule provided in this part, and willful violation of this part is a Class C misdemeanor.  
 Time-price differential transactions as described in this part shall not be deemed to be loans or forbearances of money or things of value or the making of the loans or forbearances, nor shall they be regulated by or subject to title 45, chapter 5.  
 This part does not apply to agents who finance premiums through a Tennessee corporation, or a corporation domesticated to transact business in Tennessee, that is either an insurer, a subsidiary of an insurer or owned by a group of insurers, and that confines its business to the financing of insurance premiums on policies issued by the owners of the company.  
 As used in this part, administrator means any person, company, corporation, partnership, association or other legal entity that collects charges or premiums from, or that adjusts or settles claims on, residents of this state in connection with life or health insurance coverage or annuities other than:   An employer on behalf of its employees or the employees of one (1) or more subsidiary or affiliated corporations of the employer;   A union on behalf of its members;   An insurance company that is either licensed in this state or acting as an insurer with respect to a policy lawfully issued and delivered by it in and pursuant to the laws of a state in which the insurer was authorized to conduct an insurance business or a nonprofit hospital, medical, dental or vision service organization, including its sales representatives, licensed in this state when engaged in the performance of its duties as such, or a duly licensed health maintenance organization;   A life or health agent or broker licensed in this state, whose activities are limited exclusively to the sale of insurance, or sales-related services for which no monetary compensation is paid;   A creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;   A trust, its trustees, agents and employees acting under the trust, established in conformity with 29 U.S.C.  186;   A trust exempt from taxation under the Internal Revenue Code,  501(a) (26 U.S.C.  501(a)), its trustees, and employees acting under 26 U.S.C.  501(a), or a custodian, its agents and employees acting pursuant to a custodian account that meets the requirements of the Internal Revenue Code,  401(f) (26 U.S.C.  401(f));   A bank, credit union or other financial institution that is subject to supervision or examination by federal or state banking authorities;   A credit card issuing company that advances for and collects premiums or charges from its credit card holders who have authorized it to do so, provided the company does not adjust or settle claims; or   A person who adjusts or settles claims in the normal course of the person's practice or employment as an attorney at law, and who does not collect charges or premiums in connection with life or health insurance coverage or annuities.   
  No administrator shall act as administrator without a written agreement between the administrator and the insurer, and the written agreement shall be retained as part of the official records of both the insurer and the administrator for the duration of the agreement and five (5) years thereafter. The written agreement shall contain provisions that include the requirements of  56-6-404  56-6-408, except insofar as those requirements do not apply to the functions performed by the administrator.   Where a policy is issued to a trustee or trustees, a copy of the trust agreement and any amendments to the trust agreement shall be furnished to the insurer by the administrator and shall be retained as part of the official records of both the insurer and the administrator for the duration of the policy and five (5) years thereafter.   The agreement between administrator and insurer shall make provision with respect to the underwriting or other standards pertaining to the business underwritten by the insurer.   
 Whenever an insurer utilizes the services of an administrator under the terms of a written contract as required in  56-6-402, the payment to the administrator of any premiums or charges for insurance by or on behalf of the insured shall be deemed to have been received by the insurer, and the payment of return premiums or claims by the insurer to the administrator shall not be deemed payment to the insured or claimant until the payments are received by the insured or claimant. Nothing in this section shall limit any right of the insurer against the administrator resulting from its failure to make payments to the insurer, insureds or claimants.  
  Every administrator shall maintain at its principal administrative office, for the duration of the written agreement referred to in  56-6-402 and five (5) years thereafter, adequate books and records of all transactions between it, insurers and insured persons. The books and records shall be maintained in accordance with prudent standards of insurance record keeping. The commissioner shall have access to the books and records for the purpose of examination, audit and inspection.   Any trade secrets contained in the books and records, including, but not limited to, the identity and addresses of policyholders and certificate holders, shall be confidential, except the commissioner may use the information in any proceedings instituted against the administrator.   The insurer shall retain the right to continuing access to the books and records of the administrator sufficient to permit the insurer to fulfill all of its contractual obligations to insured persons, subject to any restrictions in the written agreement between the insurer and administrator concerning the proprietary rights of the parties in the books and records.   The commissioner shall collect the proper charges incurred in the examination in accordance with  56-1-413.   
 An administrator may use only advertising pertaining to the business underwritten by an insurer that has been approved by the insurer in advance of its use.  
 All insurance charges or premiums collected by an administrator on behalf of or for an insurer or insurers, and return premiums received from the insurer or insurers, shall be held by the administrator in a fiduciary capacity. The funds shall be immediately remitted to the person or persons entitled to the funds, or shall be deposited promptly in a fiduciary bank account established and maintained by the administrator. If charges or premiums so deposited have been collected on behalf of or for more than one (1) insurer, the administrator shall cause the bank in which the fiduciary account is maintained to keep records clearly recording the deposits in and withdrawal from the account on behalf of or for each insurer. The administrator shall promptly obtain and keep copies of all the records and, upon request of an insurer, shall furnish the insurer with copies of the records pertaining to deposits and withdrawals on behalf of or for the insurer. The administrator shall not pay any claim by withdrawals from the fiduciary account. Withdrawals from the account shall be made, as provided in the written agreement between the administrator and the insurer, for:   Remittance to an insurer entitled to the remittance;   Deposit in an account maintained in the name of the insurer;   Transfer to and deposit in a claims paying account, with claims to be paid as provided in  56-6-407;   Payment to a group policyholder for remittance to the insured entitled to the remittance;   Payment to the administrator of its commission, fees or charges; or   Remittance of return premiums to the person or persons entitled to the remittance.   
 All claims paid by the administrator from funds collected on behalf of the insurer shall be paid only on drafts, checks or electronic transfers of and as authorized by the insurer.  
  With respect to any policies where an administrator adjusts or settles claims, the compensation to the administrator with regard to the policies shall in no way be contingent on claim experience.   This section shall not prevent the compensation of an administrator from being based on premiums or charges collected or number of claims paid or processed.   
  Where the services of an administrator are utilized, the administrator shall provide a written notice approved by the insurer, to insured individuals, advising them of the identity of and relationship among the administrator, the policyholder and the insurer.   Where an administrator collects funds, it must identify and state separately in writing to the person paying to the administrator any charge or premium for insurance coverage the amount of  the charge or premium specified by the insurer for the insurance coverage.   
  No person shall act as, or hold out to be, an administrator in this state, other than an adjuster licensed in this state for the kinds of business for which the person is acting as an adjuster, unless the person holds a license as an administrator issued by the commissioner. Failure to hold the license shall subject the administrator to a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500). The license shall be issued by the commissioner to an administrator unless the commissioner, after due notice and hearing, shall have determined that the administrator is not competent, trustworthy, financially responsible or of good personal and business reputation, or has had a previous application for an insurance license denied for cause within five (5) years.   All applications shall be accompanied by a fee of one hundred dollars ($100). The license is renewable annually on the date of issue. A request for renewal must be accompanied by a renewal fee of fifty dollars ($50.00). Prior to the issuance or renewal of the license of any administrator, a fidelity bond in a form and amount as determined by the commissioner shall be obtained by the licensee.   After notice and hearing, the commissioner may revoke the license or fine the administrator not more than five hundred dollars ($500), or both, or the commissioner may suspend the license, or fine the administrator not more than five hundred dollars ($500), or both, upon finding that either the administrator violated any of the requirements of  56-6-402 and 56-6-404  56-6-409, or the administrator is not competent, trustworthy, financially responsible, or of good personal and business reputation.   
 The commissioner may waive the requirements of  56-6-410 for any person or class of persons. The factors taken into account in granting the waiver shall include, but not be limited to:   Whether the person acting as an administrator is primarily in a business other than that of administrator;   Whether the financial strength or history of the organization indicates stability in its continuity of doing business; and   Whether the regular duties being performed as an administrator are such that the covered persons are not likely to be injured by a waiver of the requirements.   
 This part shall not be applicable to those trusts regulated by the federal government.  
 This part shall be known and may be cited as the Managing General Agents Act.  
 As used in this part, unless the context otherwise requires:   Actuary means a person who is a member in good standing of the American Academy of Actuaries;   Insurer means any person, firm, association or corporation duly licensed in this state as an insurance company pursuant to  56-2-102;    Managing general agent or MGA means any person who:   Manages all or part of the insurance business of an insurer, including the management of a separate division, department, or underwriting office; and   Acts as an agent for such insurer, whether known as a MGA, manager, or other similar term, and who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent (5%) of the policyholder surplus in any one (1) quarter or year, as reported in the last annual statement of the insurer, and, related to the business produced, either:        Adjusts or pays claims in excess of ten thousand dollars ($10,000) per claim; or   Negotiates reinsurance on behalf of the insurer;    Notwithstanding subdivision (3)(A), the following persons shall not be considered as MGAs for the purposes of this part:   An employee of the insurer;   A United States manager of the United States branch of an alien insurer;   An underwriting manager that, pursuant to contract, manages all the insurance operations of the insurer, is under common control with the insurer, subject to the Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title, and whose compensation is not based on the volume of premiums written; and   The attorney-in-fact authorized by and acting for the subscribers of a reciprocal insurer or inter-insurance exchange under powers of attorney; and   Underwrite means the authority to accept or reject risk on behalf of the insurer.  
  No person shall act in the capacity of an MGA, with respect to risks located in this state for an insurer licensed in this state, unless the person is a licensed insurance agent in this state.   No person shall act in the capacity of an MGA representing an insurer domiciled in this state, with respect to risks located outside this state, unless the person is a licensed insurance agent in this state, which includes a nonresident license, pursuant to this part.   The commissioner may require a bond in an amount acceptable to the commissioner for the protection of the insurer.   The commissioner may require the MGA to maintain an errors and omissions policy.   
 No person, firm, association or corporation acting in the capacity of an MGA shall place business with an insurer unless there is in force a written contract between the parties that sets forth the responsibilities of each party and where both parties share responsibility for a particular function, specifies the division of responsibilities, and that contains the following minimum provisions:   The insurer may terminate the contract for cause upon written notice to the MGA. The insurer may suspend the underwriting authority of the MGA during the pendency of any dispute regarding the cause for termination;   The MGA will render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer on not less than a monthly basis;   All funds collected for the account of an insurer will be held by the MGA in a fiduciary capacity in a bank that is a member of the federal reserve system or is a state bank covered by federal deposit insurance. This account shall be used for all payments on behalf of the insurer. The MGA may retain no more than three (3) months estimated claims payments and allocated loss adjustment expenses;   Separate records of business written by the MGA will be maintained. The insurer shall have access and right to copy all accounts and records related to its business in a form usable by the insurer, and the commissioner shall have access to all books, bank accounts and records of the MGA in a form usable to the commissioner. The records shall be retained according to  56-6-154 [repealed];   The contract may not be assigned in whole or in part by the MGA;    Appropriate underwriting guidelines including:   The maximum annual premium volume;   The basis of the rates to be charged;   The types of risks which may be written;   Maximum limits of liability;   Applicable exclusions;   Territorial limitations;   Policy cancellation provisions; and   The maximum policy period.     The insurer shall have the right to cancel or nonrenew any policy of insurance, subject to the applicable laws and regulations concerning the cancellation and nonrenewal of insurance policies;     If the contract permits the MGA to settle claims on behalf of the insurer:  All claims must be reported to the company in a timely manner;   A copy of the claim file will be sent to the insurer at its request or as soon as it becomes known that the claim:   Has the potential to exceed an amount determined by the commissioner or exceeds the limit set by the company, whichever is less;   Involves a coverage dispute;   May exceed the MGA's claims settlement authority;   Is open for more than six (6) months; or   Is closed by payment of an amount set by the commissioner or an amount set by the company, whichever is less;     All claim files will be the joint property of the insurer and MGA. Upon an order of liquidation of the insurer, the files shall become the sole property of the insurer or its estate. The MGA shall have reasonable access to and the right to copy the files on a timely basis; and   Any settlement authority granted to the MGA may be terminated for cause upon the insurer's written notice to the MGA or upon the termination of the contract. The insurer may suspend the settlement authority during the pendency of any dispute regarding the cause for termination;     Where electronic claims files are in existence, the contract must address the timely transmission of the data;   If the contract provides for a sharing of interim profits by the MGA, and the MGA has the authority to determine the amount of the interim profits by establishing loss reserves or controlling claim payments, or in any other manner, interim profits will not be paid to the MGA until one (1) year after they are earned for property insurance business and five (5) years after they are earned on casualty business, and not until the profits have been verified pursuant to  56-6-505; and   The MGA shall not:  Bind reinsurance or retrocessions on behalf of the insurer, except that the MGA may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which such automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured and commission schedules;   Commit the insurer to participate in insurance or reinsurance syndicates;   Appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which the producer is appointed;   Without prior approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which shall not exceed one percent (1%) of the insurer's policyholder's surplus as of December 31 of the last completed calendar year;   Collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer without prior approval of the insurer. If prior approval is given, a report must be promptly forwarded to the insurer;   Permit its subproducer to serve on the insurer's board of directors;   Jointly employ an individual who is employed with the insurer; or   Appoint a sub-MGA.     
  The insurer shall have on file an independent financial examination, in a form acceptable to the commissioner, of each MGA with which it has done business.   If an MGA establishes loss reserves, the insurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the MGA. This is in addition to any other required loss reserve certification.   The insurer shall periodically, at least semi-annually, conduct an on-site review of the underwriting and claims processing operations of the MGA.   Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates shall rest with an officer of the insurer, who shall not be affiliated with the MGA.   Within thirty (30) days of entering into or termination of a contract with an MGA, the insurer shall provide written notification of the appointment or termination to the commissioner. Notices of appointment of an MGA shall include a statement of duties that the applicant is expected to perform on behalf of the insurer, the lines of insurance for which the applicant is to be authorized to act, and any other information the commissioner may request.    An insurer shall review its books and records each quarter to determine if any producer, as defined by  56-6-602, has become, by operation of  56-6-502(3), an MGA.   If the insurer determines that a producer has become an MGA pursuant to subdivision (f)(1), the insurer shall promptly notify the producer and the commissioner of that determination, and the insurer and producer must fully comply with this part within thirty (30) days.     An insurer shall not appoint to its board of directors an officer, director, employee, subproducer or controlling shareholder of its MGAs. This subsection (g) shall not apply to relationships governed by the Insurance Holding Company Act, compiled in chapter 11 of this title, or, if applicable, the Business Transacted with Producer Controlled Property/Casualty Insurer Act, compiled in part 6 of this chapter.   
 The acts of the MGA are considered to be the acts of the insurer on whose behalf it is acting. An MGA may be examined as if it were the insurer.  
  If the commissioner finds, after a hearing conducted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, that any person has violated this part, the commissioner may order:  For each separate violation, a penalty in an amount of five thousand dollars ($5,000);   Revocation or suspension of the producer's license; and   The MGA to reimburse the insurer, the rehabilitator or liquidator of the insurer for any losses incurred by the insurer caused by a violation of this part committed by the MGA.     The decision, determination or order of the commissioner pursuant to subsection (a) is subject to judicial review pursuant to the Uniform Administrative Procedures Act and state insurance law.   Nothing contained in this section shall affect the right of the commissioner to impose any other penalties provided for in the insurance law.   Nothing contained in this part is intended to or shall in any manner limit or restrict the rights of policyholders, claimants and auditors.   
 The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this part. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 The commissioner may waive the application of this chapter to a particular person or arrangement if the application of this chapter is not necessary to carry out the purposes of this chapter.  
 No insurer may continue to utilize the services of an MGA on and after July 1, 1991, unless the utilization is in compliance with this part.  
 This part shall be known and may be cited as the Business Transacted with Producer Controlled Property/Casualty Insurer Act.  
 As used in this part, unless the context otherwise requires:   Control or controlled means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a contract for goods or nonmanagement services, or otherwise. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the powers to vote, or holds proxies representing a majority of the outstanding voting securities of any other person. No person shall be deemed to control another person solely by reason of being an officer or director of the person. The commissioner may determine upon application that any person does not or will not upon the taking of some proposed action control another person. The commissioner may prospectively revoke or modify the commissioner's determination, after notice and opportunity to be heard, whenever, in the commissioner's judgment, revocation or modification is consistent with this part;   Independent casualty actuary means a casualty actuary who is a member of the American Academy of Actuaries and who is not affiliated with, nor an employee, principal, nor the direct or indirect owner of, or in any way controlled by, the insurer or producer;   Licensed property/casualty insurer or insurer means a person, firm, association or corporation duly licensed to transact a property/casualty insurance business in this state. The following, among others, are not licensed insurers for the purposes of this part:  All residual market pools and joint underwriting authorities or associations; and   All captive insurers other than risk retention groups as defined in 15 U.S.C.  3901 et seq. and 42 U.S.C.  9671. For the purposes of this part, captive insurers are insurance companies owned by another organization whose exclusive purpose is to insure risks of the parent organization and affiliated companies or, in the case of groups and associations, insurance organizations owned by the insureds whose exclusive purpose is to insure risks to member organizations and group members and their affiliates;     Producer means an insurance broker or brokers or any other person, firm, association or corporation, when, for any compensation, commission or other thing of value, the person, firm, association or corporation acts or aids in any manner in soliciting, negotiating or procuring the making of any insurance contract on behalf of an insured other than the person, firm, association or corporation; and   Violation means a finding by the commissioner that:  The controlling producer did not materially comply with  56-6-603;   The controlled insurer, with respect to business placed by the controlling producer, engaged in a pattern of charging premiums that were lower than those being charged by the insurer or other insurers for similar risks written during the same period and placed by noncontrolling producers. When determining whether premiums were lower than those prevailing in the market, the commissioner shall take into consideration applicable industry or actuarial standards at the time the business was written;   The controlling producer failed to maintain records, sufficient to:   Demonstrate that the producer's dealings with its controlled insurer were fair and equitable and in compliance with the Insurance Holding Company System Act of 1986, compiled in chapter 11 of this title; and   Accurately disclose the nature and details of its transactions with the controlled insurer, including information necessary to support the charges or fees to the respective parties;     The controlled insurer, with respect to business placed by the controlling producer, either failed to establish or deviated from its underwriting procedures;   The controlled insurer's capitalization at the time the business was placed by the controlling producer and with respect to the business was not in compliance with criteria established by the commissioner or with the insurance law or regulations; or   The controlling producer or the controlled insurer failed to substantially comply with the holding company provisions of the insurance law and any rules and regulations relative to the provisions.     
 No producer that has control of a licensed property/casualty insurer may directly or indirectly place business with the insurer in any transaction in which the producer, at the time the business is placed, is acting as such on behalf of the insured for any compensation, commission or other thing of value, unless:   There is a written contract between the controlling producer and the insurer, which contract has been approved by the board of directors of the insurer;   The producer, prior to the effective date of the policy, delivers written notice to the prospective insured disclosing the relationship between the producer and the controlled insurer. The disclosure, signed by the insured, shall be retained in the underwriting file until the filing of the report on examination covering the period in which the coverage is in effect. If the business is placed through a subproducer who is not a controlling producer, the controlling producer shall retain in the controlling producer's records a signed commitment from the subproducer that the subproducer is aware of the relationship between the insurer and the producer and that the subproducer has or will notify the insured;   All funds collected for the account of the insurer by the controlling producer must be paid, net of commissions, cancellations and other adjustments, to the insurer no less often than quarterly;   In addition to any other required loss reserve certification, the controlled insurer shall annually, on April 1 of each year, file with the commissioner an opinion of an independent casualty actuary, or other independent loss reserve specialist acceptable to the commissioner, reporting loss ratios for each line of business written and attesting to the adequacy of loss reserves established for losses incurred and outstanding as of year end, including incurred but not reported, on business placed by the producer;   The controlled insurer shall annually report to the commissioner the amount of commissions paid to the producer, the percentage the amount represents of the net premiums written and comparable amounts and percentage paid to noncontrolling producers for placements of the same kinds of insurance; and   Every controlled insurer shall have an audit committee of the board of directors composed of independent directors. Prior to approval of the annual financial statement, the audit committee shall meet with management, the insurer's independent certified public accountants, and an independent casualty actuary, or other independent loss reserve specialist acceptable to the commissioner, to review the adequacy of the insurer's loss reserves.   
   If the commissioner believes that the controlling producer or any other person has not materially complied with this part, or any regulation or order promulgated under this part, after notice and opportunity to be heard, the commissioner may order the controlling producer to cease placing business with the controlled insurer; and   If it is found that, because of the material noncompliance, the controlled insurer or any policyholder of the insurer has suffered any loss or damage, the commissioner may institute a civil action or intervene in an action brought by or on behalf of the insurer or policyholder for recovery of compensatory damages for the benefit of the insurer or policyholder or other appropriate relief.     If an order for liquidation or rehabilitation of the controlled insurer has been entered pursuant to chapter 9, part 1 of this title, and the receiver appointed under that order believes that the controlling producer or any other person has not materially complied with this part, or any regulation or order promulgated under this part, and the insurer suffered any loss or damage from the noncompliance, the receiver may institute a civil action for recovery of damages or other appropriate sanctions for the benefit of the insurer.   Nothing contained in this section shall affect the right of the commissioner to impose any other penalties provided for in this title.   Nothing contained in this section is intended to or shall in any manner alter or affect the rights of policyholders, claimants, creditors or other third parties.   
 This part shall be known and may be cited as the Health Care Service Utilization Review Act.  
 The purpose of this part is to:   Promote the delivery of quality health care in a cost-effective manner;   Assure that utilization review agents adhere to reasonable standards for conducting utilization review;   Foster greater coordination and cooperation between health care providers and utilization review agents;   Improve communications and knowledge of benefit plan requirements among all parties concerned before expenses are incurred; and   Ensure that utilization review agents and procedures maintain and safeguard the confidentiality of all health-related records, especially mental health and chemical dependency disorders, in accordance with applicable laws and requirements of nationally recognized review accreditation bodies such as the Health Insurance Portability and Accountability Act (HIPAA) and the utilization review accreditation commission (URAC).   
 As used in this part, unless the context otherwise requires:   Adverse determination has the same meaning as defined in  56-61-102;   Clinical criteria means the written policies, screening procedures, decision rules, decision abstracts, clinical protocols, practice guidelines, and medical protocols used by the utilization review agent to determine the necessity and appropriateness of health care services;   Commissioner means the commissioner of commerce and insurance;   Enrollee means an individual who has contracted for or who participates in coverage under an insurance policy, a health maintenance organization contract, a health service corporation contract, an employee welfare benefit plan, a hospital or medical services plan, or any other benefit program providing payment, reimbursement, or indemnification for health care costs for the individual or the individual's eligible dependents;   Final adverse determination has the same meaning as defined in  56-61-102;   Health care service means health care procedures, treatments, or services provided by a facility licensed in this state or provided by a doctor of medicine, a doctor of osteopathy, or a health care professional licensed in this state;   Medical necessity has the same meaning as defined in  56-61-102;   Preauthorization means the process by which the utilization review agent determines the medical necessity of otherwise covered health care services prior to the rendering of such health care services including, but not limited to, preadmission review, pretreatment review, utilization, and case management;   Provider of record means the physician or other licensed practitioner identified to the utilization review agent as having primary responsibility for the care, treatment, and services rendered to an individual;    Utilization review means a system for prospective and concurrent review of the necessity and appropriateness in the allocation of health care resources and services given or proposed to be given to an individual within this state;   Utilization review does not include elective requests for clarification of coverage; and     Utilization review agent means any person or entity, including the state, performing utilization review, except:  An agency of the federal government;   An agent acting on behalf of the federal government, but only to the extent that the agent is providing services to the federal government;   A hospital's internal quality assurance program;   An employee of a utilization review agent; or   Health maintenance organizations licensed and regulated by the commissioner, but only to the extent of providing utilization review to their own members.     
  Utilization review agents shall adhere to the minimum standards set forth in  56-6-705. Utilization review programs for the mental health and chemical dependency care must comply with the most recent requirements of nationally recognized utilization review accrediting bodies, i.e., the utilization review accreditation commission (URAC) and the national committee for quality assurance (NCQA), if the agent is accredited and with all final security and privacy rules on protected health information as defined in the Health Insurance Portability and Accountability Act (HIPAA). However, nothing in this part shall be construed to require compliance with the final security and privacy rules of HIPAA prior to the compliance dates set by the secretary of health and human services.    A utilization review agent may not conduct utilization review in this state unless the utilization review agent has certified to the commissioner in writing that the agent is in compliance with  56-6-705. Certification shall be made annually on or before July 1 of each calendar year. In addition, a utilization review agent shall file the following information:  The name, address, telephone number, and normal business hours of the utilization review agent;   The name and telephone number of a person for the commissioner to contact;   A description of the appeal procedures for utilization review determinations; and   Utilization review programs for mental health and chemical dependency care shall make available to a provider submitting patient utilization review information a description of utilization review standards and procedures applicable to that provider.     Any material changes in the information filed in accordance with this section shall be filed with the commissioner within thirty (30) days of the change.     Upon filing the certification, each utilization review agent shall pay an annual fee in the amount of one thousand dollars ($1,000) to the department. The commissioner shall exempt from payment of the annual fee any utilization review agent that has received accreditation by URAC or NCQA. All fees paid to the department under this part shall be held by the commissioner as expendable receipts for the purpose of administering this part.   
  All utilization review agents shall meet the following minimum standards:  Notification of a determination by the utilization review agent shall be mailed or otherwise communicated to the provider of record or the enrollee or other appropriate individual within two (2) business days of the receipt of the request for determination and the receipt of all information necessary to complete the review;    Any restrictions, preauthorizations, adverse determinations, or final adverse determinations that a utilization review agent places on the preauthorization of health care services shall be based on the medical necessity or appropriateness of those services and shall be based on written clinical criteria;   Utilization review agents shall apply written clinical criteria consistently. Written clinical criteria shall:   Be based on:  Nationally recognized standards including, but not limited to, the standards published by the American College of Cardiology, MCG, Hayes, Inc., or ODG; provided, however, that when multiple standards addressing the same treatment protocol exist, the payer shall have the right to select the standard upon which the written clinical criteria will be based; or   Standards developed pursuant to  50-6-124;     Be developed in accordance with the current standards of national accreditation entities or with standards developed pursuant to  50-6-124;   Ensure quality of care and access to needed health care services;   Be evidence-based; and   Be evaluated and updated at least annually;     A utilization review agent shall make any current preauthorization requirements and restrictions available on its online provider portal. The utilization review agent shall cite to the standards being used and reference the section of the standards relied upon by the utilization review agent. If the utilization review agent is relying upon proprietary references and documentation in developing the clinical criteria, then the utilization review agent shall provide a citation to the proprietary clinical indications being used. Any nonproprietary supporting references and documentation shall be made available to contracted providers if the utilization review agent develops its own clinical criteria; and   If a utilization review agent intends to either implement a new preauthorization requirement or restriction, or amend an existing requirement or restriction, the utilization review agent shall provide contracted health care providers with written notice, or other form of notice under the terms of the contract, of the new or amended requirement or restriction no less than sixty (60) days before the requirement or restriction is implemented and shall ensure that such restriction or requirement has been updated on the utilization review agent's web site;     Any notification of determination not to certify an admission or service or procedure must include the principal reason for the determination and the procedures to initiate an appeal of the determination;   Utilization review agents shall maintain and make available a written description of the appeal procedure by which the enrollee or the provider of record may seek review of a determination by the utilization review agent. The appeal procedure shall provide for the following:  On appeal, all determinations not to certify an admission, service, or procedure as being necessary or appropriate shall be made by a physician in the same or a similar general specialty as typically manages the medical condition, procedure or treatment under discussion as mutually deemed appropriate. For mental health and chemical dependency care, the person performing the utilization review in these appeal determinations must be both licensed at the independent practice level and in an appropriate mental health or chemical dependency discipline like that of the provider seeking authorization for the care denied;   Utilization review agents shall complete the adjudication of appeals of determinations not to certify admissions, services, and procedures no later than thirty (30) days from the date the appeal is filed and the receipt of all information necessary to complete the appeal; and   When an initial determination not to certify a health care service is made prior to or during an ongoing service requiring review, and the attending physician believes that the determination warrants immediate appeal, the attending physician shall have an opportunity to appeal that determination over the telephone on an expedited basis. A representative of a hospital or other health care provider or a representative of the enrollee or covered patient may assist in an appeal. Utilization review agents shall complete the adjudication on an expedited basis. Utilization review agents shall complete the adjudication of expedited appeals within forty-eight (48) hours of the date the appeal is filed and the receipt of all information necessary to complete the appeal. Expedited appeals which do not resolve a difference of opinion may be resubmitted through the standard appeal process;     Utilization review agents shall make staff available by toll-free telephone at least forty (40) hours per week during normal business hours;   Utilization review agents shall have a telephone system capable of accepting or recording incoming telephone calls during other than normal business hours and shall respond to these calls within two (2) working days;   Utilization review agents shall comply with all applicable laws to protect the confidentiality of individual medical records;   In the event that nationally recognized standards for a specific treatment protocol do not exist to satisfy the requirements of subdivision (a)(2)(B)(i), a utilization review agent shall ensure that all adverse determinations related to the specific treatment protocol are made by a physician or psychologist. A physician shall possess a valid license to practice medicine and shall be board certified or board eligible, or trained in the similar specialty as the health care provider who typically manages the medical condition or disease, or provides the health care service. A psychologist shall possess a valid license or certificate and shall be board certified or board eligible, or trained in the similar specialty as the health care provider who typically manages the medical condition or disease, or provides the health care service;   Utilization review agents shall allow a minimum of twenty-four (24) hours after an emergency admission, service, or procedure for an enrollee or the enrollee's representative to notify the utilization review agent and request certification or continuing treatment for that condition; and    For outpatient mental health and chemical dependency care, the patient must register pursuant to the requirements of the policy or contract. After registration, the patient shall be approved for at least twelve (12) visits to a particular provider, except as otherwise provided in this section;   Initial utilization review for such outpatient mental health or chemical dependency patients shall be limited to no more than a two (2) page form to be submitted via facsimile or internet and pursuant to state and federal privacy rules, security rules, and any final rules issued pursuant to the Health Insurance Portability and Accountability Act (HIPAA). After November 1, 2005, or sooner if required by HIPAA, the form shall be restricted to a single page. After November 1, 2005, the provider may no longer fax the form but is required to use the internet to submit necessary information if the utilization review agent so requires. In the event that the utilization review agent elects to restrict the submissions to the internet, provisions must be made to fax the information in the event of computer malfunction;   After the initial utilization review, additional information or follow-up utilization review for outpatient mental health or chemical dependency patients shall be limited to no more than eighteen percent (18%) of the total number of outpatient mental health and chemical dependency patients' reviews performed by the utilization review agent for the previous calendar year adjusted for the difference of covered lives in this state for the present calendar year, or as otherwise required by the Utilization Review Accreditation Commission (URAC) or the National Committee for Quality Assurance (NCQA). The eighteen-percent limit shall not apply to utilization review applicable to at risk populations, patients seen more than two (2) visits a week and patients for which substance abuse is reported or suspected. Calls from reviews to providers for appointment follow-up calls or for the credentialing process shall also not be subject to the eighteen-percent limit;   After utilization review as provided in this subdivision (a)(10), patients shall be authorized for at least twelve (12) additional visits or as otherwise recommended by the treatment plan;   Nothing in this part shall be construed to require compliance with the final security and privacy rules of HIPAA prior to the compliance dates set by the secretary of health and human services; and   Nothing in this part shall affect the policy or contract benefits nor shall it affect the Mental Health Parity Act, compiled in  56-7-2601 and 56-7-2360.       With the exception of those standards contained in subdivisions (a)(2), (8), and (10), the commissioner shall exempt from the standards of this section any utilization review agent who has received accreditation by URAC or NCQA. Standards contained in subdivisions (a)(2) and (8) shall not apply to any TennCare dental benefits management program or any state insurance plan set out in title 8, chapter 27.   
  Whenever the commissioner has reason to believe that a utilization review agent subject to this part has been or is engaged in conduct that violates this part, the commissioner shall notify the utilization review agent of the alleged violation. The utilization review agent has thirty (30) days from the date the notice is received to respond to the alleged violation.   If the commissioner believes the utilization review agent has violated this part, or is not satisfied that the alleged violation has been corrected, the commissioner may conduct a contested case hearing on the alleged violation in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   If, after the hearing, the commissioner determines that the utilization review agent has engaged in violations of this part, the commissioner shall reduce the findings to writing and shall issue and cause to be served upon the utilization review agent a copy of the findings and an order requiring the utilization review agent to cease and desist from engaging in the violations. The commissioner may also, at the commissioner's discretion, order:  Payment of a penalty of not more than ten thousand dollars ($10,000) in the aggregate for a violation that occurred with such frequency as to indicate a general business pattern or practice; or   Suspension or revocation of the authority to do business in this state as a utilization review agent if the utilization review agent knew the act was in violation of this chapter and repeated the act with such frequency as to indicate a general business pattern or practice.     
 This part shall be known and may be cited as the Reinsurance Intermediary Act.  
 As used in this part, unless the context otherwise requires:   Actuary means a person who is a member in good standing of the American Academy of Actuaries;   Controlling person means any person, firm, association or corporation who directly or indirectly has the power to direct, or cause to be directed, the management, control or activities of the reinsurance intermediary;   Insurer means any person, firm, association or corporation duly licensed in this state pursuant to the applicable provisions of this title as an insurer;   Licensed producer means an agent, broker or reinsurance intermediary licensed pursuant to the applicable provisions of this title;   Qualified United States financial institution means an institution that:  Is organized or, in the case of a United States office of a foreign banking organization, licensed, under the laws of the United States or any state;   Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies; and   Has been determined by either the commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet the standards of financial condition and standing considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the commissioner;     Reinsurance intermediary means a reinsurance intermediary broker, or a reinsurance intermediary manager; provided, that an entity that controls, is controlled by or under common control with the reinsurer, and that facilitates the administration of reinsurance business pursuant to a reinsurance agreement between the ceding company and the reinsurer, is not a reinsurance intermediary;   Reinsurance intermediary broker (RB)  means any person, other than an officer or employee of the ceding insurer, firm, association or corporation who solicits, negotiates or places reinsurance cessions or retrocessions on behalf of a ceding insurer without the authority or power to bind reinsurance on behalf of the insurer;    Reinsurance intermediary manager (RM) means any person, firm, association or corporation that has authority to bind or manages all or part of the assumed reinsurance business of a reinsurer, including the management of a separate division, department or underwriting office, and acts as an agent for the reinsurer whether known as an RM, manager or other similar term;   Notwithstanding subdivision (8)(A), the following persons shall not be considered an RM, with respect to such reinsurer, for the purposes of this part:   An employee of the reinsurer;   A United States manager of the United States branch of an alien reinsurer;   An underwriting manager who, pursuant to contract, manages all the reinsurance operations of the reinsurer, is under common control with the reinsurer, subject to chapter 11 of this title, and whose compensation is not based on the volume of premiums written; or   The manager of a group, association, pool or organization of insurers that engage in joint underwriting or joint reinsurance and that are subject to examination by the insurance commissioner of the state in which the manager's principal business office is located;       Reinsurer means any person, firm, association or corporation duly licensed in this state pursuant to the applicable provisions of this title as an insurer with the authority to assume reinsurance; and   To be in violation means that the reinsurance intermediary, insurer, or reinsurer for whom the reinsurance intermediary was acting failed to substantially comply with this part.   
  No person, firm, association or corporation shall act as an RB in this state if the RB maintains an office either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation:  In this state, unless the RB is a licensed producer in this state; or   In another state, unless the RB is a licensed producer in this state or another state having a law substantially similar to this law or the RB is licensed in this state as a nonresident reinsurance intermediary.     No person, firm, association or corporation shall act as an RM:  For a reinsurer domiciled in this state, unless the RM is a licensed producer in this state;   In this state, if the RM maintains an office either directly or as a member or employee of a firm or association, or an officer, director or employee of a corporation in this state, unless the RM is a licensed producer in this state; or   In another state for a nondomestic insurer, unless the RM is a licensed producer in this state or another state having a law substantially similar to this law, or the person is licensed in this state as a nonresident reinsurance intermediary.     The commissioner may require an RM subject to subsection (b) to:  File a bond in an amount from an insurer acceptable to the commissioner for the protection of the reinsurer; and   Maintain an errors and omissions policy in an amount acceptable to the commissioner.     The commissioner may issue a reinsurance intermediary license to any person, firm, association or corporation who has complied with the requirements of this part, subject to the following:  The license issued to a firm or association will authorize all the members of the firm or association and any designated employees to act as reinsurance intermediaries under the license, and all those persons shall be named in the application and any supplements to the application. The license issued to a corporation shall authorize all of the officers and any designated employees and directors of the corporation to act as reinsurance intermediaries on behalf of the corporation, and all those persons shall be named in the application and any supplements to the application; and   If the applicant for a reinsurance intermediary license is a nonresident, the applicant, as a condition precedent to receiving or holding a license, shall designate the commissioner as agent for service of process in the manner, and with the same legal effect, provided for by this part for designation of service of process upon unauthorized insurers; and also shall furnish the commissioner with the name and address of a resident of this state upon whom notices or orders of the commissioner or process affecting the nonresident reinsurance intermediary may be served. Such licensee shall promptly notify the commissioner in writing of every change in its designated agent for service of process, and such change shall not become effective until acknowledged by the commissioner.     The commissioner may refuse to issue a reinsurance intermediary license if, in the judgment of the commissioner, the applicant, anyone named on the application, or any member, principal, officer or director of the applicant is not trustworthy, or any controlling person of the applicant is not trustworthy to act as a reinsurance intermediary, or any of the foregoing has given cause for revocation or suspension of the license, or has failed to comply with any prerequisite for the issuance of the license. Upon written request, the commissioner will furnish a summary of the basis for refusal to issue a license, which document shall be privileged and not subject to the requirements of title 10, chapter 7.   Licensed attorneys at law of this state when acting in their professional capacity as attorneys are exempt from this section.   
 Transactions between an RB and the insurer the RB represents in that capacity shall only be entered into pursuant to a written authorization specifying the responsibilities of each party. The authorization shall, at a minimum, provide that:   The insurer may terminate the RB's authority at any time;   The RB will render accounts to the insurer accurately detailing all material transactions, including information necessary to support all commissions, charges, and other fees received by, or owing to, the RB, and remit all funds due to the insurer within thirty (30) days of receipt;   All funds collected for the insurer's account will be held by the RB in a fiduciary capacity in a bank that is a qualified United States financial institution as defined in  56-6-802;   The RB will comply with  56-6-805;   The RB will comply with the written standards established by the insurer for the cession or retrocession of all risks; and   The RB will disclose to the insurer any relationship with any reinsurer to which business will be ceded or retroceded.   
  For at least ten (10) years after expiration of each contract of reinsurance transacted by the RB, the RB will keep a complete record for each transaction showing:  The type of contract, limits, underwriting restrictions, classes of risks and territory;   Period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation;   Reporting and settlement requirements of balances;   Rate used to compute the reinsurance premium;   Names and addresses of assuming reinsurers;   Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the RB;   Related correspondence and memoranda;   Proof of placement;   Details regarding retrocessions handled by the RB including the identity of retrocessionaires and percentage of each contract assumed or ceded;   Financial records, including, but not limited to, premium and loss accounts; and   When the RB procures a reinsurance contract on behalf of a licensed ceding insurer:  Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or   If placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative.       The insurer will have access to, and the right to copy and audit, all accounts and records maintained by the RB related to its business in a form usable by the insurer.   
  An insurer shall not engage the services of any person, firm, association or corporation to act as an RB on its behalf unless the person is licensed as required by  56-6-803(a).   An insurer may not employ an individual who is employed by an RB with which it transacts business, unless the RB is under common control with the insurer and subject to chapter 11 of this title.   The insurer shall annually obtain a copy of a statement of the financial condition of each RB with which it transacts business.   
 Transactions between an RM and the reinsurer it represents in that capacity shall only be entered into pursuant to a written contract, specifying the responsibilities of each party, which shall be approved by the reinsurer's board of directors. At least thirty (30) days before the reinsurer assumes or cedes business through the producer, a true copy of the approved contract shall be filed with the commissioner for approval. The contract shall, at a minimum, provide that:   The reinsurer may terminate the contract for cause upon written notice to the RM. The reinsurer may immediately suspend the authority of the RM to assume or cede business during the pendency of any dispute regarding the cause for termination;   The RM will render accounts to the reinsurer accurately detailing all material transactions, including information necessary to support all commissions, charges and other fees received by or owing to the RM, and remit all funds due under the contract to the reinsurer on not less than a monthly basis;   All funds collected for the reinsurer's account will be held by the RM in a fiduciary capacity in a bank that is a qualified United States financial institution. The RM may retain no more than three (3) months' estimated claims payments and allocated loss adjustment expenses. The RM shall maintain a separate bank account for each reinsurer that it represents;   For at least ten (10) years after expiration of each contract of reinsurance transacted by the RM, the RM will keep a complete record for each transaction showing:  The type of contract, limits, underwriting restrictions, classes or risks and territory;   Period of coverage, including effective and expiration dates, cancellation provisions and notice required of cancellation, and disposition of outstanding reserves on covered risks;   Reporting and settlement requirements of balances;   Rate used to compute the reinsurance premium;   Names and addresses of reinsurers;   Rates of all reinsurance commissions, including the commissions on any retrocessions handled by the RM;   Related correspondence and memoranda;   Proof of placement;   Details regarding retrocessions handled by the RM, as permitted by  56-6-808, including the identity of retrocessionaires and percentage of each contract assumed or ceded;   Financial records, including, but not limited to, premium and loss accounts; and   When the RM places a reinsurance contract on behalf of a ceding insurer:   Directly from any assuming reinsurer, written evidence that the assuming reinsurer has agreed to assume the risk; or   If placed through a representative of the assuming reinsurer, other than an employee, written evidence that the reinsurer has delegated binding authority to the representative;       The reinsurer will have access to and the right to copy all accounts and records maintained by the RM related to its business in a form usable by the reinsurer;   The contract cannot be assigned in whole or in part by the RM;   The RM will comply with the written underwriting and rating standards established by the insurer for the acceptance, rejection or cession of all risks;   The rates, terms and purposes of commissions, charges and other fees that the RM may levy against the reinsurer are set forth;   If the contract permits the RM to settle claims on behalf of the reinsurer:  All claims will be reported to the reinsurer in a timely manner;   A copy of the claim file will be sent to the reinsurer at its request or as soon as it becomes known that the claim:   Has the potential to exceed the lesser of an amount determined by the commissioner or the limit set by the reinsurer;   Involves a coverage dispute;   May exceed the RM's claims settlement authority;   Is open for more than six (6) months; or   Is closed by payment of the lesser of an amount set by the commissioner or an amount set by the reinsurer;     All claim files will be the joint property of the reinsurer and RM; however, upon an order of liquidation of the reinsurer, the files shall become the sole property of the reinsurer or its estate, and the RM shall have reasonable access to and the right to copy the files on a timely basis; and   Any settlement authority granted to the RM may be terminated for cause upon the reinsurer's written notice to the RM or upon the termination of the contract. The reinsurer may suspend the settlement authority during the pendency of the dispute regarding the cause of termination;     If the contract provides for a sharing of interim profits by the RM, that the interim profits will not be paid until one (1) year after the end of each underwriting period for property business and five (5) years after the end of each underwriting period for casualty business, or a later period set by the commissioner for specified lines of insurance, and not until the adequacy of reserves on remaining claims has been verified pursuant to  56-6-809(c);   The RM will annually provide the reinsurer with a statement of its financial condition prepared by an independent certified accountant;   The reinsurer will periodically, at least semi-annually, conduct an on-site review of the underwriting and claims processing operations of the RM;   The RM will disclose to the reinsurer any relationship it has with any insurer prior to ceding or assuming any business with the insurer pursuant to this contract; and   Within the scope of its actual or apparent authority, the acts of the RM shall be deemed to be the acts of the reinsurer on whose behalf it is acting.   
 The RM shall not:   Cede retrocessions on behalf of the reinsurer, except that the RM may cede facultative retrocessions pursuant to obligatory facultative agreements if the contract with the reinsurer contains reinsurance underwriting guidelines for the retrocessions. The guidelines shall include a list of reinsurers with which the automatic agreements are in effect, and for each reinsurer, the coverages and amounts or percentages that may be reinsured and commission schedules;   Commit the reinsurer to participate in reinsurance syndicates;   Appoint any producer without assuring that the producer is lawfully licensed to transact the type of reinsurance for which the producer is appointed;   Without prior approval of the reinsurer, pay or commit the reinsurer to pay a claim, net of retrocessions, that exceeds the lesser of an amount specified by the reinsurer or one percent (1%) of the reinsurer's policyholders' surplus as of December 31 of the last complete calendar year;   Collect any payment from a retrocessionaire or commit the reinsurer to any claim settlement with a retrocessionaire, without prior approval of the reinsurer. If prior approval is given, a report must be promptly forwarded to the reinsurer;   Jointly employ an individual who is employed by the reinsurer unless the RM is under common control with the reinsurer subject to the Insurance Holding Company Act, compiled in chapter 11 of this title; or   Appoint a sub-RM.   
  A reinsurer shall not engage the services of any person, firm, association or corporation to act as an RM on its behalf unless the person is licensed as required by  56-6-803(a).   The reinsurer shall annually obtain a copy of statements of the financial condition of each RM that the reinsurer has engaged prepared by an independent certified accountant in a form acceptable to the commissioner.   If an RM establishes loss reserves, the reinsurer shall annually obtain the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the RM. This opinion shall be in addition to any other required loss reserve certification.   Binding authority for all retrocessional contracts of participation in reinsurance syndicates shall rest with an officer of the reinsurer who shall not be affiliated with the RM.   Within thirty (30) days of termination of a contract with an RM, the reinsurer shall provide written notification of the termination to the commissioner.   A reinsurer shall not appoint to its board of directors any officer, director, employee, controlling shareholder or subproducer of its RM. This subsection (f) shall not apply to relationships governed by chapter 11 of this title.   
 A reinsurance intermediary shall be subject to examination by the commissioner. The commissioner shall have access to all books, bank accounts and records of the reinsurance intermediary in a form usable to the commissioner.  
  A reinsurance intermediary, insurer or reinsurer found by the commissioner, after a hearing conducted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to be in violation of this part, shall:  For each separate violation, pay a penalty in an amount not exceeding five thousand dollars ($5,000);   Be subject to revocation or suspension of its license; and   If a violation was committed by the reinsurance intermediary, the reinsurance intermediary shall make restitution to the insurer, reinsurer, rehabilitator or liquidator of the insurer or reinsurer for the net losses incurred by the insurer or reinsurer attributable to the violation.     The decision, determination or order of the commissioner pursuant to subsection (a) shall be subject to judicial review in accordance with the Uniform Administrative Procedures Act.   Nothing contained in this section shall affect the right of the commissioner to impose any other penalties provided in this title.   Nothing contained in this part is intended to or shall in any manner limit or restrict the rights of policyholders, claimants, creditors or other third parties or confer any rights to those persons.   
 The commissioner may adopt reasonable rules and regulations for the implementation and administration of this part.  
  This part shall be known and may be cited as the Tennessee Public Adjuster Licensing Act of 2006.   This part governs the qualifications and procedures for the licensing of public adjusters. It specifies the duties of and restrictions on public adjusters, which include limiting their licensure to assisting insureds in first party claims.   
 As used in this part, unless the context otherwise requires:   Catastrophic disaster means an event that results in large numbers of deaths and injuries, causes extensive damage or destruction of facilities that provide and sustain human needs, produces an overwhelming demand on state and local response resources and mechanisms, causes a severe long-term effect on general economic activity, and severely affects state, local and private sector capabilities to begin and sustain response activities. A catastrophic disaster shall be a single occurrence that damages twenty-five (25) or more residential dwellings;   Commissioner means the commissioner of commerce and insurance;   Fingerprints means an impression of the lines on the finger taken for purpose of identification. The impression may be electronic or in ink converted to electronic format;   Home state means the District of Columbia and any state or territory of the United States in which the public adjuster's principal place of residence or principal place of business is located. If neither the state in which the public adjuster maintains the principal place of residence nor the state in which the public adjuster maintains the principal place of business has a substantially similar law governing public adjusters, the public adjuster may declare another state in which it becomes licensed and acts as a public adjuster to be the home state;   Individual means a natural person;   NAIC means the National Association of Insurance Commissioners;   Person means an individual or a business entity;    Public adjuster means any person, other than someone who is employed by an insurance carrier, who, for compensation or any other thing of value, on behalf of the insured:   Acts or aids, solely in relation to first party claims arising under insurance contracts that insure the real or personal property of the insured on behalf of an insured, in investigating, verifying, substaining, estimating, appraising, determining, presenting, and discussing the value of the claim, and effectuating the resolution of a claim for loss or damage covered by an insurance contract;   Advertises for employment as a public adjuster of insurance claims or solicits business or represents to the public to be a public adjuster of first party insurance claims, for losses or damages arising out of policies of insurance that insure real or personal property; or   Directly or indirectly solicits business, investigates or adjusts losses, or advises an insured about first party claims for losses or damages arising out of policies of insurance that insure real or personal property for another person engaged in the business of adjusting losses or damages covered by an insurance policy, for the insured;     Nothing in this part, nor the regulations adopted under this part shall:   Authorize any public adjuster or person operating at the direction of a public adjuster to engage in conduct that is law practice or law business as defined in title 23, chapter 3 or under the rules of the Tennessee supreme court;   Apply to a person who is employed by, or under contract to, an insurance company; or   Affect or alter, in any way, the contractual obligations on an insured to their insurance company and the duty of good faith each owes the other;       Uniform business entity application means the current version of the NAIC uniform business entity application for resident and nonresident business entities; and   Uniform individual application means the current version of the NAIC uniform individual application for resident and nonresident individuals.   
  No person shall act or hold out as being a public adjuster as defined in  56-6-902, unless licensed as a public adjuster in accordance with this part.   A person licensed as a public adjuster shall not misrepresent to a claimant that the person is an adjuster acting on behalf of or aiding an insurer in any capacity, including acting as an employee of the insurer or acting as an independent adjuster, unless so appointed by an insurer in writing to act on the insurer's behalf for that specific claim or purpose.   A business entity acting as a public adjuster is required to obtain a public adjuster license. Application shall be made using the uniform business entity application. Before approving the application, the commissioner shall find that:  The business entity has paid the fees set forth in the rule promulgated under  56-6-905(a)(5); and   The business entity has designated a licensed public adjuster responsible for the business entity's compliance with the insurance laws, rules and regulations of this state.     Notwithstanding this section, a license as a public adjuster shall not be required of the following:  An attorney at law admitted to practice in this state, or an employee of the attorney acting under the attorney's supervision;   A person who negotiates or settles claims arising under a life or health insurance policy or an annuity contract;   A person employed only for the purpose of obtaining facts surrounding a loss, or furnishing technical assistance to a licensed public adjuster, including, but not limited to, photographers, contractors, appraisers of value, private investigators, engineers and handwriting experts;   A licensed health care provider, or employee of a licensed health care provider, who prepares or files a health claim form on behalf of a patient;   A person who settles subrogation claims between insurers; or   A person who is employed by, or under contract to, an insurance company.     
  A person applying for a public adjuster license shall make application to the commissioner on the appropriate uniform application or other application prescribed by the commissioner.   The applicant shall declare, under penalty of perjury and under penalty of refusal, suspension or revocation of the license, that the statements made in the application are true, correct and complete to the best of the applicant's knowledge and belief.   In order to make a determination of license eligibility, the commissioner is authorized to require fingerprints of applicants and submit the fingerprints and the fee required to perform the criminal history record checks to the Tennessee bureau of investigation (TBI) and the federal bureau of investigation (FBI) for state and national criminal history record checks. The commissioner shall require a criminal history record check on each applicant in accordance with this part. The commissioner shall require each applicant to submit a full set of fingerprints in order for the commissioner to obtain and receive national criminal history records from the FBI criminal justice information services division.  The commissioner may contract for the collection, transmission and resubmission of fingerprints required under this section. If the commissioner does so, the fee for collecting, transmitting and retaining fingerprints shall be payable directly to the contractor by the applicant. The commissioner may agree to a reasonable fingerprinting fee to be charged by the contractor.   The commissioner may waive submission of fingerprints by any person that has previously furnished fingerprints and maintains fingerprints on file with the central repository of the NAIC, its affiliates or subsidiaries.   The commissioner is authorized to submit electronic fingerprint records and necessary identifying information to the NAIC, its affiliates or subsidiaries, for permanent retention in a centralized repository. The purpose of a centralized repository is to provide insurance commissioners with access to fingerprint records, in order to perform criminal history record checks.     
  Before issuing a public adjuster license to an applicant under this part, the commissioner shall find that the applicant:  Is eligible to designate this state as the applicant's home state or is eligible for a license pursuant to  56-6-908;   Has not committed any act that is a ground for denial, suspension or revocation of a license as set forth in  56-6-910;   Is trustworthy, reliable, and of good reputation;   Is financially responsible to exercise the license, and has provided proof of financial responsibility as required in  56-6-911;   Has paid the fees set forth by rule or regulation of the commissioner; and   Maintains an office in the applicant's home state of residence, with public access by reasonable appointment or regular business hours, or both.     In addition to satisfying the requirements of subsection (a), unless exempted pursuant to this part, an individual shall:  Be at least eighteen (18) years of age;   Have successfully passed the public adjuster examination;   Designate a licensed individual public adjuster responsible for the business entity's compliance with the insurance laws, rules, and regulations of this state; and   Designate only licensed individual public adjusters to exercise the business entity's license.     The commissioner may require any documents reasonably necessary to verify the information contained in the application.   
  An individual applying for a public adjuster license under this part shall pass a written examination, unless exempt pursuant to  56-6-907. The examination shall test the knowledge of the individual concerning the duties and responsibilities of a public adjuster and the insurance laws and regulations of this state. Examinations required by this section shall be developed and conducted under rules and regulations prescribed by the commissioner.   The commissioner may make arrangements, including contracting with an outside testing service, for administering examinations and collecting a nonrefundable fee in an amount set forth by rule by the commissioner.   Each individual applying for an examination shall remit a nonrefundable fee as prescribed by the commissioner, in an amount set by rule promulgated by the commissioner.   An individual who fails to appear for the examination as scheduled, or fails to pass the examination, shall reapply for an examination and remit all required fees and forms before being rescheduled for another examination.   
  An individual who applies for a public adjuster license in this state who was previously licensed as a public adjuster in another state based on a public adjuster examination shall not be required to take or complete any prelicensing examination. This exemption is only available if the individual is currently licensed in that state, or if the application is received within twelve (12) months of the cancellation or termination of the applicant's previous license, and:  The prior state issues a certification that, at the time of cancellation or termination, the applicant was in good standing in that state or the state's producer database records; or   Records maintained by the NAIC, its affiliates or subsidiaries, indicate that the public adjuster is or was licensed in good standing at the time of cancellation or termination.     A person licensed as a public adjuster in another state, based on a public adjuster examination, who moves to this state shall make application within ninety (90) days of establishing legal residence to become a resident licensee, pursuant to  56-6-905. No prelicensing examination shall be required of that person to obtain a public adjuster license.   An individual who applies for a public adjuster license in this state who was previously licensed as a public adjuster in this state shall not be required to complete any prelicensing examination. This exemption is only available if the application is received within twelve (12) months of the cancellation or termination of the applicant's previous license in this state, and if, at the time of cancellation or termination, the applicant was in good standing in this state.   
  Unless denied licensure pursuant to  56-6-910, a nonresident person shall receive a nonresident public adjuster license, if:  The person is currently licensed as a resident public adjuster and in good standing in the person's home state;   The person has submitted the proper request for licensure, has paid the fees required by the rule promulgated under  56-6-905(a)(5), and has provided proof of financial responsibility as required in  56-6-911;   The person has submitted, or transmitted to the commissioner, the appropriate completed application for licensure;   The person's home state has adopted a public adjuster licensing act, that is substantially similar to this part; and   The nonresident public adjuster representing an insured in this state remains reasonably available for communications with the insured and the insurance carrier.     The commissioner may verify the public adjuster's licensing status through the producer database maintained by the NAIC, its affiliates or subsidiaries.   As a condition to continuation of a public adjuster license issued under this section, the licensee shall maintain a resident public adjuster license in the licensee's home state. The nonresident public adjuster license issued under this section shall terminate and be surrendered immediately to the commissioner, if the home state public adjuster license terminates for any reason, unless the public adjuster has been issued a license as a resident public adjuster in the adjuster's new home state. The licensed nonresident public adjuster shall provide prompt notification of the new home state license to the state or states that have issued the nonresident license. This notification shall include the licensee's new and old addresses. A new state resident license is required for nonresident licenses to remain valid. The new state resident license must have reciprocity with the licensing nonresident state or states, for the nonresident license not to terminate.   
  Unless denied licensure under this part, persons who have met the requirements of this part shall be issued a public adjuster license.   A public adjuster license shall remain in effect for a period of two (2) years, unless revoked, terminated or suspended. The commissioner may renew a license issued under this part, as long as the request for renewal and fee set forth in the rule promulgated under  56-6-905(a)(5) is paid and any other requirements for license renewal are met by the date of the license's expiration.   The licensee shall inform the commissioner, by any means acceptable to the commissioner, of a change of address, change of legal name, or change of material information submitted on the application within thirty (30) days of the change.   A licensed public adjuster shall be subject to chapters 8 and 53 of this title.    A public adjuster who allows the adjuster's license to lapse may, within twelve (12) months from the date of expiration, be issued a new public adjuster license upon the commissioner's receipt of the request for renewal. However, a penalty in the amount of double the unpaid renewal fee shall be required, and be subject to other penalties as provided by law, before the license will be renewed.   If the commissioner receives the request for reinstatement and the required lapsed license fee within sixty (60) days of the date the license lapsed, the commissioner shall reinstate the license retroactively to the date the license lapsed. If the commissioner receives the request for reinstatement and the required lapsed license fee after sixty (60) days, but within one (1) year of the date the license lapsed, the commissioner shall reinstate the license prospectively with the date the license is reinstated. If the person applies for reinstatement more than one (1) year from date of lapse, the person shall reapply for the license under this part.     A licensed public adjuster that is unable to comply with license renewal procedures due to military service, a long-term medical disability, or some other extenuating circumstance, may request a waiver of those procedures. The public adjuster also may request a waiver of any examination requirement, fine, or other sanction imposed for failure to comply with renewal procedures.   The license shall contain the licensee's name, city and state of business address, personal identification number, the date of issuance, the expiration date, and any other information the commissioner deems necessary.   In order to assist in the performance of the commissioner's duties, the commissioner may contract with nongovernmental entities, including, but not limited to the NAIC or any affiliates or subsidiaries that the NAIC oversees, to perform any functions, including testing and the collection of fees and data, related to licensing, that the commissioner may deem appropriate.   
  The commissioner may place on probation, cancel, terminate, suspend, revoke or refuse to issue or renew a public adjuster's license, or may levy a civil penalty, in accordance with this section, or any combination of actions, for any one (1) or more of the following causes:  Providing materially incorrect, misleading, incomplete, or untrue information in the license application;   Violating any laws administered by the commissioner, or violating lawful regulations, or final orders of the commissioner or of another state's insurance commissioner;   Obtaining or attempting to obtain a license through misrepresentation or fraud;   Improperly withholding, misappropriating, or converting to the licensee's own use any moneys or properties received in the course of conducting business under this license;   Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;   Having been convicted of a felony or other offense involving dishonesty, fraud, deceit or misrepresentation, in a final decision of a court of competent jurisdiction;   Having committed any insurance unfair trade practice or insurance fraud prohibited under chapters 8 and 53 of this title;   Using fraudulent, coercive or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this state or elsewhere;   Having an insurance producer license, or its equivalent, suspended or revoked in any other state, province, district or territory;   Forging another's name to an application for insurance or to any document related to an insurance transaction;   Cheating on an examination for an insurance license;   Knowingly accepting insurance business from an individual who is not licensed by the commissioner but who is required to be so licensed;   Allowing a person not licensed under this part to perform actions requiring licensure under this part;   Failing to comply with a final administrative or court order imposing a child support obligation; or   Failing to notify the insured, verbally and in writing, of the statutory requirements of this part, as they pertain to solicitation, contracting, and recission and the timeframes contained in this part.     Any action by the commissioner to put on probation, suspend, revoke or deny the renewal of a license pursuant to this part shall be governed by the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   In the event that the action of the commissioner is to deny an application for a license, the commissioner shall notify the applicant and advise, in writing, the applicant of the denial of the applicant's application within thirty (30) days.   The license of a business entity may be suspended, revoked or refused, if the commissioner finds that an individual's violation was known or should have been known by one (1) or more of the partners, officers or managers acting on behalf of the business entity, and the violation was not timely reported to the commissioner and corrective action was not taken.   In addition to, or in lieu of, any applicable denial, suspension, cancellation, termination, or revocation of a license, a person may, after a hearing, be subject to a civil penalty in an amount not less than one hundred dollars ($100), nor more than one thousand dollars ($1,000), for each separate violation of the grounds in subsection (a). Each day of continued violation shall constitute a separate violation.   The commissioner shall retain the authority to enforce this part and impose any penalty or remedy authorized by this part, or any other provision of this title against any person who is under investigation for or charged with a violation of this part, even if the person's license or registration has been surrendered or has lapsed by operation of law.   The commissioner may serve a notice or order in any action arising under this part by registered or certified mail to the public adjuster or applicant at the address of record on file with the commissioner. Notwithstanding any law to the contrary, service in the manner set forth in this subsection (g) shall be deemed to constitute actual service on the public adjuster or applicant.   
 Prior to issuance of a license as a public adjustor, and for the duration of the license, the applicant shall secure evidence of financial responsibility in a format prescribed by the commissioner through a surety bond and an errors and omissions insurance policy, or other security satisfactory to the department of insurance.   A surety bond executed and issued by an insurer authorized to issue surety bonds in this state shall:  Be in the minimum amount of fifty thousand dollars ($50,000);   Be in favor of this state and shall specifically authorize recovery by the commissioner on behalf of any person in this state who sustained damages as the result of erroneous acts, failure to act, conviction of fraud, or conviction of unfair practices in the capacity as a public adjuster;   Not be terminated, unless at least thirty-days' prior written notice has been filed with the commissioner and given to the licensee; and   Be in a form approved by the commissioner.     The licensed public adjuster shall promptly notify the commissioner upon termination of the bond, unless otherwise directed by the commissioner.   The commissioner may ask for the evidence of financial responsibility at any time the commissioner deems it necessary and proper to protect the rights of Tennessee consumers.   The authority to act as a public adjuster shall automatically terminate if the evidence of financial responsibility terminates or becomes substantially impaired.   The errors and omissions policy shall be executed by and issued by an admitted insurer authorized to issue errors and omissions policies in this state, and shall be in the minimum amount of five hundred thousand dollars ($500,000) per occurrence.   
  An individual, who holds a public adjuster license and who is not exempt under subsection (b), shall satisfactorily complete a minimum of twenty-four (24) hours of continuing education courses, including ethics, reported on a biennial basis in conjunction with the license renewal cycle. The education required by this section shall be in addition to any other continuing education requirements required for other professional licenses held by the individuals licensed under this part.   This section shall not apply to:  Licensees not licensed for one (1) full year prior to the end of the applicable continuing education biennium; or   Licensees holding nonresident public adjuster licenses who have met the continuing education requirements of their home state and whose home state gives credit to residents of this state on substantially the same basis.     Except as set forth in subsection (b), only continuing education courses approved by the commissioner shall be used to satisfy the continuing education requirement of subsection (a).   
  A public adjuster may charge the insured a reasonable fee. If a contract between the public adjuster and the insured is formed before the insurance carrier has made an offer of settlement, then the public adjuster may not charge a fee that is greater than fifteen percent (15%) of the total proceeds of the insurance settlement. If a contract between the public adjuster and the insured is formed after the insurance carrier has made an offer of settlement, then the public adjuster may not charge any more than twenty-five percent (25%) of the difference between the insurance company's last offer to the insured prior to the public adjuster contract with that insured and the last offer after the public adjuster entered a contract with the insured and negotiated, if any, additional settlement proceeds. If the insured has obtained a home mortgage in the amount of one hundred percent (100%) of the appraised value of the home, then a public adjuster may charge a fee not to exceed ten percent (10%) of the total proceeds of an insurance settlement that is a total loss of the home, which shall be deemed to be a policy limit payment, occurring during a catastrophic disaster within the first twelve (12) months of the term of the home mortgage. This limitation applies regardless of when a contract is entered into between the public adjuster and the insured; provided, however, that a public adjuster shall charge no fee on any advance payment prior to the contract between the insured and the public adjuster to the insured. Nothing in this subsection (a) prohibits a public adjuster from charging a variation of fees, so long as those fees do not exceed the amounts prescribed in this subsection (a). This subsection (a) shall not apply to commercial insurance.   A public adjuster shall not pay a commission, service fee or other valuable consideration to a person for investigating, resolving or working in connection with, claims in this state, if that person is required to be licensed under this part and is not so licensed.   A public adjuster shall not accept a commission, service fee or other valuable consideration for investigating or settling claims in this state, if the adjuster is required to be licensed under this part and is not so licensed.   No public adjuster shall require, demand or accept any fee, retainer, compensation, deposit, or other thing of value, prior to settlement of a claim.   
  Public adjusters shall ensure that all contracts for their services are in writing and contain the following terms:  Legible full name of the adjuster signing the contract, as reflected in the records on file with the commissioner;   Permanent home state business address and phone number;   Tennessee public adjuster license number;   Title of Public Adjuster Contract or its substantial equivalent;   The insured's full name, street address, insurance company name and policy number, if known;   A description of the loss and its location, if applicable;   Description of services to be provided to the insured;   Signatures of the public adjuster and the insured;   Date contract was signed by the public adjuster and date the contract was signed by the insured;   Attestation language stating that the public adjuster is fully bonded pursuant to this part; and    Full salary, fee, commission, compensation or other considerations the public adjuster is to receive for services. If the compensation is based on a share of the insurance settlement, the exact percentage shall be specified. Initial expenses to be reimbursed to a public adjuster from the proceeds of the claim payment shall be specified by type, with dollar estimates set forth in the contract and with any additional expenses to first be approved by the insured;   Compensation provisions in a public adjusting contract shall not be redacted in any copy of the contract provided to the commissioner.       If the insurer, not later than seventy-two (72) hours after the date on which the loss is reported to the insurer, either pays or commits in writing to pay to the insured the policy limit of the insurance policy, the public adjuster shall:  Not receive a commission consisting of a percentage of the total amount paid by an insurer to resolve a claim;   Inform the insured that the amount of any recovery amount might not be increased; and   Be entitled only to reasonable compensation from the insured for services provided by the public adjuster on behalf of the insured, based on the time spent on a claim and expenses incurred by the public adjuster, until the claim is paid or the insured receives a written commitment to pay from the insurer.     A public adjuster shall provide the insured a written disclosure concerning any direct or indirect financial interest that the public adjuster has with any other party who is involved in any aspect of the claim, other than the salary, fee, commission or other consideration established in the written contract with the insured, including, but not limited to, any ownership, other than as a minority stockholder, in a publicly traded entity, or any compensation expected to be received from any construction firm, building appraisal firm, motor vehicle repair shop, or any other firm that provides estimates for work, or that performs any work, in conjunction with damages caused by the insured's loss on which the public adjuster is engaged. Firm includes any corporation, partnership, association, joint-stock company or person.   A public adjuster contract may not contain any contract term that:  Allows the public adjuster's percentage fee to be collected when money is due from an insurance company but not paid, or that allows a public adjuster to collect the entire fee from the first check issued by an insurance company, rather than as percentage of each check issued by an insurance company;   Requires or requests the public adjuster's name on the issuance of the check;   Imposes collection costs or late fees in violation of Tennessee law; or   Precludes an insured from pursuing civil remedies.     Prior to the signing of the contract, the public adjuster shall provide the insured with a separate disclosure document regarding the claim process that states:  An insured is obligated to present the insured's claim to an insurance company in the manner set forth in the insurance contract as required by law. The insured and the insurer shall act in good faith toward the other as required by law. There are three (3) types of adjusters that could be involved in that process. The definitions of the three (3) types are as follows:  Company adjuster means the insurance adjusters that are employees of an insurance company. The adjusters are paid by the insurance company and will not charge the insured a fee;   Independent adjuster means the insurance adjusters that are hired on a contract basis by an insurance company in the settlement of the claim. The adjusters are paid by the insured's insurance company and will not charge the insured a fee; and   Public adjuster means the insurance adjusters that do not work for any insurance company. The adjusters work for the insured in connection with the insured's claim against the insured's insurance carrier. The insured hires the adjusters by signing a contract agreeing to pay the adjusters a fee or commission based on a percentage of the settlement, or other method of compensation;     The insured is not required to hire a public adjuster to help the insured meet the insured's obligations under the policy, but has a right to do so;   The insured has the right to initiate direct communications with the insured's attorney, the insurer, the insurer's adjuster, and the insurer's attorney, or any other person regarding the settlement of the insured's claim;   The public adjuster is not a representative or employee of the insurer;   The salary, fee, commission or other consideration is the obligation of the insured, not the insurer; and   An insurance company has the right to communicate with its insured, even if the insured has hired a public adjuster; but, if requested by the insured, the insurance company will make a concerted effort to include the public adjuster in communications with the insured.     The insured shall be given a copy or the original of the contract with the public adjuster. The public adjuster's original contract, or a copy, shall be available at all times for inspection, without notice, by the commissioner.   The public adjuster shall provide the insurer a notification letter, which has been signed by the insured, authorizing the public adjuster to represent the insured's interest.   The insured has the right to rescind the contract within three (3) business days after the date the contract was signed. The rescission shall be in writing and mailed or delivered to the public adjuster at the public adjuster's address in the contract within the three-business-day period.   If the insured exercises the right to rescind the contract, anything of value given by the insured to the public adjuster under the contract shall be returned to the insured within three (3) business days following the receipt by the public adjuster of the cancellation notice.   Nothing in this part shall prevent a public adjuster from requesting an insured to request the insurer to include the public adjuster's name as a payee on any check.   
 A public adjuster who receives, accepts or holds any funds on behalf of an insured, towards the settlement of a claim for loss or damage, shall deposit the funds in a noninterest-bearing escrow or trust account in a financial institution that is insured by an agency of the federal government in the insured's home state or in the state where the loss occurred.  
  A public adjuster shall maintain complete records of each transaction as a public adjuster. The records required by this section shall include the following:  Name of the insured;   Date, location and amount of the loss;   Copy of the contract between the public adjuster and insured;   Name of the insurer and, if available, amount, expiration date and number of each policy carried with respect to the loss;   Itemized statement of the insured's recoveries;   Itemized statement of all compensation received by the public adjuster, from any source whatsoever, in connection with the loss;   A register of all moneys received, deposited, disbursed, or withdrawn in connection with a transaction with an insured, including fees transfers and disbursements from a trust account and all transactions concerning all interest bearing accounts;   Name of public adjuster who executed the contract;   Name of the attorney representing the insured, if applicable, and the name of the claims representatives of the insurance company; and   Evidence of financial responsibility in a format prescribed by the commissioner.     Records of transactions as a public adjuster shall be maintained for at least five (5) years after the termination of the transaction with an insured and shall be open to examination by the commissioner at all times.   
  A public adjuster is obligated, under the public adjuster's license, to serve with objectivity and complete loyalty in the interest of the adjuster's client alone; and to render to the insured such information, counsel and service, as within the knowledge, understanding and opinion in good faith of the adjuster, as will best serve the insured's insurance claim needs and interest.   A public adjuster shall not solicit an insured for two (2) days after any loss and shall not contract with an insured for an additional three (3) days. For catastrophic losses, a public adjuster shall not solicit an insured for seven (7) days after the loss. This subsection (b) shall not apply to commercial insurance.   A public adjuster shall not permit an unlicensed employee or representative of the public adjuster to conduct business for which a license is required under this part.   A public adjuster shall not have a direct or indirect financial interest in any aspect of the claim, other than the salary, fee, commission or other consideration established in the written contract with the insured, unless full written disclosure has been made to the insured.   A public adjuster shall not refer or direct the insured to get needed repairs or services in connection with a loss from any person with whom the public adjuster has a financial interest, or from whom the public adjuster may receive direct or indirect compensation for the referral, unless the interest or compensation is disclosed to the insured.   A public adjuster shall not, directly or indirectly, buy or obtain for resale or other remuneration, any salvage of the insured that is subject to a claim upon which the public adjuster is or has worked.   A public adjuster shall disclose to an insured if the adjuster has any interest or will be compensated by any construction firm, building appraisal firm, motor vehicle repair shop or any other firm that performs any work in conjunction with damages caused by the insured loss. Firm includes any individual corporation, partnership, association, joint-stock company or legal entity.   Any compensation or anything of value in connection with an insured's specific loss that will be received by a public adjuster shall be disclosed by the public adjuster to the insured in writing, including the source and amount of the compensation.   A public adjuster may not agree to any loss settlement without the insured's knowledge and consent.   Public adjusters shall adhere to the following general ethical requirements:  A public adjuster shall not undertake the adjustment of any claim, if the public adjuster is not sufficiently competent and knowledgeable as to the terms and conditions of the insurance coverage so as to properly discharge the duties as public adjuster, or that otherwise exceeds the public adjuster's current expertise;   A public adjuster shall not knowingly make any oral or written material misrepresentations or statements to any insured client or potential insured client that are false or maliciously critical and intended to injure any person engaged in the business of insurance;   No public adjuster, while so licensed by the commissioner, may represent or act as a company adjuster or independent adjuster on the same claim;   The contract shall not be construed to prevent an insured from pursuing any civil remedy after the three-business-day revocation or cancellation period;   A public adjuster shall not enter into a contract or accept a power of attorney that vests in the public adjuster the effective authority to choose the persons who shall repair the insured's property; and   A public adjuster shall ensure that all contracts for the public adjuster's services are in writing and set forth all material terms and conditions of the engagement.     
  A public adjuster shall report to the commissioner any administrative action taken against the public adjuster in another jurisdiction or by another governmental agency in this state within thirty (30) days of the final disposition of the matter. This report shall include a copy of the order, consent to order, or other relevant legal documents.   Within thirty (30) days of arraignment or other formal presentment of charges and entry of plea, a public adjuster shall report to the commissioner any prosecution of the public adjuster for a felony taken in any jurisdiction. The report shall include a copy of the initial complaint filed, the order resulting from the hearing, and any other relevant legal documents necessary to explain the charges brought against the public adjuster.   
 The commissioner may make investigations necessary for the proper administration of this part. For the purpose of making investigations, the commissioner shall have inquisitorial powers and shall be empowered to subpoena witnesses and examine them under oath; provided, that all testimony, documents and other evidence obtained by the commissioner pursuant to this section shall be absolutely privileged and shall not be admissible as evidence in any private civil proceeding. Notwithstanding this section, the adjuster may request and obtain from the department a copy of any charges brought against the adjuster, or if no charges have been filed, a written notice of the alleged violation.  
 The commissioner may promulgate regulations as are necessary or proper to carry out the purposes of this part. These regulations may include provisions relating to the assessment of licensure fees reasonable to defray the costs of examinations and testing of public adjusters. The commissioner shall keep a separate accounting of fees and costs to administer this part, and no other fees generated under this chapter shall be used to administer this part.  
 This chapter shall be known and may be cited as the Preferred Provider Organization Transparency Act.  
 As used in this chapter:   Affiliate means an individual or entity that directly or indirectly through one (1) or more intermediaries, controls or is controlled by or is under common control with a contracting entity;   Contracting entity means any individual or entity that is engaged in the act of contracting with providers and that has entered into a provider network contract with a provider for the delivery of health care services. Contracting entity shall not include any self-funded employer-sponsored health insurance plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1001 et seq.). In addition, contracting entity shall not include any individual or entity that provides administrative services to a self-funded employer-sponsored health insurance plan; provided, however, that this exemption applies only to those administrative services performed for a self-funded employer-sponsored health insurance plan;   Control or controlled by or under common control with means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an individual or entity, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the individual or entity. Control is presumed to exist if any individual or entity, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten percent (10%) or more of the voting securities of any other individual or entity;   Covered individual means an individual who is covered under a health insurance plan;   Department means the department of commerce and insurance;   Discount medical plan organization means an entity that, in exchange for fees, dues, charges or other consideration, provides access for plan members to providers of medical services and the right to receive medical services from those providers at a discount;   Entity means a corporation, business trust, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency or instrumentality, or any other legal or commercial entity;   Health care services means services for the diagnosis, prevention, treatment or cure of a health condition, illness, injury or disease;    Health insurance plan means any hospital and medical expense incurred policy, nonprofit health care service plan contract, health maintenance organization subscriber contract or any other health care plan or arrangement that pays for or furnishes medical or health care services, whether by insurance or otherwise;   Health insurance plan does not include one (1) or more, or any combination of, the following:   Coverage only for accident, or disability income insurance;   Coverage issued as a supplement to liability insurance;   Liability insurance, including general liability insurance and automobile liability insurance;   Workers' compensation or similar insurance;   Automobile medical payment insurance;   Credit-only insurance;   Coverage for on-site medical clinics;   Coverage similar to subdivisions (9)(B)(i)-(vii) as specified in federal regulations issued pursuant to P.L. 104-191, under which benefits for medical care are secondary or incidental to other insurance benefits;   Dental or vision benefits;   Benefits for long-term care, nursing home care, home health care or community-based care;   Specified disease or illness coverage, hospital indemnity or other fixed indemnity insurance, or such other similar, limited benefits as are specified in regulations;   Medicare supplemental health insurance, as defined under  1882(g)(1) of the Social Security Act (42 U.S.C.  1395ss(g)(1));   Coverage supplemental to the coverage provided under 10 U.S.C.  1071 et seq.; or   Other similar limited benefit supplemental coverages;       Physician means any individual licensed as a chiropractic physician under title 63, chapter 4; a medical doctor under title 63, chapter 6; or an osteopathic physician under title 63, chapter 9;   Physician hospital organization means an organization that includes, but is not limited to, hospitals and physicians and that contracts with and provides administrative services to hospitals and physicians that have entered into or intend to enter into managed care arrangements;   Physician organization means an organization that contracts with and provides administrative services to physicians who have entered into managed care arrangements;   Provider means a physician, a physician organization or a physician hospital organization. Provider does not include a physician organization or physician hospital organization that leases or rents the physician organization's or physician hospital organization's network to a third party;   Provider network contract or provider agreement means a direct contract between a contracting entity and a provider for the delivery of health care services specifying the rights and responsibilities of the contracting entity and the provider in relation to access and payment for health care services to covered individuals; and   Third party means an organization that enters into a contract with a contracting entity or with another third party to gain access to a provider network contract. Third party also includes a contracting entity's subsidiaries and affiliates, except as provided in  56-60-103. Third party does not include any self-funded employer-sponsored health insurance plan regulated under the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1001 et seq.). In addition, third party does not include any individual or entity that provides administrative services to a self-funded employer-sponsored health insurance plan; provided, however, that this exemption applies only to those administrative services performed for a self-funded employer-sponsored health insurance plan.   
 This chapter does not apply:   In circumstances where access to the provider network contract is granted to an affiliate or a subsidiary of a contracting entity, or other entity if operating under the same brand licensee program as the contracting entity;   To a contract between a contracting entity and a discount medical plan organization; or   To the provision of any medical services for injuries covered by the Workers' Compensation Law, compiled in title 50, chapter 6.   
  Any individual or entity that commences business as a contracting entity shall register with the department within thirty (30) days of commencing business in this state unless the individual or entity is licensed by the department as an insurer or third party administrator. Any contracting entity not licensed by the department as an insurer or third party administrator shall register with the department within ninety (90) days of January 1, 2010. If a contracting entity fails to register with the department in compliance with this section, then the commissioner may assess penalties as set forth in  56-2-305(a)(1) or (a)(2).    Registration shall consist of the submission of the following information:  The official name of the contracting entity, including any doing business as (d/b/a) designations used in this state;   The mailing address and official telephone number for the contracting entity's principal headquarters;   The name and telephone number of the contracting entity's representative who will serve as the primary contact with the department; and   Any other information as requested by the department.     The information required by subdivision (b)(1) shall be submitted in written or electronic format, as prescribed by the department.     The department may impose a registration fee to defray the cost of administering this section.   
  A contracting entity shall only grant access to a provider's health care services and contractual discounts pursuant to the contracting entity's provider network contract if:  The provider network contract clearly and plainly authorizes the contracting entity to enter into an agreement with a third party allowing the third party to exercise the contracting entity's rights and responsibilities under the provider network contract as if the third party were the contracting entity; and   The third party accessing a provider's services and contractual discounts pursuant to the provider network contract is contractually obligated to comply with all applicable terms, limitations and conditions of the provider network contract.     A contracting entity that grants a third party access to a provider's health care services and contractual discounts pursuant to a provider network contract shall:  Identify and supply to a provider, upon request at the time a provider network contract is entered into with the provider, a written or electronic list of all third parties known at the time of contracting to which the contracting entity has or will grant access to the provider's health care services and contractual discounts pursuant to the provider network contract;   Maintain an Internet web site or a toll-free telephone number through which a provider may obtain a listing, updated at least quarterly, of the third parties to which the contracting entity or another third party has executed contracts to grant access to the provider's health care services and contractual discounts pursuant to the provider network contract;   Provide each third party who contracts with the contracting entity to gain access to the provider network contract a summary of the contracting entity's current standard provider contract terms;   Require that each third party who contracts with the contracting entity to gain access to the provider network contract:  Designate an individual or department responsible for responding to provider inquiries concerning the third party's access to the provider network contract; and   Include the following information on each remittance advice (RA), explanation of payment (EOP) or other similar documentation furnished to a provider when a contractual discount is exercised pursuant to the contracting entity's provider network contract:   The source of the contractual discount taken by the third party; and   A direct toll-free telephone number answerable Monday through Friday during normal business hours for the individual or department designated to be responsible for responding to provider inquiries pursuant to subdivision (b)(4)(A); and        Notify any third party who contracts with the contracting entity to gain access to a provider's services and contractual discounts pursuant to the provider network contract of the termination of the provider network contract within thirty (30) calendar days of the contracting entity's receipt of notification of the termination;   The notice required by subdivision (b)(5)(A) shall be provided through written notice, electronic communication or an update to an electronic database of provider listings.       Subject to any applicable continuity of care requirements, provisions of the provider network contract or contrary law:  A third party's right to access a provider's health care services and contractual discounts pursuant to a provider network contract shall terminate on the date the provider network contract is terminated;   Claims for health care services performed after the termination date of the provider network contract are not eligible for processing and payment in accordance with the provider network contract; and   Claims for health care services performed before the termination date of the provider network contract, but processed after the termination date, are eligible for processing and payment in accordance with the provider network contract.      All information made available to a provider in accordance with the requirements of this chapter shall be confidential and shall not be disclosed to any individual or entity not involved in the provider's practice or the administration of such practice without the prior written consent of the contracting entity.   A contracting entity may reference or include within the contract or a related document the language contained in subdivision (d)(1), or language that is substantially similar in scope and purpose, in order to affirm each party's knowledge of and agreement to comply with the confidentiality provision.   This subsection (d) shall not preclude the information being disclosed for purposes of dispute resolution, enforcement of this chapter or assistance in enforcing this chapter.     
  Any third party, having itself been granted access to a provider's health care services and contractual discounts pursuant to a provider network contract, that subsequently grants access to another third party, is obligated to comply with the rights and responsibilities imposed on contracting entities under  56-60-104 and 56-60-105.   Any third party that enters into a contract with another third party to access a provider's health care services and contractual discounts pursuant to a provider network contract is obligated to comply with the rights and responsibilities imposed on third parties under this section and  56-60-105.   Any third party that subsequently grants access to another third party will provide to the contracting entity the location of a web site or a telephone number that the contracting entity will make available to providers as provided in  56-60-105(b)(2) that will identify to providers any individual or entity to whom the third party has granted access to the provider's health care services and contractual discounts pursuant to the provider network contract. The third party shall update the listing on the web site or available through the telephone number on a routine basis as additional individuals or entities are granted access and shall review the listing no less frequently than quarterly to ensure the completeness and accuracy of the information available.   
  No contracting entity shall grant a third party access to the contracting entity's provider network contract by lease, rent or by any other means unless the third party accessing the provider network contract is:  A payer of claims or a third party administrator or other entity that administers or processes claims on behalf of the payer;   A preferred provider organization or preferred provider network including a physician organization or physician hospital organization; or   An entity engaged in the electronic claims transport between the contracting entity and the payer if the entity does not provide access to the provider's services and contractual discounts to any other third party.      A provider may refuse the discount taken on the remittance advice (RA) or explanation of payment (EOP) if the discount is taken without a contractual basis or if the provider cannot obtain information relative to the discount because of a violation of  56-60-105(b)(2) or  56-60-106(c). The provider shall notify in writing the contracting entity or third party of the provider's refusal to accept the contractual discount.   The provider may require payment of the charge with no discount applied unless the contracting entity or third party within thirty (30) calendar days of receipt of notice of the apparent violation of the requirements of this section:  Notifies the provider that the apparent violation resulted from an administrative oversight or other unintentional error and advises the provider of steps taken to remedy and avoid recurrence of the error; and   Submits to the provider a corrected RA or EOP with documentation demonstrating eligibility for any discount applied.       
  The department shall enforce this chapter.   The department is authorized to promulgate rules to effectuate this chapter in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. The initial rules promulgated by the department may be designated as emergency rules if the department finds that it cannot implement the rules by January 1, 2010, exercising the rulemaking procedures for the promulgation of permanent rules and if the department complies with  4-5-208.   
  It is an unfair insurance practice for the purposes of the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title, to knowingly access a provider's services or exercise a provider's contractual discounts pursuant to a provider network contract if the access or exercise is not pursuant to a contractual relationship with the provider or with a contracting entity or third party who has a contractual relationship with the provider as specified in this chapter.    To effectuate the purposes of this section, the department shall develop a complaint form for providers or others to submit alleging violations of this chapter.   Information provided in good faith to the department shall not make the provider or other individual or entity providing the information liable for civil damages as a result of providing the information.     
  This chapter shall be known and may be cited as the Tennessee Health Carrier Grievance and External Review Procedure Act.   The purpose of this chapter is to provide standards for the establishment and maintenance of procedures by health carriers to assure that covered persons and healthcare providers have the opportunity for the appropriate resolution of grievances, as defined in this chapter.   
 For purposes of this chapter, unless the context otherwise requires:   Adverse determination means:  A determination by a health carrier or its designee utilization review organization that, based upon the information provided, a request for a benefit under the health carrier's health benefit plan does not meet the health carrier's requirements for medical necessity, appropriateness, healthcare setting, level of care or effectiveness and the requested benefit is therefore denied, reduced or terminated or payment is not provided or made, in whole or in part, for the benefit;   The denial, reduction, termination or failure to provide or make payment, in whole or in part, for a benefit based on a determination by a health carrier of a covered person's eligibility to participate in the health carrier's health benefit plan; or   Any prospective review or retrospective review determination that denies, reduces, or terminates or fails to provide or make payment for, in whole or in part, a benefit;     Aggrieved person means:  A healthcare provider;   A covered person; or   A covered person's authorized representative;     Authorized representative means:  A person to whom a covered person has given express written consent to represent the covered person for purposes of this chapter;   A person authorized by law to provide substituted consent for a covered person;   A family member of the covered person or the covered person's treating healthcare professional when the covered person is unable to provide consent;   A healthcare professional when the covered person's health benefit plan requires that a request for a benefit under the plan be initiated by the healthcare professional; or   In the case of an urgent care request, a healthcare professional with knowledge of the covered person's medical condition;     Clinical peer means a physician or other healthcare professional who holds a nonrestricted license in a state of the United States and in the same or similar specialty that would typically manage the medical condition, procedure or treatment under review;   Clinical review criteria means the written screening procedures, decision abstracts, clinical protocols and practice guidelines used by the health carrier to determine the medical necessity and appropriateness of healthcare services;   Closed plan means a managed care plan that requires covered persons to use participating providers under the terms of the managed care plan or the plan will not provide covered benefits to the covered person;   Commissioner means the commissioner of commerce and insurance;   Covered benefits or benefits means those healthcare services to which a covered person is entitled under the terms of a health benefit plan;   Covered person means a policyholder, subscriber, enrollee or other individual participating in a health benefit plan;   Emergency medical condition means the sudden and, at the time, unexpected onset of a health condition that requires immediate medical attention, where failure to provide medical attention would result in serious impairment to bodily functions, serious dysfunction of a bodily organ or part, or would place the person's health in serious jeopardy;   Emergency services means healthcare items and services furnished or required to evaluate and treat an emergency medical condition;   External review organization means an entity that conducts independent external reviews of adverse determinations and final adverse determinations of a health carrier;   Facility means an institution licensed under title 68 providing healthcare services or a healthcare setting, including but not limited to, hospitals and other licensed inpatient centers, ambulatory surgical or treatment centers, skilled nursing centers, residential treatment centers, diagnostic, laboratory and imaging centers, and rehabilitation;   Final adverse determination means an adverse determination involving a covered benefit that has been upheld by a health carrier at the completion of the health carrier's internal grievance process procedures as set forth in this chapter;   Grievance means a written appeal of an adverse determination or final adverse determination submitted by or on behalf of a covered person regarding:  Availability, delivery or quality of healthcare services regarding an adverse determination;   Claims payment, handling or reimbursement for healthcare services;   Matters pertaining to the contractual relationship between a covered person and a health carrier; or   Matters pertaining to the contractual relationship between a healthcare provider and a health carrier;     Health benefit plan means a policy, contract, certificate or agreement offered or issued by a health carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of healthcare services;   Health carrier means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide, deliver, arrange for, pay for or reimburse any of the costs of healthcare services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or any other entity providing a plan of health insurance, health benefits or healthcare services;   Healthcare professional means a physician or other healthcare practitioner licensed, accredited or certified to perform specified healthcare services consistent with state law;   Healthcare provider or provider means a healthcare professional or a facility;   Healthcare services means services for the diagnosis, prevention, treatment, cure or relief of a health condition, illness, injury or disease;   Managed care plan means a health benefit plan that requires a covered person to use, or creates incentives, including financial incentives, for a covered person to use healthcare providers managed, owned, under contract with or employed by the health carrier. Managed care plan includes:  A closed plan, as defined in subdivision (6); and   An open plan, as defined in subdivision (26);     Medical or scientific evidence means evidence found in the following sources; provided, that subdivisions (22)(A)-(B) shall be considered to have more evidentiary value than subdivision (22)(E) and subdivision (22)(E), when considered solely and in the absence of subdivisions (22)(A)-(B), shall not be sufficient to establish medical or scientific evidence for purposes of this chapter:  Peer-reviewed scientific studies published in or accepted for publication by medical journals that meet nationally recognized requirements for scientific manuscripts and that submit most of their published articles for review by experts who are not part of the editorial staff;   Peer-reviewed medical literature, including literature relating to therapies reviewed and approved by a qualified institutional review board, biomedical compendia and other medical literature that meet the criteria of the national institutes of health's library of medicine for indexing in Index Medicus (Medline) and Elsevier Science Ltd. for indexing in Excerpta Medicus (EMBASE);   Medical journals recognized by the secretary of health and human services under  1861(t)(2) of the federal Social Security Act;   The following standard reference compendia:   The American Hospital Formulary Service - Drug Information;   Drug Facts and Comparisons;   The American Dental Association Accepted Dental Therapeutics;   The United States Pharmacopoeia - Drug Information; or     Findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including:   The federal agency for healthcare research and quality;   The national institutes of health;   The national cancer institute;   The national academy of sciences;   The centers for medicare and medicaid services;   The federal food and drug administration; and   Any national board recognized by the national institutes of health for the purpose of evaluating the medical value of healthcare services;       Medically necessary or medical necessity means healthcare services that a physician, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing or treating an illness, injury, disease or its symptoms, and that are:  In accordance with generally accepted standards of medical practice;   Clinically appropriate, in terms of type, frequency, extent, site and duration; and considered effective for the patient's illness, injury or disease;   Not primarily for the convenience of the patient, physician, or other healthcare provider; and   Not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury or disease;     NAIC means the National Association of Insurance Commissioners;   Network means the group of participating providers providing services to a managed care plan;   Open plan means a managed care plan, other than a closed plan, that provides incentives, including financial incentives, for covered persons to use participating providers under the terms of the managed care plan;   Participating provider means a provider who, under a contract with the health carrier or with its contractor or subcontractor, has agreed to provide healthcare services to covered persons with an expectation of receiving payment, other than coinsurance, copayments or deductibles, directly or indirectly from the health carrier;   Person means an individual, a corporation, a partnership, an association, a joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the entities listed in this subdivision (28);   Prospective review means utilization review conducted prior to an admission or the provision of a healthcare service or a course of treatment in accordance with a health carrier's requirement that the healthcare service or course of treatment, in whole or in part, be approved prior to its provision or admission;   Register means the written records kept by a health carrier to document all grievances received during a calendar year;   Retrospective review means any review of a request for a benefit that is not a prospective review request. Retrospective review does not include the review of a claim that is limited to veracity of documentation or accuracy of coding; and    Urgent care request means a request for a healthcare service or course of treatment with respect to which the time periods for making nonurgent care request determination:   Could seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function; or   In the opinion of a physician with knowledge of the covered person's medical condition, would subject the covered person to severe pain that cannot be adequately managed without the healthcare service or treatment that is the subject of the request;       In determining whether a request is to be treated as an urgent care request, an individual acting on behalf of the health carrier shall apply the judgment of a prudent layperson who possesses an average knowledge of health and medicine.   Any request that a physician with knowledge of the covered person's medical condition determines is an urgent care request within the meaning of subdivision (32)(A) shall be treated as an urgent care request.       
  Except as otherwise specified, this chapter shall apply to all health carriers.   This chapter shall not apply to a policy or certificate that provides:  Coverage only for a specified disease, specified accident or accident-only coverage, credit, dental, disability income, hospital indemnity, long-term care insurance, as defined by  56-42-103, vision care or any other limited supplemental benefit or to a medicare supplement policy of insurance as defined by the commissioner;   Coverage under a plan through medicare, medicaid or the federal employees health benefits program (FEHB);   Any coverage issued under 10 U.S.C.  1072 and any coverage issued as supplement to that coverage;   Any coverage issued as supplemental to liability insurance; workers' compensation or similar insurance; automobile medical-payment insurance or any insurance under which benefits are payable without regard to fault; whether written on a group blanket or individual basis; or   Any plan exempt from regulation under this title due to the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1144).     
 Nothing in this chapter shall limit or restrict the health carrier from denying coverage on the grounds that the services are determined not to be medically necessary.  
  A health carrier shall maintain written records to document all grievances received during a calendar year. The register shall be maintained in a manner that is reasonably clear and accessible to the commissioner.   A request for a first level review of a grievance involving an adverse determination shall be processed in compliance with  56-61-107 and is required to be included in the health carrier's register.   A request for a second level review of a grievance involving an adverse determination that may be conducted pursuant to  56-61-108 shall be included in the health carrier's register.   For each grievance, the register shall contain, at a minimum, the following information:  A general description of the reason for the grievance;   The date the grievance was received;   The date of each review or, if applicable, review meeting;   The resolution at each level of the grievance, if applicable;   The date of resolution at each level, if applicable; and   The name of the aggrieved person for whom the grievance was filed.      A health carrier shall retain the register compiled for a calendar year for the shorter of five (5) years or until the commissioner has adopted a final report of an examination that contains a review of the register for such calendar year.    A health carrier shall submit to the commissioner, at least annually, a report in the format specified by the commissioner.   The report shall include for each type of health benefit plan offered by the health carrier:   The number of covered lives that fall under this chapter's protections;   The total number of grievances;   The number of grievances for which a covered person and healthcare provider requested a second level voluntary grievance review pursuant to  56-61-108;   The number of grievances resolved at each level, if applicable, and their resolution; and   A synopsis of actions being taken to correct problems identified.         
  Except as specified in  56-61-109, a health carrier shall use written procedures for receiving and resolving grievances from aggrieved persons, as provided in  56-61-107 and 56-61-108, unless otherwise provided by this chapter.   A health carrier shall file with the commissioner a copy of the procedures required under subsection (a), including all forms used to process requests made pursuant to  56-61-107 and 56-61-108. Any subsequent material modifications to the documents also shall be filed.   A description of the grievance procedures required under this section shall be set forth in or attached to the membership booklet, provider manual, and health carrier's web site. The health carrier may include a description of the grievance procedures in the policy, certificate, outline of coverage or other evidence of coverage provided to aggrieved persons.   
  Within one hundred and eighty (180) days after the date of receipt of a notice of an adverse determination, an aggrieved person may file a grievance with the health carrier requesting a first level review of the adverse determination.   The health carrier shall provide the aggrieved person with the name and address of the organizational unit or department designated to coordinate the first level review on behalf of the health carrier.     An aggrieved person does not have the right to attend, or to have a representative in attendance at the first level review; provided, that the aggrieved person is entitled to:   Submit written comments, documents, records and other material relating to the request for benefits for the reviewer or reviewers to consider when conducting the review; and   Receive from the health carrier, upon request and free of charge, reasonable access to, and copies of all documents, records and other information relevant to the covered person's request for benefits.     For purposes of subdivision (c)(1)(A)(ii), a document, record or other information shall be considered relevant to an aggrieved person's request for benefits if the document, record or other information:   Was relied upon in making the benefit determination;   Was submitted, considered or generated in the course of making the adverse determination, without regard to whether the document, record or other information was relied upon in making the benefit determination;   Demonstrates that, in making the benefit determination, the health carrier or its designated representatives applied required administrative procedures and safeguards with respect to the covered person as other similarly situated covered persons; or   Constitutes a statement of policy or guidance with respect to the health benefit plan concerning the denied healthcare service or treatment for the covered person's diagnosis, without regard to whether the advice or statement was relied upon in making the benefit determination.       The health carrier shall make the provisions of subdivision (c)(1) known to the aggrieved person within five (5) business days after the date of receipt of the grievance; provided, that the request was made to the appropriate organizational unit or department designated by the health carrier.     For purposes of calculating the time periods within which a determination is required to be rendered and notice provided under subsection (e), the time period shall begin on the date the grievance requesting the first level review is filed with the health carrier in accordance with the health carrier's procedures established pursuant to this section, without regard to whether all of the information necessary to make the determination accompanies the filing.    A health carrier shall notify and issue a decision, in writing or electronically, to the aggrieved person within the timeframes provided in subdivisions (e)(2) and (3).   With respect to a grievance requesting a first level review of an adverse determination involving a prospective review request, the health carrier shall notify and issue a decision within a reasonable period of time that is appropriate given the covered person's medical condition, but no later than thirty (30) days after the date of the health carrier's receipt of the grievance requesting the first level review made pursuant to subsection (a).   With respect to a grievance requesting a first level review of an adverse determination involving a retrospective review request, the health carrier shall notify and issue a decision within a reasonable period of time, but no later than sixty (60) days after the date of the health carrier's receipt of the grievance requesting the first level review made pursuant to subsection (a).     The decision issued pursuant to subsection (e) shall set forth, in a manner calculated to be understood by the aggrieved person:  The titles and qualifying credentials of the person or persons participating and reviewing in the first level review;   A statement of each reviewer's understanding of the grievance;   Each reviewer's decision in clear terms and the contract basis or medical rationale in sufficient detail for the aggrieved person to respond further to the health carrier's position;   A reference to the evidence or documentation used as the basis for the decision;   For a first level review decision issued pursuant to subsection (e) involving an adverse determination:  The specific reason or reasons for the adverse determination;   A reference to the specific plan provisions on which the determination is based;   A statement that the aggrieved person is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant, as the term relevant is defined in subdivision (c)(1)(B), to the covered person's benefit request;   If the health carrier relied upon an internal rule, guideline, protocol or other similar criterion to make the adverse determination, either the specific rule, guideline, protocol or other similar criterion or a statement that a specific rule, guideline, protocol or other similar criterion was relied upon to make the adverse determination and that a copy of the rule, guideline, protocol or other similar criterion will be provided free of charge to the aggrieved person upon request and the date such policy was effective;   If the adverse determination is based on medical necessity, either an explanation of the criteria for making the determination, applying the terms of the health benefit plan to the covered person's medical circumstances, or a statement that an explanation will be provided to the aggrieved person, free of charge upon request; and   If applicable, instructions for requesting:   A copy of the rule, guideline, protocol or other similar criterion relied upon in making the adverse determination, as provided in subdivision (f)(5)(D); and   The written statement of the criteria for the determination, as provided in subdivision (f)(5)(E);       If applicable, a statement indicating:  A description of the process to obtain a second level review of the first level review's decision involving an adverse determination, if the aggrieved person wishes to request a second level review pursuant to  56-61-108;   The written procedures governing the second level review, including any required timeframe for the review; and   A description of the procedures for obtaining an external review of the adverse determination pursuant to this chapter if the aggrieved person decides not to file for a second review of the first level review's decision involving an adverse determination.       
  A health carrier shall establish a second level review process to give aggrieved persons, who are dissatisfied with the first level review decision, the option of requesting a second level review.    Health carriers required by this section to establish a second level review process shall provide aggrieved persons with notice pursuant to  56-61-107, as appropriate, of the option to file a request with the health carrier for a second level review of the first level review's decision rendered pursuant to  56-61-107.   Upon receipt of a request for a second level review, the health carrier shall send notice within five (5) business days to the covered person or, if applicable, the covered person's authorized representative of the covered person's right to:  Request, within the timeframe specified in subdivision (b)(3)(A), the opportunity to appear in person before a review panel of the health carrier's designated representatives;   Receive from the health carrier, upon request, copies of all documents, records and other information that is not confidential or privileged relevant to the covered person's request for benefits;   Present the covered person's case to the review panel;   Submit written comments, documents, records and other material relating to the request for benefits to the review panel for consideration when conducting the second level review both before and, if applicable, during the second level review;   If applicable, ask questions of any representative of the health carrier on the review panel; provided, such questions are governed and relevant to the subject matter of the second level review; and   Be assisted or represented by an individual of the covered person's choice, at the expense of such covered person.      A covered person or covered person's authorized representative wishing to request to appear in person before the review panel of the health carrier's designated representatives shall make the request to the health carrier within ten (10) business days after the date of receipt of the notice sent in accordance with subdivision (b)(2).   The covered person's right to a fair review shall not be made conditional on the covered person or the covered person's authorized representative's appearance at the second level review.     Upon receipt of a request for a second level review, the health carrier shall send notice within five (5) business days to the healthcare provider of the healthcare provider's right to:  Receive from the health carrier, upon request, copies of all documents, records and other information that is not confidential or privileged relevant to the aggrieved person's request for benefits;   Submit written comments, documents, records and other material relating to the request for benefits for the review panel to consider when conducting the second level review; and   If applicable, ask questions of any representative of the health carrier on the review panel; provided, such questions are governed and relevant to the subject matter of the second level review.         With respect to a second level review of a first level review decision rendered pursuant to  56-61-107, a health carrier shall appoint a review panel to review the request.   In conducting the review, the review panel shall take into consideration all comments, documents, records and other information regarding the request for benefits submitted by the aggrieved person pursuant to subdivision (b)(2), without regard to whether the information was submitted or considered in reaching the first level review's decision.   The review panel shall have the legal authority to bind the health carrier to the review panel's decision.      Except as provided in subdivision (c)(2)(B), a majority of the review panel shall be comprised of individuals who were not involved in the first level review decision rendered pursuant to  56-61-107.   An individual who was involved with the first level review decision may be a member of the review panel or appear before the review panel to present information or answer questions.   The health carrier shall ensure that the individuals conducting the second level review of the first level review decision have appropriate expertise or have access to appropriate expertise that consists of similar knowledge and training or specialty that typically is involved in managing the medical condition, procedure or treatment that is the subject of the grievance under second level review.   No member of the review panel shall have a direct financial interest in the outcome of the second level review.       The procedures for conducting the second level review shall include the provisions described in subdivisions (d)(1)-(5):  The review panel shall schedule and hold the second level review within sixty (60) business days after the date of receipt of the request for a second level review;  The aggrieved person shall be notified in writing at least fifteen (15) business days in advance of the date of the second level review;   The health carrier shall not unreasonably deny a request for postponement of the second level review made by the aggrieved person;     The second level review shall be held during regular business hours at a location that meets the guidelines established by the Americans with Disabilities Act (42 U.S.C.  1201 et seq.), to the aggrieved person;   In cases where an in-person second level review is not practical for geographic reasons, or any other reason, a health carrier shall offer the aggrieved person the opportunity to communicate with the review panel, at the health carrier's sole expense, by conference call or other appropriate technology as determined by the health carrier;   The review panel shall provide the aggrieved person notice of the right to have an attorney present at the second level review; and   The review panel shall issue a written or electronic decision, as provided in subsection (e), to the aggrieved person within five (5) business days of completing the second level review meeting.     A decision issued pursuant to this section shall include the:  Titles and qualifying credentials of the reviewers on the review panel;   Statement of the review panel's understanding of the nature of the grievance and all pertinent facts;   Rationale for the review panel's decision;   Reference to evidence or documentation considered by the review panel in rendering its decision; and   In cases concerning a grievance involving an adverse determination:  Instructions for requesting a written statement of the clinical rationale, including the clinical review criteria used to make the determination; and   If applicable, a statement describing the procedures for obtaining an external review of the adverse determination pursuant to this chapter.       
  A health carrier shall establish written procedures for the expedited review of urgent care requests of grievances involving an adverse determination.   In addition to subsection (a), a health carrier shall provide expedited review of a grievance involving an adverse determination with respect to concurrent review of urgent care requests involving an admission, availability of care, continued stay or healthcare service for a covered person who has received emergency services, but has not been discharged from a facility.   The procedures shall allow an aggrieved person to request an expedited review under this section orally, in writing or electronically.   A health carrier shall appoint an appropriate clinical peer, or peers as would typically manage the case being reviewed, to review the adverse determination. The clinical peer or peers shall not have been involved in rendering the initial adverse determination.   In an expedited review, the health carrier shall provide or transmit all necessary documents and information considered when making the adverse determination to the aggrieved person participating in the expedited review process electronically or by telephone, facsimile or any other expeditious method available.    An expedited review decision shall be rendered and the aggrieved person shall be notified of the decision in accordance with subsection (h) as expeditiously as the covered person's medical condition requires, but in no event more than seventy-two (72) hours after the receipt of the request for the expedited review.   If the expedited review is of a grievance involving an adverse determination with respect to a concurrent review of an urgent care request, the service shall be continued until the covered person or covered person's authorized representative has been notified of the determination or until the healthcare provider determines that the urgent care is no longer appropriate or necessary.     For purposes of calculating the time periods within which a decision is required to be rendered under subsection (f), the time period within which the decision is required to be rendered shall begin on the date that the request is filed with the health carrier in accordance with the health carrier's procedures established pursuant to  56-61-107; without regard to whether all the information necessary to make the determination accompanies the filing.    A notification of a decision under this section shall, in a manner calculated to be understood by the aggrieved person, set forth:  The titles and qualifying credentials of the person or persons participating in the expedited review process;   A statement of the reviewers' understanding of the grievance;   The reviewers' decision in clear terms and the contract basis or medical rationale in sufficient detail for the aggrieved person to respond further to the health carrier's position;   A reference to the evidence or documentation used as the basis for the decision; and   If the decision involves an adverse determination, the notice shall provide:       The specific reason or reasons for the adverse determination;    Reference to the specific plan provisions on which the determination is based;   A description of any additional material or information necessary for the covered person to complete the request, including an explanation of why the material or information is necessary to complete the request;   If the health carrier relied upon an internal rule, guideline, protocol or other similar criterion, effective at the time of service, to make the adverse determination, either the specific rule, guideline, protocol or other similar criterion or a statement that a specific rule, guideline, protocol or other similar criterion was relied upon to make the adverse determination and a copy of the rule, guideline, protocol or other similar criterion will be provided free of charge to the aggrieved person upon request;   If the adverse determination is based on medical necessity, an explanation of the criteria for making the determination, applying the terms of the health benefit plan to the covered person's medical circumstances or a statement that an explanation will be provided to the aggrieved person free of charge upon request;   If applicable, instructions for requesting:   A copy of the rule, guideline, protocol or other similar criterion relied upon in making the adverse determination in accordance with subdivision (h)(1)(E)(iv); or   The written statement of the criteria for the adverse determination in accordance with subdivision (h)(1)(E)(v); and   A statement describing the procedures for obtaining an external review of the adverse determination pursuant to this chapter.   (A)  A health carrier may provide the notice required under this section orally, in writing or electronically.   If notice of the adverse determination is provided orally, the health carrier shall provide written or electronic notice of the adverse determination within three (3) days following such oral notification.  
 The commissioner may, after notice and hearing, promulgate reasonable rules and regulations to carry out this chapter. Such rules and regulations shall be subject to review in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 A person that violates this chapter shall be subject to the penalties set forth in  56-2-305.  
  For purposes of this section, approved entity means:  The utilization review accreditation commission (URAC); or   Other nationally recognized private accrediting entity employing standards for the accreditation of external review programs that the commissioner deems are substantially equivalent to the standards for conducting an external review pursuant to  56-61-113  56-61-118.     A health carrier may elect, in writing to the commissioner, to conduct its external review program in accordance with:  Sections 56-61-113   56-61-118, or   The external review program of an approved entity; provided, that the health carrier receives and maintains accreditation from the approved entity. Sections 56-61-120 and 56-61-121 shall not apply to a health carrier that receives and maintains accreditation from the approved entity.     The commissioner may evaluate the external review procedures of an approved entity. If after a hearing is conducted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, the commissioner finds that an approved entity has amended its external review procedures to the extent that such procedures are no longer consistent with the purposes of this chapter, the commissioner shall issue a written order specifying in what respects those procedures are inconsistent.   A health carrier that has elected to conduct its external review program in accordance with the standards of an approved entity, that is the subject of the commissioner's order issued pursuant to subsection (c), shall have sixty (60) days from the effective date of the commissioner's order to:  Elect, in writing, to utilize another external review program under subsection (b); or   Demonstrate to the commissioner's satisfaction that the approved entity has subsequently amended its procedures so that such procedures are consistent with the purposes of this chapter.     
  A health carrier shall notify the aggrieved person in writing of the right to request an external review to be conducted pursuant to  56-61-116 and 56-61-118 and include the appropriate statements and information set forth in subsection (b) at the same time that the health carrier sends written notice of a final adverse determination. As part of the written notice required under this subsection (a), a health carrier shall include the following, or substantially equivalent language:  We have denied your request for the provision of or payment for a healthcare service or course of treatment. You have the right to have our decision reviewed by healthcare professionals who have no association with us if our decision involved making a judgment as to the medical necessity, appropriateness, healthcare setting, level of care or effectiveness of the healthcare service or treatment you requested by submitting a written request for external review to us.    The health carrier shall include the following in the notice required under subsection (a):  For a notice related to an adverse determination, a statement informing the aggrieved person that:  If the covered person has a medical condition where the timeframe for completion of an expedited review of a grievance involving an adverse determination set forth in  56-61-109 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function, the aggrieved person may file a request for an expedited external review to be conducted pursuant to  56-61-117;   The aggrieved person may file a grievance under the health carrier's internal grievance process as set forth in  56-61-107. An aggrieved person shall be considered to have exhausted the health carrier's internal grievance process for purposes of this section, if the aggrieved person:   Has filed a grievance involving an adverse determination pursuant to  56-61-107; and   Has not received a written decision on the grievance from the health carrier within thirty (30) days for prospective review determinations and sixty (60) days for retrospective review determinations following the date the aggrieved person filed the grievance with the health carrier unless the aggrieved person requested or agreed to a delay;       For a notice related to a final adverse determination, a statement informing the aggrieved person that:  If the covered person has a medical condition where the timeframe for completion of a standard external review pursuant to  56-61-116 or  56-61-118 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function, the aggrieved person may file a request for an expedited external review pursuant to  56-61-117 or  56-61-118(n);   If the final adverse determination concerns an admission, availability of care, continued stay or healthcare service for which the covered person received emergency services, but has not been discharged from a facility, the aggrieved person may file a request for an expedited external review pursuant to  56-61-117 or  56-61-118(n).       In addition to the information to be provided pursuant to subdivision (b)(1), the health carrier shall include a copy of the description of both the standard and expedited external review procedures highlighting the provisions in the external review procedures that give the aggrieved person the opportunity to submit additional information and any forms used to process an external review.   As part of any forms provided under subdivision (b)(2), the health carrier shall include an authorization form that complies with the requirements of 45 CFR 164.508, by which the covered person, for purposes of conducting an external review under this chapter, authorizes the health carrier and the covered person's treating healthcare provider to disclose protected health information, including, but not limited to, medical records concerning the covered person that are pertinent to the external review.   
  Except for a request for an expedited external review as set forth in  56-61-117 or  56-61-118(n), all requests for external review shall be made in writing to the health carrier.   Unless otherwise set forth by this chapter, an aggrieved person may file a request for external review after the receipt of a final adverse determination.   
  Except as provided in subsection (b), a request for an external review pursuant to  56-61-116 or  56-61-118 shall not be made until the aggrieved person has exhausted the health carrier's internal grievance process as set forth in this chapter.  An aggrieved person shall be considered to have exhausted the health carrier's internal grievance process for purposes of this section, if the aggrieved person:  Has filed a grievance involving an adverse determination pursuant to  56-61-107; and   Has not received a written decision on the grievance from the health carrier within thirty (30) days for prospective review determinations and sixty (60) days for retrospective review determinations following the date that the aggrieved person filed the grievance with the health carrier unless the aggrieved person requested or agreed to a delay.     Notwithstanding subdivision (a)(1)(B), an aggrieved person may not file a request for an external review of an adverse determination involving a retrospective review determination until the covered person has exhausted the health carrier's internal grievance process.     A request for an external review of an adverse determination may be filed before the covered person has exhausted the health carrier's internal grievance procedures, as set forth in  56-61-107, whenever the health carrier agrees to waive the exhaustion requirement.   If the requirement to exhaust the health carrier's internal grievance procedures is waived pursuant to subsection (b), the aggrieved person may file a request in writing for a standard external review as set forth in  56-61-116 or  56-61-118.   
  Within six (6) months after the date of receipt of a notice of an adverse determination or final adverse determination pursuant to  56-61-113, an aggrieved person may file a request for an external review with the health carrier.   Within ten (10) business days following the date of receipt of the copy of the external review request, the health carrier shall complete a preliminary review of the request to determine whether:  The individual is or was a covered person in the health benefit plan at the time that the healthcare service was requested or, in the case of a retrospective review, was a covered person in the health benefit plan at the time that the healthcare service was provided;   The healthcare service that is the subject of the adverse determination or the final adverse determination is a covered service under the covered person's health benefit plan;   The covered person has exhausted the health carrier's internal grievance process as set forth in this chapter unless the covered person is not required to exhaust the health carrier's internal grievance process pursuant to  56-61-115; and   The covered person has provided all the information and forms required to process an external review, including the release form provided pursuant to  56-61-113.     Within three (3) business days after completion of the preliminary review, the health carrier shall notify the aggrieved person in writing whether:  The request is complete; and   The request is eligible for external review.     If the request set out in subsection (a):  Is not complete, the health carrier shall notify the aggrieved person in writing and include in the notice what information or materials are needed to make the request complete; or   Is not eligible for external review, the health carrier shall notify the aggrieved person in writing and include in the notice the reasons for its ineligibility.     The notice of initial determination shall include a statement informing the aggrieved person that a health carrier's initial determination that the external review request is ineligible for review may be appealed to the commissioner.   The commissioner may determine that a request is eligible for external review under this chapter notwithstanding a health carrier's initial determination that the request is ineligible and require that it be referred for external review.  In making a determination under this subsection (f), the commissioner's decision shall be made in accordance with the terms of the covered person's health benefit plan and shall be subject to all applicable provisions of this chapter.   Whenever the health carrier or commissioner determines that a request is eligible for external review following the preliminary review conducted pursuant to subdivision (c)(2), within three (3) business days after the determination by the health carrier or within three (3) business days after the date of receipt of the determination by the commissioner, the health carrier shall notify the aggrieved person in writing of the request's eligibility and acceptance for external review.     The health carrier shall include in the notice provided to the aggrieved person, a statement that additional information may be submitted in writing to the external review organization within six (6) business days following the date of receipt of the notice provided pursuant to subdivision (f)(2), and that the external review organization shall consider such additional information when conducting the external review. The external review organization is not required to, but may, accept for consideration such additional information submitted by the aggrieved person after six (6) business days. The external review organization shall forward to the health carrier any information received from an aggrieved person no later than one (1) business day after the date the information is received by the external review organization.   Within six (6) business days after the date of receipt of the notice provided pursuant to subsection (g), the health carrier shall provide to the external review organization any documents and information considered in making the adverse determination or final adverse determination.  Failure by the health carrier to provide the documents and information within the time specified in this subsection (h) shall not delay the external review.   If the health carrier fails to provide the documents and information within the time specified in this subsection (h), the external review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination.   The external review organization shall notify the health carrier within one (1) business day of its decision to reverse the adverse determination or final adverse determination pursuant to subdivision (h)(2). The health carrier shall notify the aggrieved person within three (3) business days of the external review organization's decision.     The external review organization shall review all of the information and documents received within six (6) business days pursuant to subsection (g) and any other information submitted in writing by the aggrieved person.   Upon receipt of the information required to be forwarded pursuant to subsection (g), the health carrier may reconsider its final adverse determination that is the subject of the external review.  Reconsideration by the health carrier of its final adverse determination shall not delay or terminate the external review.   The external review may only be terminated by the health carrier if the health carrier decides, upon completion of its reconsideration, to reverse its final adverse determination and provide coverage or payment for the healthcare service that is the subject of the adverse determination or final adverse determination. If the health carrier reverses its previous determinations pursuant to this subsection (j), the health carrier shall not at a later date reverse its reversal.   Within three (3) business days after making the decision to reverse its adverse determination or final adverse determination, the health carrier shall notify the aggrieved person and the external review organization in writing of its decision. The external review organization shall terminate the external review upon receipt of the notice from the health carrier sent pursuant to this subdivision (j)(3).     In addition to the documents and information provided pursuant to subsections (g) and (h), the external review organization, to the extent that the information or documents are available and the external review organization considers them appropriate, shall consider the following in reaching a decision:  The covered person's pertinent medical records;   The attending healthcare professional's recommendation;   The consulting reports from appropriate healthcare professionals and other documents submitted by the aggrieved person or the covered person's treating physician or healthcare professional;   The terms of coverage under the covered person's health benefit plan with the health carrier to ensure that the external review organization's decision is not contrary to the terms of coverage under the covered person's health benefit plan with the health carrier;   Any applicable clinical review criteria developed and used by the health carrier;   The most appropriate practice guidelines, which shall include applicable medical or scientific evidence based standards;   Findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including:  The agency for healthcare research and quality;   The national institutes of health;   The national cancer institute;   The national academy of sciences;   The centers for medicare & medicaid services;   The federal food and drug administration; and   Any national board recognized by the national institutes of health for the purpose of evaluating the medical value of healthcare services; and     The opinion of the external review organization's clinical reviewer or reviewers after considering subdivisions (k)(1)-(7), to the extent the information or documents are available and the clinical reviewer or reviewers consider appropriate.     In reaching a decision, the external review organization is not bound by any decisions or conclusions reached during the health carrier's internal grievance process as set forth in this chapter. However, the external review organization shall be bound by the terms and conditions of the covered person's health benefit plan.   Within forty (40) days after the date of receipt of the request for an external review, the external review organization shall provide written notice of its decision to uphold or reverse the adverse determination or the final adverse determination to the health carrier.   Within two (2) calendar days after rendering the decision under subsection (m), the external review organization shall notify the health carrier. Within three (3) calendar days after receiving the decision from the external review organization, the health carrier shall notify the aggrieved person of the external review organization's decision to uphold or reverse the adverse determination or final adverse determination. If the decision involved healthcare provider compensation, the health carrier shall make appropriate payment to the healthcare provider within ten (10) business days of the receipt of a notice of the external review organization's decision.   The external review organization shall include in the notice sent pursuant to subsection (m):  A general description of the reason for the request for external review;   The date that the external review organization received the assignment from the health carrier to conduct the external review;   The date that the external review was conducted;   The date of the external review organization's decision;   The principal reason or reasons for the external review organization's decision, including any applicable, medical or scientific evidence based standards used as a basis for its decision;   The rationale for the external review organization's decision; and   References to the evidence or documentation, including the medical or scientific evidence based standards, considered in reaching the external review organization's decision.     Upon receipt of a notice of a decision pursuant to subsection (m) reversing the adverse determination or final adverse determination, the health carrier shall immediately approve the coverage that was the subject of the adverse determination or final adverse determination. If the decision involved healthcare provider compensation, the health carrier shall make appropriate payment to the healthcare provider within ten (10) business days of the receipt of a notice of the external review organization's decision.   The health carrier, regardless of utilization review accreditation commission (URAC) accreditation, shall have a contract with at least two (2) or more external review entities and may give the aggrieved person the opportunity to select, from among the external review organizations that the health carrier has contracts with, the external review organization to conduct the review; provided, however, that the commissioner may require assignments of external review organizations on a random basis if such random assignment is required per the direction of the United States department of health and human services. The commissioner is hereby granted emergency rulemaking authority to implement random assignments pursuant to this subsection (q).   
  Except as provided in subsection (f), an aggrieved person may make a request for an expedited external review with the health carrier at the time the aggrieved person receives:  An adverse determination if:  The adverse determination involves a medical condition of the covered person for which the timeframe for completion of an expedited internal review of a grievance involving an adverse determination set forth in  56-61-109 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; and   The aggrieved person has filed a request for an expedited review of a grievance involving an adverse determination as set forth in  56-61-109; or     A final adverse determination:  If the covered person has a medical condition where the timeframe for completion of a standard external review pursuant to  56-61-116 would seriously jeopardize the life or health of the covered person or would jeopardize the covered person's ability to regain maximum function; or   If the final adverse determination concerns an admission, availability of care, continued stay or healthcare service for which the covered person received emergency services, but has not been discharged from a facility.        Immediately upon receipt of the request, the health carrier shall determine whether the request meets the reviewability requirements set forth in  56-61-116. The health carrier shall immediately notify the aggrieved person of its eligibility determination regarding the availability of external review.   The notice of initial determination shall include a statement informing the aggrieved person that a health carrier's initial determination that an external review request is ineligible for review and that the aggrieved person may file a complaint with the commissioner.  The commissioner may determine that a request is eligible for external review notwithstanding a health carrier's initial determination that the request is ineligible and that it be referred to external review.   In making a determination under subdivision (b)(2)(A), the commissioner's decision shall be made in accordance with the terms of the covered person's health benefit plan and shall be subject to all applicable provisions of this chapter.       Upon making a determination that a request is eligible for expedited external review, the health carrier shall immediately notify the aggrieved person in writing that the request is eligible for external review.   At the same time, the health carrier shall immediately notify the external review organization and provide or transmit all necessary documents and information considered when making the adverse determination or final adverse determination electronically or by telephone, facsimile or any other expeditious method available.   In addition to the documents and information provided or transmitted pursuant to subsection (d), the external review organization, to the extent that the information or documents are available and the external review organization considers them appropriate, shall consider the following in reaching a decision:  The covered person's pertinent medical records;   The attending healthcare professional's recommendation;   Consulting reports from appropriate healthcare professionals and other documents submitted by the health carrier or the aggrieved person;   The terms of coverage under the covered person's health benefit plan with the health carrier to ensure that the external review organization's decision is not contrary to the terms of coverage under the covered person's health benefit plan with the health carrier;   The most appropriate practice guidelines, which shall include medical or scientific evidence based standards;   Applicable clinical review criteria developed and used by the health carrier in making adverse determinations;   Findings, studies or research conducted by or under the auspices of federal government agencies and nationally recognized federal research institutes, including:  The federal agency for healthcare research and quality;   The national institutes of health;   The national cancer institute;   The national academy of sciences;   The centers for medicare & medicaid services;   The federal food and drug administration; and   Any national board recognized by the national institutes of health for the purpose of evaluating the medical value of healthcare services; and     The opinion of the external review organization's clinical reviewer or reviewers after considering subdivisions (e)(1)-(7) to the extent that the information and documents are available and the clinical reviewer or reviewers consider appropriate.       As expeditiously as the covered person's medical condition or circumstances requires, but in no event more than seventy-two (72) hours after the date of receipt of the request for an expedited external review that meets the reviewability requirements, the external review organization shall make a decision to uphold or reverse the adverse determination or final adverse determination; and   Notify the health carrier of the decision and the health carrier must immediately notify the aggrieved person of the external review organization's decision. The aggrieved person must receive the decision of the expedited external review within seventy-two (72) hours after the date of receipt of the request for expedited external review.      If the notice provided pursuant to subdivision (f)(1) was not in writing, within forty-eight (48) hours after the date of providing such notice, the external review organization shall provide written confirmation of the decision to the health carrier; and include the information set forth in this section.   The health carrier shall immediately notify the aggrieved person of the external review organization's decision and include the information set forth in this section.   Upon receipt of notice of the decision rendered pursuant to subdivision (f)(1) reversing the adverse determination or final adverse determination, the health carrier shall immediately approve the coverage that was the subject of the adverse determination or the final adverse determination.       An expedited external review shall not be provided for retrospective adverse determinations or final adverse determinations.   
  Within six (6) months after the date of receipt of a notice of an adverse determination or final adverse determination that involves a denial of coverage based on a determination that the healthcare service or treatment recommended or requested is investigational, an aggrieved person may file a request for external review with the health carrier.   Within ten (10) business days following the date of receipt of the copy of the external review request, the health carrier shall conduct and complete a preliminary review of the request to determine whether:  The individual is or was a covered person in the health benefit plan at the time that the healthcare service or treatment was recommended or requested or, in the case of a retrospective review, was a covered person in the health benefit plan at the time that the healthcare service or treatment was provided;   The recommended or requested healthcare service or treatment that is the subject of the adverse determination or final adverse determination:  Is a covered benefit under the covered person's health benefit plan except for the health carrier's determination that the service or treatment is experimental or investigational for a particular medical condition; and   Is not explicitly listed as an excluded benefit under the covered person's health benefit plan with the health carrier;     The covered person's treating physician has certified that one (1) of the following situations is applicable:  Standard healthcare services or treatments have not been effective in improving the condition of the covered person;   Standard healthcare services or treatments are not medically appropriate for the covered person; or   There is no available standard healthcare service or treatment covered by the health carrier that is more beneficial than the recommended or requested healthcare service; or     The covered person's treating physician:  Has recommended a healthcare service or treatment that the physician certifies, in writing, is likely to be more beneficial to the covered person, in the physician's opinion, than any available standard healthcare services or treatments; or   Who is a licensed, board certified or board eligible physician qualified to practice in the area of medicine appropriate to treat the covered person's condition, has certified in writing that scientifically valid studies using accepted protocols demonstrate that the healthcare service or treatment requested by the covered person that is the subject of the adverse determination or final adverse determination is likely to be more beneficial to the covered person than any available standard healthcare services or treatments;     The aggrieved person has exhausted the health carrier's internal grievance process as set forth in this chapter unless the aggrieved person is not required to exhaust the health carrier's internal grievance process pursuant to  56-61-115; and   The aggrieved person has provided all the information and forms that are necessary to process an external review, including the release form provided under  56-61-113.     Within three (3) business days after completion of the preliminary review, the health carrier shall notify the aggrieved person in writing whether:  The request is complete; and   The request is eligible for external review.     If the request set out in subsection (a):  Is not complete, the health carrier shall notify the aggrieved person, in writing, and include in the notice what information or materials are needed to make the request complete; or   Is not eligible for external review, the health carrier shall notify the aggrieved person in writing and include in the notice the reasons for its ineligibility.     The notice of initial determination shall include a statement informing the aggrieved person that a health carrier's initial determination that the external review request is ineligible for review may be appealed to the commissioner.    The commissioner may determine that a request is eligible for external review under this chapter notwithstanding a health carrier's initial determination that the request is ineligible and require that it be referred for external review.   In making a determination under this subsection (f), the commissioner's decision shall be made in accordance with the terms of the covered person's health benefit plan and shall be subject to all applicable provisions of this chapter.      Whenever the health carrier or commissioner determines that a request is eligible for external review following the preliminary review conducted pursuant to subdivision (c)(2), within three (3) business days after the determination by the health carrier or within three (3) business days after the date of receipt of the determination by the commissioner, the health carrier shall notify the aggrieved person in writing of the request's eligibility and acceptance for external review.   The health carrier shall include in the notice provided to the aggrieved person, a statement that additional information may be submitted in writing to the health carrier, within six (6) business days following the date of receipt of the notice provided pursuant to this subsection (g), that the external review organization shall consider when conducting the external review. The health carrier is not required to, but may, accept and forward to the external review organization for consideration such additional information submitted by the aggrieved person after six (6) business days.   Within one (1) business day after the receipt of the notice of the request to conduct external review, the external review organization shall:  Select one (1) or more clinical reviewers, as it determines is appropriate, pursuant to subsection (o) to conduct the external review; and   Based on the opinion of the clinical reviewer, or opinions if more than one (1) clinical reviewer has been selected to conduct the external review, make a decision to uphold or reverse the adverse determination or final adverse determination.     In selecting clinical reviewers pursuant to subdivision (g)(3), the external review organization shall select physicians or other healthcare professionals who meet the minimum qualifications described in  56-61-121 and, through clinical experience in the past three (3) years, are experts in the treatment of the covered person's condition and knowledgeable about the recommended or requested healthcare service or treatment.   Neither the aggrieved person nor the health carrier shall choose or control the choice of the physicians or other healthcare professionals selected to conduct the external review.   In accordance with subsection (h), each clinical reviewer shall provide a written opinion to the external review organization on whether the recommended or requested healthcare service or treatment should be covered.   In reaching an opinion, clinical reviewers are not bound by any decisions or conclusions reached during the health carrier's internal grievance process.      Within six (6) business days after the date of receipt of the notice provided pursuant to subsections (c) or (f), the health carrier shall provide to the external review organization, any documents and information considered in making the adverse determination or the final adverse determination.   Failure by the health carrier to provide the documents and information within the time specified in subsection (h) shall not delay the conduct of the external review.   If the health carrier fails to provide the documents and information within the time specified in subsection (h), the external review organization may terminate the external review and make a decision to reverse the adverse determination or final adverse determination.   The external review organization shall notify the health carrier within one (1) business day of its decision to reverse the adverse determination or final adverse determination pursuant to subdivision (h)(3). The health carrier shall notify the aggrieved person within three (3) business days of the external review organization's decision.     Each clinical reviewer selected pursuant to subdivision (g)(3) shall review all of the information and documents received pursuant to subdivision (g)(2) and any other information submitted in writing by the aggrieved person.    Upon receipt of the information required to be forwarded pursuant to subdivision (g)(2), the health carrier may reconsider its adverse determination or final adverse determination that is the subject of the external review.   Reconsideration by the health carrier of its adverse determination or final adverse determination shall not delay or terminate the external review.   The external review may terminate only if the health carrier decides, upon completion of its reconsideration, to reverse its adverse determination or final adverse determination and provide coverage or payment for the recommended or requested healthcare service or treatment that is the subject of the adverse determination or final adverse determination.   Within three (3) business days after making the decision to reverse its adverse determination or final adverse determination, the health carrier shall notify the aggrieved person of its decision in writing.   The external review organization shall terminate the external review upon receipt of the notice from the health carrier sent pursuant to subdivision (j)(4).     Within twenty (20) days after being selected in accordance with subdivision (g)(3) to conduct the external review, each clinical reviewer shall provide an opinion to the external review organization on whether the recommended or requested healthcare service or treatment should be covered. Each clinical reviewer's opinion shall be in writing and include the following information:  A description of the covered person's medical condition;   A description of the indicators relevant to determining whether there is sufficient evidence to demonstrate that the recommended or requested healthcare service or treatment is more likely than not to be beneficial to the covered person than any available standard healthcare services or treatments and the adverse risks of the recommended or requested healthcare service or treatment would not be substantially increased over those available standard healthcare services or treatments;   A description and analysis of any medical or scientific evidence, as that term is defined by this chapter; and   Information on whether the reviewer's rationale for the opinion is based on subdivision (l )(5).     In addition to the documents and information provided pursuant to subsection (g), each clinical reviewer, to the extent that the information or documents are available and the reviewer considers appropriate, shall consider the following in reaching an opinion pursuant to subsection (k):  The covered person's pertinent medical records;   The attending physician or healthcare professional's recommendation;   Consulting reports from appropriate healthcare professionals and other documents submitted by the health carrier, aggrieved person, or the covered person's treating physician or healthcare professional;   The terms of coverage under the covered person's health benefit plan with the health carrier to ensure that, but for the health carrier's determination that the recommended or requested healthcare service or treatment that is the subject of the opinion is experimental or investigational, the reviewer's opinion is not contrary to the terms of coverage under the covered person's health benefit plan with the health carrier; and   Whether:  The recommended or requested healthcare service or treatment has been approved by the federal food and drug administration, if applicable, for the condition; or   Medical or scientific evidence based standards that demonstrate that the expected benefits of the recommended or requested healthcare service or treatment is more likely than not to be beneficial to the covered person than any available standard healthcare service or treatment and the adverse risks of the recommended or requested healthcare service or treatment would not be substantially increased over those of available standard healthcare services or treatments.        Within twenty (20) days after the date it receives the opinion of each clinical reviewer, the external review organization shall make a decision and provide written notice of the decision to the health carrier. The health carrier shall notify the aggrieved person within three (3) business days of the external review organization decision.   If a majority of the clinical reviewers recommend that the recommended or requested healthcare service or treatment should be covered, the external review organization shall render a decision to reverse the health carrier's adverse determination or final adverse determination.   If a majority of the clinical reviewers recommend that the recommended or requested healthcare service or treatment should not be covered, the external review organization shall render a decision to uphold the health carrier's adverse determination or final adverse determination.   If the clinical reviewers are evenly split as to whether the recommended or requested healthcare service or treatment should be covered, then the external review organization shall obtain the opinion of an additional clinical reviewer in order for the external review organization to render a decision based on the opinions of a majority of the clinical reviewers; provided, that:  The additional clinical reviewer selected under this subdivision (m)(4) shall use the same information to reach an opinion as the clinical reviewers who have already submitted their opinions pursuant to subsection (i);   The selection of the additional clinical reviewer under this subdivision (m)(4) shall not extend the time within which the external review organization is required to render a decision based on the opinions of the clinical reviewers selected under subsection (g).     The external review organization shall include in the notice provided pursuant to this subsection (m):  A general description of the reason for the request for external review;   The written opinion of each clinical reviewer, including the recommendation of each clinical reviewer as to whether the recommended or requested healthcare service or treatment should be covered and the rationale for the clinical reviewer's recommendation;   The date that the external review organization was notified by the health carrier to conduct the external review;   The date that the external review was conducted;   The date of external review organization's decision;   The principal reason or reasons for external review organization's decision; and   The rationale for the external review organization's decision.     Upon receipt of a notice of a decision reversing the adverse determination or final adverse determination, the health carrier shall immediately approve coverage of the recommended or requested healthcare service or treatment that was the subject of the adverse determination or final adverse determination. If the decision involved healthcare provider compensation, the health carrier shall make appropriate payment to the healthcare provider within ten (10) business days of the receipt of a notice of the decision from the external review organization.      Within six (6) months after the date of a notice of an adverse determination that involves a denial of coverage based upon the determination that the healthcare service or treatment recommended or requested is experimental or investigational, an aggrieved person may file a request for an expedited external review of the adverse determination. The covered person's treating physician must certify, in writing, that the recommended or requested healthcare service or treatment that is the subject of the request would be significantly less effective if not promptly initiated.   Upon notice of the request for expedited external review, the health carrier shall immediately determine whether the request meets the reviewability requirements of subsection (b). The health carrier shall immediately notify the aggrieved person of its eligibility determination.   The notice of initial determination shall include a statement informing the aggrieved person that a health carrier's initial determination that the request for external review is ineligible for review and may be appealed to the commissioner; provided, that:  The commissioner may determine that a request is eligible for external review notwithstanding a health carrier's initial determination that the request is ineligible and that it be referred to external review; and   In making a determination under subdivision (n)(3)(A), the commissioner's decision shall be made in accordance with the terms of the covered person's health benefit plan and shall be subject to all applicable provisions of this chapter.     Upon making a determination that a request is eligible for expedited external review, the health carrier shall immediately notify the aggrieved person in writing the request is eligible for external review.   At the same time, the health carrier shall immediately notify the external review organization and provide or transmit all necessary documents and information considered when making the adverse determination or final adverse determination electronically or by telephone, facsimile or any other expeditious method available.   Within one (1) business day after the receipt of the notice to conduct an expedited external review, the external review organization shall:  Select one (1) or more clinical reviewers, as it deems appropriate to conduct the expedited external review;   Based on the decision of the clinical reviewer or reviewers render a decision to uphold or reverse the decision of the adverse determination;   Require each clinical reviewer to provide an opinion, orally or in writing, to the external review organization as expeditiously as the covered person's medical condition or circumstances requires, but in no event more than five (5) days after being selected; and   If the opinion was not in writing, within forty-eight (48) hours following the date that the opinion was provided, require the clinical reviewer to provide written confirmation of the opinion to the external review organization and include the information required in subsections (k) and (l ).     Upon receipt of a notice of a decision reversing the adverse determination, the health carrier shall immediately approve the coverage of the recommended or requested healthcare service or treatment that was the subject of the adverse determination.     The health carrier, regardless of utilization review accreditation commission (URAC) accreditation, shall have a contract with at least two (2) or more external review entities and may give the aggrieved person the opportunity to select, from among the external review organizations that the health carrier has contracts with, the external review organization to conduct the review; provided, however, that the commissioner may require assignments of external review organizations on a random basis if such random assignment is required per the direction of the United States department of health and human services. The commissioner is hereby granted emergency rulemaking authority to implement random assignments pursuant to this subsection (o).   
  An external review decision is binding on the health carrier except to the extent that the health carrier has other remedies available under applicable federal or state law.   An external review decision is binding on the covered person except to the extent that the covered person has other remedies available under applicable federal or state law.   An external review decision is binding on the healthcare provider except to the extent that the healthcare provider has other remedies available under applicable federal or state law.   An aggrieved person may not file a subsequent request for external review involving the same adverse determination or final adverse determination for which the covered person has already received an external review decision pursuant to this chapter.   
  The commissioner shall approve external review organizations eligible to conduct external reviews under this chapter.   In order to be eligible for approval by the commissioner to conduct external reviews under this chapter, an external review organization:  Except as otherwise provided in this section, shall be accredited by a nationally recognized private accrediting entity that the commissioner has determined has external review organization accreditation standards that are equivalent to or exceed the minimum qualifications for external review organizations established under  56-61-121; and   Shall submit an application for approval in accordance with subsection (d).     The commissioner shall develop an application form for initially approving and for reapproving external review organizations to conduct external reviews.   Any external review organization wishing to be approved to conduct external reviews under this chapter shall submit the application form and include with the form all documentation and information necessary for the commissioner to determine if the external review organization satisfies the minimum qualifications established under  56-61-121.   Subject to subsection (b), an external review organization is eligible for approval under this section only if it is accredited by a nationally recognized private accrediting entity that the commissioner has determined has external review organization accreditation standards that are equivalent to or exceed the minimum qualifications for external review organizations under  56-61-121.   The commissioner may approve external review organizations that are not accredited by a nationally recognized private accrediting entity if there are no acceptable nationally recognized private accrediting entities providing external review organization accreditation.   The commissioner may charge an application fee that external review organizations shall submit to the commissioner with an application for approval and reapproval.   An approval is effective for two (2) years, unless the commissioner determines before its expiration that the external review organization is not satisfying the minimum qualifications established under  56-61-121. Whenever the commissioner determines that an external review organization has lost its accreditation or no longer satisfies the minimum requirements established under  56-61-121, the commissioner shall terminate the approval of the external review organization and remove the external review organization from the list of external review organizations approved to conduct external reviews under this chapter that is maintained by the commissioner pursuant to subsection (i).   The commissioner shall maintain and periodically update a list of approved external review organizations.   The commissioner may promulgate rules and regulations to carry out  this section.   
  To be approved under  56-61-120 to conduct external reviews, an external review organization shall have and maintain written policies and procedures that govern all aspects of both the standard external review process and the expedited external review process set forth in this chapter that include, at a minimum:  A quality assurance mechanism in place that:  Ensures that external reviews are conducted within the specified timeframes and required notices are provided in a timely manner;   Ensures the selection of qualified and impartial clinical reviewers to conduct external reviews on behalf of the external review organization; suitable matching of reviewers to specific cases; and that the independent review organization employs or contracts with an adequate number of clinical reviewers to meet this objective;   Ensures the confidentiality of medical and treatment records and clinical review criteria; and   Ensures that any person employed by or under contract with the external review organization adheres to the requirements of this chapter;     A toll-free telephone service to receive information on a twenty-four-hour a day, seven-day a week basis related to external reviews that is capable of accepting, recording or providing appropriate instruction to incoming telephone callers during hours outside of normal business hours; and   Agree to maintain and provide to the commissioner the information set out in  56-61-125.     All clinical reviewers assigned by an external review organization to conduct external reviews shall be physicians or other appropriate healthcare providers who meet the following minimum qualifications:  Be an expert in the treatment of the covered person's medical condition that is the subject of the external review;   Be knowledgeable about the recommended healthcare service or treatment through recent or current actual clinical experience treating patients with the same or similar medical condition of the covered person;   Hold a nonrestricted license in a state of the United States and, for physicians, a current certification by a recognized American medical specialty board in the area or areas appropriate to the subject of the external review; and   Have no history of disciplinary actions or sanctions, including loss of staff privileges or participation restrictions, that have been taken or are pending by any hospital, governmental agency or unit, or regulatory body that raise a substantial question as to the clinical reviewer's physical, mental or professional competence or moral character.     In addition to the requirements set forth in subsection (a), an external review organization may not own or control, be a subsidiary of or in any way be owned or controlled by, or exercise control with a health benefit plan, a national, state or local trade association of health benefit plans, or a national, state or local trade association of healthcare providers.   In addition to the requirements set forth in subsections (a), (b) and (c), to be approved pursuant to  56-61-122 to conduct an external review of a specified case, neither the external review organization selected to conduct the external review nor any clinical reviewer assigned by the external organization to conduct the external review may have a material professional, familial or financial conflict of interest with any of the following:  The health carrier that is the subject of the external review;   The covered person whose treatment is the subject of the external review or the covered person's authorized representative;   Any officer, director or management employee of the health carrier that is the subject of the external review;   The healthcare provider, the healthcare provider's medical group or independent practice association recommending the healthcare service or treatment that is the subject of the external review;   The facility at which the recommended healthcare service or treatment would be provided; or   The developer or manufacturer of the principal drug, device, procedure or other therapy being recommended for the covered person whose treatment is the subject of the external review.     In determining whether an external review organization or a clinical reviewer of the external review organization has a material professional, familial or financial conflict of interest for purposes of subsection (d), the commissioner shall take into consideration situations where the external review organization conducting an external review of a specified case or a clinical reviewer to be assigned by the external review organization to conduct an external review of a specified case may have an apparent professional, familial or financial relationship or connection with a person described in subsection (d), but that the characteristics of that relationship or connection are such that they are not a material professional, familial or financial conflict of interest that results in the disapproval of the independent review organization or the clinical reviewer from conducting the external review.   An external review organization that is accredited by a nationally recognized private accrediting entity that has external review accreditation standards that the commissioner has determined are equivalent to or exceed the minimum qualifications of this section shall be presumed in compliance with this section to be eligible for approval under  56-61-122.   The commissioner shall initially review and periodically review the external review organization accreditation standards of a nationally recognized private accrediting entity to determine whether the entity's standards are, and continue to be, equivalent to or exceed the minimum qualifications established under this section. The commissioner may accept a review conducted by NAIC for the purpose of the determination under this subsection (g).   Upon request, a nationally recognized private accrediting entity shall make its current external review organization accreditation standards available to the commissioner or NAIC in order for the commissioner to determine if the entity's standards are equivalent to or exceed the minimum qualifications established under this section. The commissioner may exclude any private accrediting entity that is not reviewed by NAIC.   An external review organization shall be unbiased. An external review organization shall establish and maintain written procedures to ensure that it is and remains unbiased in addition to any other procedures required under this section.   
 No external review organization or clinical reviewer working on behalf of an external review organization or an employee, agent or contractor of an external review organization shall be liable in damages to any person for any opinions rendered or acts or omissions performed within the scope of the organization's or person's duties under the law during or upon completion of an external review conducted pursuant to this chapter, unless the opinion was rendered or act or omission performed in bad faith or involved gross negligence.  
  An external review organization conducting an external review pursuant to this chapter shall maintain written records in the aggregate by state and by health carrier on all requests for external review for which it conducted an external review during a calendar year and, upon request, submit a report to the commissioner, as required under subdivision (a)(2).  Each external review organization required to maintain written records on all requests for external review for which it conducted an external review shall submit to the commissioner, upon request, a report in the format specified by the commissioner.   The report shall include in the aggregate by state, and for each health carrier:  The total number of requests for external review;   The number of requests for external review resolved and, of those resolved, the number resolved upholding the adverse determination or final adverse determination and the number resolved reversing the adverse determination or final adverse determination;   The average length of time for resolution;   A summary of the types of coverages or cases for which an external review was sought, as provided in the format required by the commissioner;   The number of external reviews pursuant to  56-61-116 that were terminated as the result of a reversal by the health carrier of its adverse determination or final adverse determination after the receipt of additional information from the aggrieved person; and   Any other information that the commissioner may request or require.     The external review organization shall retain the written records required pursuant to this subsection (a) for at least three (3) years.     Each health carrier shall maintain written records in the aggregate, by state and for each type of health benefit plan offered by the health carrier on all requests for external review that the health carrier receives notice of from the commissioner pursuant to this chapter.  Each health carrier required to maintain written records on all requests for external review pursuant to this subsection (b) shall submit to the commissioner, upon request, a report in the format specified by the commissioner.   The report shall include in the aggregate, by state, and by type of health benefit plan:  The total number of requests for external review;   From the total number of requests for external review reported under subdivision (b)(2)(A), the number of requests determined eligible for a full external review; and   Any other information that the commissioner may request or require.     The health carrier shall retain the written records required pursuant to this subsection (b) for at least three (3) years.     
 The health carrier against which a request for a standard external review or an expedited external review is filed shall pay the cost of the external review organization for conducting the external review.  
  Each health carrier shall include a description of the external review procedures in or attached to the membership booklet, provider manual, and health carrier's web site. The health carrier may include a description of the external review procedures in the policy, certificate, outline of coverage, or other evidence of coverage provided to covered persons and providers.   The disclosure required by subsection (a) shall be in a format prescribed by the commissioner.   The description required under subsection (a) shall include a statement that informs the aggrieved person of the aggrieved person's right to file a request for an external review of an adverse determination or final adverse determination with the carrier. The statement shall include the telephone number and address of the commissioner.   In addition to subsection (b), the statement shall inform the covered person that, when filing a request for an external review, the covered person will be required to authorize the release of any medical records of the covered person that may be required to be reviewed for the purpose of reaching a decision on the external review.   
  A contract of insurance is an agreement by which one party, for a consideration, promises to pay money or its equivalent, or to do some act of value to the assured, upon the destruction or injury, loss or damage of something in which the other party has an insurable interest; and it is unlawful for any company to make any contract of insurance upon or concerning any property or interests or lives in this state, or with any resident of this state, or for any person, as insurance agent or insurance broker, to make, negotiate, solicit, or in any manner aid in the transaction of the insurance, unless and except as authorized under this title; but nothing contained in this chapter and Chapters 1 4 and 6 of this title, with the exception of the Easy to Read Life and Health Insurance Policy Act, compiled in part 16 of this chapter, shall affect the rights and powers of corporations engaged in the transaction of life and casualty insurance upon the assessment plan.    Agreements made by a religious, charitable, or nonprofit corporation or association to accept donations of whole blood in return for a promise by the organization to furnish to the donor and the donor's immediate family, upon the happening of any illness or injury, benefits not exceeding one hundred dollars ($100) in value, payable either in cash or blood, shall not be deemed to be a contract of insurance within the meaning of this title.   Agreements made by colleges or universities operating accredited medical schools, or by hospitals or clinics operated by or affiliated with the college or university under which the college or university, hospital, or clinic binds itself to indemnify physicians, nurses, other professional employees or faculty, or medical, nursing or allied health students of the college or university for the legal liability of the physician, nurse, or other professional health care employee, or student for loss, damage, or expense incident to a claim arising out of the death or injury of any person as the result of negligence or health care liability in rendering professional service by the employee or student shall not be deemed to be contracts of insurance within the meaning of this title. The college or university making the agreements shall be required to establish and maintain a distinct reserve fund with which basic health care liability coverage will be provided in an amount at least equivalent to the existing basic Joint Underwriting Association aggregate annual level of coverage.    A contract entered into between a tax preparation service company and a taxpayer, providing for the tax preparation service company to pay the additional tax liability, penalties or interest imposed by a taxing authority on the taxpayer as a result of an error of the tax preparation service, shall not be deemed to constitute a contract of insurance, as long as the tax preparation service has secured, on a form approved by the commissioner, a surety bond from an insurance company licensed in this state for a penal sum in an amount to be determined by the commissioner, which amount shall be not less than one hundred thousand dollars ($100,000), but not more than five hundred thousand dollars ($500,000), with respect to the statewide operations of the tax preparation service and its franchisees engaged in the tax preparation business. In the alternative, the commissioner may accept a deposit of cash or securities in the amount of not less than one hundred thousand dollars ($100,000), but not more than five hundred thousand dollars ($500,000). This bond or deposit shall be subject to suit by the state and by any person who has a cause of action arising from a contract subject to this subdivision (b)(3).   The commissioner may promulgate rules and regulations necessary or appropriate to carry out subdivision (b)(3)(A), in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.       
  Every policy of insurance, issued to or for the benefit of any citizen or resident of this state on or after July 1, 1907, by any insurance company or association doing business in this state, except fraternal beneficiary associations and mutual insurance companies or associations operating on the assessment plan, or policies of industrial insurance, shall contain the entire contract of insurance between the parties to the contract, and every contract so issued shall be held as made in this state and construed solely according to the laws of this state.   A policy of insurance is a contract and the rules of construction used to interpret a policy of insurance are the same as any other contract.   A policy of insurance must be interpreted fairly and reasonably, giving the language of the policy of insurance its ordinary meaning.   A policy of insurance must be construed reasonably and logically as a whole.   An insurance company's duty to defend depends solely on the allegations contained in the underlying complaint describing acts or events covered by the policy of insurance. This subsection (e) does not impose a duty to defend on an insurance company that has no duty to defend pursuant to this title or that has an express exclusion of the duty to defend in the policy of insurance.   An insurance company may determine its obligations under a policy of insurance as to any and all parties or claimants through a declaratory judgment action, an interpleader claim or action, or both. The filing of such action or claim creates a rebuttable presumption the insurance company is acting in good faith when making a determination of its obligations under a policy of insurance.   
 No written or oral misrepresentation or warranty made in the negotiations of a contract or policy of insurance, or in the application for contract or policy of insurance, by the insured or in the insured's behalf, shall be deemed material or defeat or void the policy or prevent its attaching, unless the misrepresentation or warranty is made with actual intent to deceive, or unless the matter represented increases the risk of loss.  
 No policy of insurance issued to a citizen of this state by an authorized company organized under the laws of a foreign country shall be invalidated by the occurrence of hostilities between the foreign country and the United States.  
  The insurance companies of this state, and foreign insurance companies and other persons or corporations doing an insurance or fidelity bonding business in this state, in all cases when a loss occurs and they refuse to pay the loss within sixty (60) days after a demand has been made by the holder of the policy or fidelity bond on which the loss occurred, shall be liable to pay the holder of the policy or fidelity bond, in addition to the loss and interest on the bond, a sum not exceeding twenty-five percent (25%) on the liability for the loss; provided, that it is made to appear to the court or jury trying the case that the refusal to pay the loss was not in good faith, and that the failure to pay inflicted additional expense, loss, or injury including attorney fees upon the holder of the policy or fidelity bond; and provided, further, that the additional liability, within the limit prescribed, shall, in the discretion of the court or jury trying the case, be measured by the additional expense, loss, and injury including attorney fees thus entailed.   In any action against an unauthorized foreign or alien insurer or bonding company upon a contract of insurance or fidelity bond issued or delivered in this state to a resident of this state or to a corporation authorized to do business in this state, if the insurer or bonding company has failed for thirty (30) days after demand prior to commencement of the action to make payment in accordance with the terms of the contract or fidelity bond, and it appears to the court that the refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include the fee in any judgment that may be rendered in the action. The fee shall not exceed twelve and one half percent (12.5%) of the amount that the court or jury finds the plaintiff is entitled to recover against the insurer or bonding company, but in no event shall the fee be less than twenty-five dollars ($25.00). Failure of an insurer or bonding company to defend the action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.   
 In the event it is made to appear to the court or jury trying the cause that the action of the policyholder in bringing the suit was not in good faith, and recovery under the policy is not had, the policyholder shall be liable to the insurance company, corporation, firm, or person in a sum not exceeding twenty-five percent (25%) of the amount of the loss claimed under the policy; provided, that the liability, within the limits prescribed, shall, in the discretion of the court or jury trying the cause, be measured by the additional expense, loss, or injury inflicted upon the defendant by reason of the suit.  
 In any action against an insurance company by the holder of a certificate issued under a policy of group insurance, the defendant shall be required to attach to its pleading in the action a copy of a group insurance policy under which the certificate was issued, on which suit is brought, and the copy shall be receivable in evidence, without any cost to plaintiff, and the copy shall be duly attested and sworn to.  
 Notwithstanding any other law, the mortality tables adopted by the National Association of Insurance Commissioners (NAIC) for life insurance contracts may be used by insurers to determine adjusted premiums, present values and reserve values, within any limitations of application as specified by NAIC. Mortality tables adopted by NAIC may be used by insurers pursuant to this section beginning on or after January 1 of the year following adoption by NAIC, unless the commissioner rejects the table by issuing a bulletin posted on the department's web site and mailed to all domestic companies holding a certificate of authority to write life insurance in the state. A mortality table rejected by the commissioner may be subsequently adopted or modified by the commissioner pursuant to a rulemaking in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
  Definitions.  As used in this section:   Clean claim means a claim received by a health insurance entity for adjudication that requires no further information, adjustment or alteration by the provider of the services in order to be processed and paid by the health insurer. A claim is clean if it has no defect or impropriety, including any lack of any required substantiating documentation, or particular circumstance requiring special treatment that prevents timely payment from being made on the claim under this section;   Clean claim does not include a duplicate claim;   Clean claim does not include any claim submitted more than ninety (90) days after the date of service; and   Clean claim includes resubmitted paper claims with previously identified deficiencies corrected;     Duplicate claim means an original claim and its duplicate, when the duplicate is filed within thirty (30) days of the original claim;   Health insurance coverage means benefits consisting of medical care, provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care, under any policy, certificate or agreement offered by a health insurance entity; provided, that health insurance coverage does not include policies or certificates covering only accident, credit, disability income, long-term care, hospital indemnity, medicare supplement as defined in  1882(g)(1) of the Social Security Act (42 U.S.C.  1395ss(g)(1)), specified disease, other limited benefit health insurance, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that are statutorily required to be contained in any liability insurance policy or equivalent self-insurance;   Health insurance entity means an entity subject to the insurance laws of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide health insurance coverage, including, but not limited to, an insurance company, a health maintenance organization and a nonprofit hospital and medical service corporation;   Pay means that the health insurance entity shall either send the provider cash or a cash equivalent in full satisfaction of the allowed portion of the claim, or give the provider a credit against any outstanding balance owed by that provider to the health insurance entity. Payment shall occur on the date when the cash, cash equivalent or notice of credit is mailed or otherwise sent to the provider; and   Submitted means that the provider either mails or otherwise sends a claim to the health insurance entity. Submission shall occur on the date the claim is mailed or otherwise sent to the health insurance entity.     Prompt Payment Standards.   Not later than thirty (30) calendar days after the date that a health insurance entity actually receives a claim submitted on paper from a provider, a health insurance entity shall:   If the claim is clean, pay the total covered amount of the claim;   Pay the portion of the claim that is clean and not in dispute and notify the provider in writing why the remaining portion of the claim will not be paid; or   Notify the provider in writing of all reasons why the claim is not clean and will not be paid and what substantiating documentation and information is required to adjudicate the claim as clean.     Not later than twenty-one (21) calendar days after receiving a claim by electronic submission, a health insurance entity shall:   If the claim is clean, pay the total covered amount of the claim;   Pay the portion of the claim that is clean and not in dispute and notify the provider why the remaining portion of the claim will not be paid; or   Notify the provider of the reason why the claim is not clean and will not be paid and what substantiating documentation or information is required to adjudicate the claim.       No paper claim may be denied upon resubmission for lack of substantiating documentation or information that has been previously provided by the health care provider.   Health insurance entities shall timely provide contracted providers with all necessary information to properly submit a claim.   Any health insurance entity that does not comply with subdivision (b)(1) shall pay one percent (1%) interest per month, accruing from the day after the payment was due, on that amount of the claim that remains unpaid.     Regulatory Oversight.  The commissioner shall ensure, as part of the department's ongoing regulatory oversight of health insurance entities, that health insurance entities properly process and pay claims in accordance with this section.   If the commissioner finds a health insurance entity has failed during any calendar year to properly process and pay ninety-five percent (95%) of all clean claims received from all providers during that year in accordance with this section, the commissioner may levy an aggregate penalty up to ten thousand dollars ($10,000). If the commissioner finds a health insurance entity has failed during any calendar year to properly process and pay eighty-five percent (85%) of all clean claims received from all providers during that year in accordance with this section, the commissioner may levy an aggregate penalty in an amount of not less than ten thousand dollars ($10,000) nor more than one hundred thousand dollars ($100,000), if reasonable notice in writing is given of the intent to levy the penalty. If the commissioner finds a health insurance entity has failed during any calendar year to properly process and pay sixty percent (60%) of all clean claims received from all providers during that year in accordance with this section, the commissioner may levy an aggregate penalty in an amount of not less than one hundred thousand dollars ($100,000) nor more than two hundred thousand dollars ($200,000). In determining the amount of any fine, the commissioner shall take into account whether the failure to achieve the standards in this section is due to circumstances beyond the health insurance entity's control and whether the health insurance entity has been in the business of processing claims for two (2) years or less. The health insurance entity may request an administrative hearing contesting the assessment of any administrative penalty imposed by the commissioner within thirty (30) days after receipt of the notice of the assessment.   The commissioner may issue an order directing a health insurance entity or a representative of a health insurance entity to cease and desist from engaging in any act or practice in violation of this section. Within fifteen (15) days after service of the cease and desist order, the respondent may request a hearing on the question of whether acts or practices in violation of this act have occurred.   All hearings under this part shall be conducted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   In the case of any violations of this section, if the commissioner elects not to issue a cease and desist order, or in the event of noncompliance with a cease and desist order issued by the commissioner, the commissioner may institute a proceeding to obtain injunctive or other appropriate relief in the chancery court of Davidson County.   Examinations to determine compliance with this section may be conducted by the commissioner's staff. The commissioner may, if necessary, contract with qualified impartial outside sources to assist in examinations to determine compliance with this section. The expenses of the examinations shall be assessed against health maintenance organizations in accordance with  56-32-115. For other health insurance entities, the commissioner shall bill the expenses of the examinations to those entities in accordance with  56-1-413.     Rules and regulations.  The commissioner shall adopt rules and regulations to ensure effective compliance with this section.   
  As used in this part:  Covered person means a person on whose behalf a health insurance entity offering health insurance coverage is obligated to pay benefits or provide services;   Health care provider means any person or entity performing services regulated pursuant to title 63 or title 68, chapter 11;   Health insurance coverage has the same meaning as in  56-7-109;   Health insurance entity has the same meaning as in  56-7-109; and   Recoupment means the action by a health insurance entity to recover amounts previously paid to a health care provider by withholding or setting off the amounts against current payments to the health care provider.     A health insurance entity shall not be required to correct a payment error to a health care provider if the provider's request for a payment correction is filed more than eighteen (18) months after the date that the health care provider received payment for the claim from the health insurance entity.   Except in cases of fraud committed by the health care provider, a health insurance entity may only recoup reimbursements to the provider during the eighteen-month period after the date that the health insurance entity paid the claim submitted by the health care provider.   A health insurance entity that recoups reimbursement to a health care provider under this section shall give the health care provider a written or electronic statement specifying the basis for the recoupment and the statement shall contain, at a minimum, the information required by subsection (g).    If a health insurance entity determines that payment was made for services not covered under the covered person's health insurance coverage, the health insurance entity shall give written notice to the health care provider of its intent to recoup a previously paid claim and may:  Request a refund from the health care provider; or   Make a recoupment of the payment from the health care provider in accordance with subsection (g).     The notice required by subdivision (e)(1) may be included in the results of an audit submitted to the health care provider.     Notwithstanding subsection (c), if a health insurance entity or an agent contracted to provide eligibility verification, verifies that an individual is a covered person and if the health care provider provides services to the individual in reliance on the verification, the health insurance entity may not thereafter recoup a claim on the basis that the individual is not a covered person unless the recoupment occurs within six (6) months of the date that the health insurance entity paid the claim; otherwise, the health insurance entity is barred from making the recoupment unless there was fraud by the health care provider.   If a health insurance entity chooses to recoup from a health care provider amounts previously paid pursuant to subsection (c) or (e), the health insurance entity shall provide the health care provider written documentation that specifies:  The amount of the recoupment;   The covered person's name to whom the recoupment applies;   The patient identification number;   The date or dates of service;   The service or services on which the recoupment is based; and   The pending claims being recouped or that future claims will be recouped.      If the commissioner finds a health insurance entity has failed to comply with this section, the commissioner may impose a penalty of two (2) times the amount of the claim or seven hundred fifty dollars ($750), whichever amount is less.   In the alternative, the health care provider may seek injunctive or other appropriate relief in the chancery or circuit court in the county where the provider resides or practices.     The commissioner shall adopt rules and regulations to ensure compliance with this section. The rules shall be adopted in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, and may be promulgated by emergency rulemaking.   This section shall not be waived, voided or nullified by contract; provided, however, that the health insurance entity and the health care provider are permitted to toll the time periods contained in subsections (c) and (f) through mutually negotiated and separate tolling agreements if both parties agree to toll or extend the time periods established by subsections (c) and (f).    This section shall not interfere or otherwise repeal the following:  The prompt payment appeals process described in  56-32-126;   The authority of a receiver appointed by the commissioner pursuant to chapter 9 of this title to audit or collect overpayment made to providers more than eighteen (18) months from the date that the managed care organization (MCO) paid the claim;   The authority of the TennCare bureau to collect overpayments made to providers more than eighteen (18) months from the date that the MCO paid the claim if discovered and verified by the bureau pursuant to an audit of an MCO; or   The subrogation rights or authority of the TennCare bureau.     Health insurance entities that contract directly with the TennCare bureau in the provision of services for TennCare recipients are specifically excluded from this section only for the products and services made by the health insurance entities on behalf of the TennCare bureau.     In order to ensure that the original intent of this section is followed and to prevent any entity from circumventing the time frames established by this section, only a health insurance entity, or the health insurance entity's agent, that contracts with health care providers or is responsible for paying contracted or noncontracted health care providers may seek to recover any payments made to those health care providers. No other entity may pursue recoupments governed by this section.   
 When insured property losses in excess of one thousand dollars ($1,000) accrue to the owners of dwellings or other structures insured under policies of property or casualty insurance as defined in  56-2-201, the insurance company shall name the general contractor, as defined in  62-6-102, of any uncompleted construction or building contract as a payee on the draft to the owner covering payment for the loss. The insurance company shall name the general contractor as payee on the draft pursuant to this section regardless of whether the work that was performed or is yet to be performed is less than twenty-five thousand dollars ($25,000).  
 Deferred individual annuity contracts, except variable annuity contracts as provided for in chapter 3, part 5 of this title, filed for approval after July 1, 1976, or issued after July 1, 1977, must provide upon surrender of the contract guaranteed values in the form of a cash value or paid up annuity that are equal to or greater than the following minimum standards:   In the case of contracts providing level premiums or considerations, the minimum cash value shall not be less than fifty percent (50%) of the annual premium or consideration in the first policy year, plus eighty-five percent (85%) of the premiums or considerations for the second to the tenth policy years inclusive, plus ninety percent (90%) of the premiums or considerations after the tenth policy year, all accumulated at not less than three percent (3%) interest. The annual premiums to be accumulated may be diminished by a policy fee not greater than twenty dollars ($20.00) per year;   In the case of contracts providing premiums or considerations that may vary in amount, the minimum values shall be determined according to the same principles as described in subdivision (1), the cash value attributable to an increase in premium or consideration being computed on the basis of fifty percent (50%) of the excess of the premium or consideration over the largest premium or consideration paid in any prior contract year;   In the case of a single premium policy, the minimum cash value shall be equal to at least ninety percent (90%) of the single premium or consideration accumulated at not less than three percent (3%) interest; and   The contract shall provide that the company shall reserve the right to defer payment of the cash values for six (6) months after application for payment is made.   
  For purposes of this section:  Cancel means to terminate a homeowner's insurance policy prior to the expiration of the policy period;   Claim:  Means an oral, written, or electronic submission for payment filed by an insured, on behalf of the insured, or by a third party whereby an insurance company accepts the submission for payment in accordance with the insurance company's reasonable submission standards; and   Does not mean an inquiry by an insured or by an insurance producer on behalf of an insured;     Inquiry means any communication to an insurance company by an insured, or by an insurance producer on behalf of an insured, regarding general terms and conditions of a homeowner's insurance policy, including a communication concerning whether a homeowner's insurance policy provides coverage for a type of event or the process for filing a claim; and   Insurance company has the same meaning as defined in  56-1-102.     No insurance company shall increase a premium or cancel a homeowner's insurance policy solely on the basis of an inquiry or inquiries by an insured regarding the insured's homeowner's insurance policy or a loss under the policy.   Notwithstanding the foregoing, if a communication by an insured to an insurance company necessitates an investigation by the insurance company which results in a written finding that there has been a change in a known condition or use of the premises or a fraudulent act by the consumer, then the insurance company may consider the communication to be either a claim or an inquiry.   A violation of this section shall be considered an unfair trade practice under the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title.   
  For purposes of this section:  Casualty insurance has the same meaning as defined in  56-2-201;   Certificate of insurance:  Means a document or instrument prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage; and   Does not include a policy of insurance, insurance binder, policy endorsement, or automobile insurance identification or information card;     Governmental entity means any political subdivision of this state, including, but not limited to, any incorporated city or town, metropolitan government, county, utility district, or school district;   Insurance producer means a person licensed to sell, solicit, or negotiate property or casualty insurance under the laws of this state;   Insurer means a person duly licensed to transact a property or casualty insurance business in this state;   Person means any individual, partnership, corporation, association, or other legal entity, including any governmental entity; and   Property insurance has the same meaning as defined in  56-2-201.     A certificate of insurance is not a policy of insurance and does not amend, extend, or alter the coverage afforded by the policy to which the certificate of insurance refers. A certificate of insurance does not confer any rights beyond what the referenced policy of insurance expressly provides.   A person shall not:  Prepare, issue, request, or require the issuance of a certificate of insurance that contains any false or misleading information concerning the policy of insurance referenced in the certificate of insurance;   Prepare, issue, request, or require the issuance of a certificate of insurance that purports to alter, amend, or extend the coverage provided by the policy of insurance referenced in the certificate of insurance; or   Alter or modify a certificate of insurance after issuance.     A certificate of insurance must not warrant that the policy of insurance referenced in the certificate of insurance complies with the insurance or indemnification requirements of a contract. The inclusion of a contract number or description within a certificate of insurance does not warrant that the policy of insurance referenced in the certificate of insurance complies with the insurance or indemnification requirements of a contract.   An insurer must provide a person with notice of a cancellation, nonrenewal, material change, or any similar notice concerning a policy of insurance only if the person has a right to the notice under the terms of the policy of insurance, an endorsement to the policy, or state law. The policy of insurance, an endorsement to a policy of insurance, and state law govern the terms and conditions of any notice under this subsection (e), including the required timing of the notice.   This section applies to all certificates of insurance issued in connection with property insurance or casualty insurance risks located in this state, regardless of where the policyholder, insurer, insurance producer, or person requesting or requiring the issuance of a certificate of insurance is located.   A certificate of insurance, or any other document or correspondence relative to a certificate of insurance, prepared, issued, requested, or required in violation of this section is void.   The commissioner, in accordance with  56-6-120, may examine and investigate the activities of any person that the commissioner reasonably believes engaged in, or is currently engaging in, an act or practice prohibited by this section.   If a person intentionally violates this section, then the commissioner may take any of the following actions:  Issue an order requiring the person to cease and desist from the actions constituting the violation; and   Assess a civil penalty of not more than one thousand dollars ($1,000) per violation.     This section does not limit the authority of the commissioner to investigate conduct, enforce compliance, or issue penalties under this title.   The commissioner may promulgate rules pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to carry out this section.   
  All insurance companies issuing health care liability insurance policies to physicians licensed to practice medicine in this state shall issue policies covering physicians of all classifications of practice; provided, that this subsection (a) shall not be construed to require the issuance of a policy contrary to established underwriting practices.   This section shall not be construed to prevent an insurance company issuing health care liability insurance policies to physicians licensed in the state from limiting the amount of the coverage of the policies or from making a premium surcharge for the insurance in accordance with established underwriting practices.   
  No group medical benefit contract issued by an insurance company, a hospital service corporation, a hospital and medical service corporation, a medical service corporation, a health maintenance organization or a health care center, that provides coverage for prescription drugs, may require any person covered under the contract to obtain prescription drugs from a mail-order pharmacy in order to obtain benefits for the drugs, or to pay an additional fee or be subjected to any other penalty for failing to utilize any mail-order pharmacy designated by the insurance company or other issuing organization.   The commissioner is authorized to promulgate regulations to implement and enforce this section.   
 Any insurance company that increases its premiums shall give thirty (30) days' notice of any increase to a customer who has an account paid by bank draft or preauthorized check.  
 Any employer or educational institution may accept, and a duly licensed doctor of chiropractic may issue, an excuse for the absence of an employee or student. Nothing in this section shall be construed to require the insurer of the employee or student to pay for the service or include it within the scope of coverage of any insurance policy.  
  Notwithstanding any law to the contrary, if a policy of insurance issued in this state provides for coverage of health care rendered by a healthcare provider covered under title 63, the insured or other persons entitled to benefits under the policy are entitled to assign their benefits to the healthcare provider and such rights must be stated clearly in the policy. Notice of the assignment must be in writing to the insurer in order to be effective unless otherwise stated in the policy.   As used in this section:  Emergency medical services means the services used in responding to the perceived individual need for immediate medical care in order to prevent loss of life or aggravation of physiological or psychological illness or injury;   Health insurance coverage:  Means benefits consisting of medical care, provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care, under any policy, certificate, or agreement offered by a health insurance entity; and   Does not include policies or certificates covering only accident, credit, disability income, long-term care, hospital indemnity, medicare supplement as defined in 42 U.S.C.  1395ss(g)(1), specified disease, other limited benefit health insurance, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that are statutorily required to be contained in any liability insurance policy or equivalent self-insurance;     Healthcare facility means a hospital as defined in  68-11-201, or an ambulatory surgical treatment center as defined in  68-11-201;   Healthcare provider means any doctor of medicine, osteopathy, dentistry, chiropractic, podiatry, or optometry; a pharmacist or pharmacy; a hospital; a home health agency; an entity providing infusion therapy services; or an entity providing medical equipment services;   lnsured means any person who has health insurance coverage as defined in  56-7-109 through a health insurance entity as defined in  56-7-109; and   Stabilized means, with respect to an emergency medical condition, that no material deterioration of the condition is likely, within a reasonable medical probability, to result from or occur during transfer of the individual from a facility.      For purposes of this subsection (c):  ln-network healthcare facility means a healthcare facility that has a current contract provider agreement with the insured's insurer; and   Out-of-network facility-based physician means a physician:   To whom a participating healthcare facility has granted clinical privileges;   Who provides services to patients of the participating healthcare facility pursuant to those clinical privileges; and   Who does not have a current contract or provider agreement with the insured's insurer.       An insured's assignment of benefits, pursuant to subsection (a), may be disregarded by an insurer if:  The assignment of benefits is to an out-of-network facility-based physician; and   The following conditions are not satisfied:   The healthcare facility provides written notice to the insured, or the insured's personal representative, that includes the following:  A statement that the out-of-network facility-based physician may not have a current contract provider agreement with the insured's insurer;   A statement that the insured agrees to receive medical services by an out-of-network healthcare provider and will receive a bill for one hundred percent (100%) of billed charges for the amount unpaid by the insured's insurer;   The estimated amount of copay, deductible, or coinsurance, or range of estimates that the facility will charge the insured for scheduled items or services provided by the facility in accordance with the insured's health benefit coverage for the items and services or as estimated by the insurance company on its website for its insured or through the available information to the facility at the time of prior authorization; and   A listing of anesthesiologists, radiologists, emergency room physicians, and pathologists or the groups of such healthcare providers with which the facility has contracted, including the healthcare provider or group name, phone number, and website;     The insured or the insured's personal representative signs the written notice, acknowledging agreement to receive medical services by an out-of-network provider or should the insured or insured's personal representative refuse to sign the written notice, the healthcare facility documents in the patient's medical record that it provided the notice and that the patient refused to sign the notice; and   The written notice includes the following statement:    The physicians and other healthcare providers that may treat the patient at this facility may not be employed by this facility and may not participate in the patient's insurance network.   Anesthesiologists, radiologists, emergency room physicians, and pathologists are not employed by this facility. Services provided by those specialists, among others, will be billed separately.   Before receiving services, the patient should check with his or her insurance carrier to find out if the patient's providers are in-network. Otherwise, the patient may be at risk of higher out-of-network charges.         The written notice required by subdivision (c)(2)(B) must be provided to the insured, or the insured's personal representative, prior to when the insured first receives services from the out-of-network facility-based physician. If the insured is receiving medical services through a hospital emergency department or is incapacitated or unconscious at the time of receiving services, the written notice is not required until the insured is stabilized.   The failure of the healthcare facility to provide the notice required by subdivision (c)(2)(B) does not give rise to any right of indemnification or private cause of action against the healthcare facility by an out-of-network facility-based physician for an insurer's disregard of an insured's assignment of benefits unless:  The healthcare facility's failure to provide the written notice is due to willful or wanton misconduct of an agent of the healthcare facility; and   The out-of-network facility-based physician provides the insured a billing statement that:   Contains an itemized listing of the services and supplies provided along with the dates when the services and supplies were provided;   Contains a conspicuous, plain language explanation that:  The out-of-network facility-based physician does not have a current contract provider agreement with the insured's insurer; and   The insurer has paid a rate, as determined by the insurer, that is below the out-of-network facility-based physician's billed amount;     Contains a telephone number to call to discuss the billing statement; provide an explanation of any acronyms, abbreviations, and numbers used on the statement; or discuss any payment issues;   Contains a statement that the insured may call the telephone number described in subdivision (d)(2)(B)(iii) to discuss alternative payment arrangements;   For billing statements that total an amount greater than two hundred dollars ($200), over any applicable copayments, coinsurance, or deductibles, states, in plain language, that if the insured finalizes a payment plan agreement within forty-five (45) days of receiving the first billing statement and substantially complies with the agreement, the out-of-network facility-based physician shall not furnish adverse information to a consumer reporting agency regarding an amount owed by the insured. For purposes of this subdivision (d)(2)(B)(v), a patient is considered out of substantial compliance with the payment plan agreement if the payments are not made in compliance with the agreement for a period of forty-five (45) days; and   Contains a telephone number for the department and a clear and concise statement that the insured may call the department to complain about any out-of-network charges.       Nothing in this subsection (d) applies to accident-only, specified disease, hospital indemnity, medicare supplement, long-term care, or other limited benefit hospital insurance policies.     An in-network healthcare facility does not need to provide an insured with the notice required in subdivision (c)(2) if the healthcare facility employs all facility-based physicians or requires all facility-based physicians to participate in all of the insurance networks in which the healthcare facility is a participating provider or if the healthcare facility contractually prohibits all facility-based physicians from balance billing patients in excess of the cost sharing amount required in accordance with the insured's health benefits coverage for the items and services provided.   
 Notwithstanding any other law to the contrary, an insurer may exclude coverage pursuant to a contractual agreement; provided, that the exclusion complies with this title.  
 A provider shall not be prohibited by a health plan, by contract or otherwise, from disclosing to a patient the existence of financial arrangements with the health plan that reward the provider for reducing or limiting the range and amount of medically necessary and appropriate services rendered to the patients enrolled in the health plan.  
  Every insurance policy, issued to or for the benefit of any citizen or resident of this state, shall be written in the English language.   Nothing in this part shall prohibit an insurer from advertising or providing information or translations to consumers in a language other than English; provided, that the advertisement or informational materials clearly state the insurance policy being advertised is available only in English.   In the event of a dispute, the language contained in the insurance policy is controlling and any advertisement or informational materials used by an insurer shall not be construed to modify or change the insurance policy.   Notwithstanding subsection (c), the use of any advertising or informational materials by any person, without regard as to the language in which the materials are written, that materially contradict or misrepresent any provision of the underlying policy of insurance shall constitute an unfair and deceptive practice in the insurance business as provided by  56-8-103 and 56-8-104.   
   It is unlawful for an insurer or carrier that provides accident or health insurance, a nonprofit hospital or medical service corporation, a health, hospital or medical service corporation, a health maintenance organization, including any that participates in TennCare or any successor program, a Multiple Employer Welfare Arrangement (MEWA), a preferred provider organization, a pharmacy benefit management organization, or other network providing health benefits, to market or sell information that directly identifies the patient who is the subject of the information and that relates to the physical or mental health of that patient or to the provision of health care to that patient, unless the patient has authorized the release in written, electronic or other form that indicates the patient's consent.    This section does not apply to:   The release of such information to an agent, contractor or corporate affiliate of the entity holding the information to perform a permitted function or use of the information; or   The release of information for which the patient, enrollee or insured has executed a voluntary waiver or release.     This section does not apply to release of information that does not readily identify the patient for bona fide research or audit purposes. Nothing in this section shall prohibit:   The transfer of information as part of arrangements to assure the delivery of health care, health care payment, health care management, disease state management, health care oversight;   The transfer of responsibility for identifiable health information to a successor in interest; or   The release of medical information, medical services utilization data and any other necessary patient identifying information by an insurer or carrier that provides accident or health insurance, a nonprofit hospital or medical service corporation, a health, hospital or medical service corporation, a health maintenance organization, including any that participates in TennCare or any successor program, a MEWA, or a pharmacy benefit management organization to the TennCare Bureau or its contractors or other appropriate state agencies, appropriate providers of medical services, outreach workers, researchers, outside vendors or contractors, universities or any other appropriate third parties for the purpose of performing case management, drug utilization review (DUR), disease management, quality reviews, health management, or outcomes research that is designed to monitor utilization patterns, improve the quality of health care and health care delivery, assure compliance, control fraud, waste and abuse or contain costs. Any third party vendor or contractor, as well as any other entity that gains access to this information to perform the analysis and intervention activities described in this subdivision (a)(2)(B)(iii), will be bound to comply with all applicable state and federal laws and regulations regarding vigilant protection of the confidential information.       A violation of this subsection (a) shall be punished as a Class C misdemeanor.     In lieu of, or in addition to, any other remedy that may be available under this title, the commissioner may assess a civil penalty against any entity violating this section in an amount not to exceed one thousand dollars ($1,000) for each separate violation, or the amount realized by the entity, whichever is greater. The civil penalty shall only be levied by the department after a hearing, conducted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. In any civil action brought to enforce this subsection (b), costs for the prevailing party, including the department, shall include reasonable expenses, including attorney fees.   The commissioner is authorized to promulgate rules and regulations pursuant to the Uniform Administrative Procedures Act to enforce this section.   Nothing in this section shall be construed to prohibit an insurer, a hospital and medical service corporation, a health maintenance organization or an employer from sharing or using consumer information with its affiliates, subsidiaries, agents or joint venture partners, for activities consistent with this title, including, but not limited to, data processing, utilization review, underwriting claims and anti-fraud purposes. An insurer shall be permitted to share personal information such as name, address and other nonmedical specific data with subsidiaries, agents, or joint venture partners.   
  At any time a policyholder files a property claim under a personal lines fire or homeowners insurance policy for structural damage with an estimated value at or above twenty thousand dollars ($20,000), the insurer shall provide the policyholder with a written statement setting forth certain basic rights to which the policyholder is entitled under the policyholder's policy.   At a minimum, the written statement required by subsection (a) shall advise policyholders of their rights to:  Receive quality repair work to restore the damages to the policyholders' property;   Have the repairs made by a contractor of the policyholders' choice, understanding that the contractor is hired by the policyholder and that this contractor does not work for or at the direction of the insurance company;   Receive a copy of the insurance policy free of charge upon request;   Be informed of the need to file a proof of loss, if required;   Receive the name, phone number, and address of the claim representative handling the loss;   Receive a detailed estimate of the scope of damage and costs of repairs. Should the contractor selected by the policyholder have questions concerning the insurance company's estimate, the policyholder or the policyholder's contractor should contact the policyholder's claim representative directly;   File supplemental claims as the need arises; and   File a complaint with the department by calling the policyholder service section at 1-800-342-4029, if the policyholder is unable to work out an agreement after speaking with the policyholder's claim representative, agent, and the company.     The written statement required by this section shall also inform the policyholder that the requirements of this section do not amend or replace any part of the policyholder's insurance policy and that the policyholder should carefully read and examine the policyholder's insurance policy, including all policy coverages, conditions, exclusions and rights.   Any insurer that fails to comply with this section shall be subject to the unfair claims settlement practice provisions under  56-8-104(8) [repealed].   
  A pharmacy benefits manager shall notify a pharmacist who furnishes goods or services under any policy or contract for health insurance coverage provided under the TennCare program of the failure of any health insurer to provide timely payments for nondisputed claims pursuant to contract within fourteen (14) days of the failure of the health insurer to fund a scheduled payment.   Failure by a pharmacy benefits manager to provide notice as described in subsection (a) shall be cause for the commissioner to impose the appropriate penalties allowed in this title.   As used in this section, pharmacy benefits manager means a person, business or other entity and any wholly or partially owned subsidiary of the entity, that administers the prescription drug or device portion of plans providing health insurance coverage on behalf of a third party, including plan sponsors, insurance companies, unions, and health maintenance organizations.   
  It is the intent of the general assembly that the availability and affordability of basic major medical insurance coverage for a catastrophic illness requiring inpatient hospital care is essential for many Tennesseans who are uninsured.   To that extent, insurance providers in this state are encouraged to develop a plan that provides only major medical insurance coverage for a catastrophic illness requiring inpatient hospital care.   The plans developed under this section are not required to provide the mandated coverage or the mandated offers of coverage required pursuant to part 23, 24, 25, or 26 of this chapter, except to the extent that a specific mandated coverage is essential to the provision of basic health care for the catastrophic illness requiring inpatient hospital care.   Prior to being offered for sale in this state, the plan shall be submitted to the commissioner for approval, modification or disapproval. Upon receipt of approval for the plan by the commissioner, the carrier may use the certified plan until the plan is disapproved by the commissioner.   The commissioner is authorized to promulgate necessary rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to implement this section.   
 Any company holding a certificate of authority pursuant to  56-2-105 to provide property insurance as defined in  56-2-201, may subrogate a claim for damage caused by a blasting operation as defined in  68-105-102, to the person as defined in  68-105-102 causing the blast.  
  As used in this section, unless the context otherwise requires:  ANSI means the American National Standards Institute;   Building stabilization or foundation repairs means techniques performed at, to, or attached to the existing foundation of a building with the intention to repair, re-level, or stabilize the building or foundation of a covered structure;   Covered structure means any structure, including the personal property contained in the structure, to the extent covered under the terms of the policy;   Engineer means a person meeting the qualifications under title 62, chapter 2, part 4 who has at least a bachelor's degree in engineering, and relevant experience and expertise in the identification of sinkhole activity, as well as other potential subterranean causes of structural damage;   Homeowner property insurance means an insurance policy that includes coverage for a residential dwelling;   Land stabilization means any repair technique intended to replace, rebuild, stabilize, or restore the land including any repair technique designed to compensate for or prevent land instability;   Primary structural member means a structural element designed to support and stabilize the vertical or lateral loads of the overall structure;   Primary structural system means an assemblage of primary structural members;   Professional geologist means a person meeting the qualifications of title 62, chapter 36, who has at least a bachelor's degree in geology or a related earth science with expertise in the geology of this state, as well as having relevant geological experience and expertise identifying sinkhole activity, as well as other potential geologic causes of structural damage;   Sinkhole means a subterranean void created by the dissolution of limestone or dolostone strata resulting from groundwater erosion causing a surface subsidence of soil, sediment, or rock;   Sinkhole activity means settlement or systematic weakening of the earth supporting a covered structure, only if the settlement or systematic weakening results from contemporaneous movement or raveling of soils, sediments, or rock materials into subterranean voids created by the effect of groundwater erosion on a limestone or similar rock formation;   Sinkhole loss:  Means structural damage to a covered structure caused by the sudden collapse of the earth supporting the covered structure as the result of sinkhole activity; and   Does not include:   Land stabilization or costs associated with land stabilization; or   In the absence of structural damages to the covered structure, cracking, shrinking, expansion, deterioration, or similar damages; and        Structural damage means foundation displacement or deflection caused by a sinkhole after completion of initial construction of the covered structure, resulting in:   Interior floor displacement or deflection:  In excess of variances acceptable under building standards for residential construction approved by ANSI; and   To the extent that the interior building structure or members are unfit for service or represent a safety hazard;     Damage to primary structural members or primary structural systems that:  Results in such members or systems failing to meet the strength and performance requirements set forth in building standards for residential construction approved by ANSI; and   Renders such structural members or structural systems unfit for service or a safety hazard; or     Occupancy of the covered structure has been prohibited by a governmental agency because of unsafe conditions.     The reference in this subdivision (13) to building standards approved by ANSI shall not require the original construction of a covered structure to be in compliance with such standards, but is solely for the purpose of defining the extent of damage required in order to be considered structural damage.       Every insurer offering homeowner property insurance in this state shall make coverage available for insurable sinkhole losses, including contents of personal property contained in the dwelling. The insurer may require an inspection of the property before issuance of sinkhole loss coverage. Nothing in this section mandates that sinkhole loss coverage be included in any homeowner property insurance policy, but only that insurers offering homeowner property insurance make such coverage available for optional purchase on request by policyholders.   Every insurer offering homeowner property insurance in this state shall make a proper filing with the department to comply with this section. The insurer may make sinkhole loss coverage available in the homeowner policy itself, by endorsement, or through other coverage that the insurer may arrange, and the insurer may make an additional charge for the coverage.   Upon receipt of a claim for a sinkhole loss under a policy providing sinkhole loss coverage, an insurer must meet the following standards in investigating the claim:  The insurer shall make an inspection of the insured's premises to determine if there has been structural damage to the covered structure resulting from possible sinkhole activity;   If, upon the investigation pursuant to subdivision (d)(1), the insurer determines that there is no sinkhole loss, the insurer may deny the claim;   If, the insurer concludes that structural damage to a covered structure is inconsistent with sinkhole activity, then prior to denying the claim, the insurer shall obtain a written certification from an engineer, a professional geologist, or other qualified individual stating that:  An analysis was conducted of sufficient scope to provide an opinion within a reasonable professional probability on the cause of the observed structural damage; and   Sinkhole activity did not cause the observed structural damage; and     If the insurer obtains, pursuant to subdivision (d)(3), written certification that the cause of the structural damage was not sinkhole activity, and if the policyholder has submitted the sinkhole claim without good faith grounds for submitting the claim, the policyholder shall reimburse the insurer for fifty percent (50%) of the cost of the analysis under subdivision (d)(3); provided, however, that a policyholder is not required to reimburse an insurer more than two thousand five hundred dollars ($2,500) with respect to any claim. A policyholder is required to pay reimbursement under this subdivision (d)(4), only if the insurer, prior to ordering the analysis pursuant to subdivision (d)(3), informs the policyholder of the policyholder's potential liability for reimbursement and gives the policyholder the opportunity to withdraw the claim.      If a covered sinkhole loss is verified by the insurer, the conduct of the insurer and policyholder is governed by this subsection (e), subject to the terms and conditions of the policy or endorsement.   The insurer may limit its total claims payment for damages to the covered structure to the actual cash value of the sinkhole loss to the covered structure, excluding costs associated with building stabilization or foundation repair, until the policyholder enters into a contract for the performance of building stabilization or foundation repairs in accordance with the recommendations of the engineer retained or approved by the insurer.   To be eligible to receive payment for building stabilization or foundation repairs, or any other loss to the covered structure in excess of the actual cash value of the sinkhole loss to the covered structure, the insured must repair such damage or loss in accordance with a plan of repair approved by the insurer.   In order to prevent additional damage to the building or structure, the policyholder must enter into a contract for the performance of building stabilization and foundation repairs within ninety (90) days after the insurance company confirms coverage for the sinkhole loss and notifies the policyholder of such confirmation.   After the policyholder enters into the contract for the performance of building stabilization and foundation repairs as set forth in this subsection (e) and subject to the terms and conditions of the policy, the insurer shall pay the amounts necessary to begin and perform such repairs as the work is performed and expenses are incurred. The insurer may not require the policyholder to advance payment for covered repairs.   Without the prior written consent of the insurer, the policyholder may not accept anything of value from any person proposing to perform the repairs specified in this section as an inducement to contract with such person for the repairs.   The stabilization and all other repairs to the structure and contents must be completed within twelve (12) months after entering into the contract for repairs described in subdivision (e)(3) unless:  There is a mutual agreement between the insurer and the policyholder;   The claim is in litigation;   The claim is under appraisal or mediation; or   Repairs are undertaken but cannot be completed within twelve (12) months because of reasons beyond the control of the policyholder.     If the covered structure cannot be repaired or if the cost of repair exceeds policy limits, the terms and conditions of the policy or endorsement relative to losses in excess of policy limits shall apply.     This subsection (f) shall not be construed as limiting an insurer's right to cancel, decline to renew, or decline to issue homeowner property insurance; provided, however, that an insurer may cancel, decline to renew, or decline to issue any homeowner property insurance on a structure that has been the subject of a sinkhole loss claim if the structure:  Has not been repaired in accordance with the plan of repair approved by the insurer and within the time constraints set forth in subdivision (e)(7); or   Is subject to the risk of future sinkhole damage because of unstable land.     Nothing in this section:  Requires an insurer to pay more than one (1) policy limit for one (1) policy loss due to a covered sinkhole loss;   Prohibits an insurer from inspecting property or engaging in other underwriting practices in connection with making available coverage for sinkhole losses;   Prohibits an insurer from offering coverage that is broader or more extensive than the offer of coverage required by this section;   Prohibits an insurer from including in a policy or endorsement terms and conditions that are not contrary to this section; or   Limits or creates any rights or obligations except as explicitly stated in this section.     The commissioner may promulgate rules and regulations for the purpose of implementing this section.   
  In any action in which a person has made any payments to or on behalf of any claimant prior to trial, the payments shall not be construed as an admission of liability by the person in any action brought to recover for personal injuries or for damage to property.   In the event, however, that the action results in a verdict in favor of the claimant, the defendant shall be allowed to introduce evidence of the payments and the court shall then reduce the amount awarded to the plaintiff by the amount of payments made prior to the date of judgment.   No such payments made by any insurance company shall be construed to be in lieu of or in addition to any limits of liability of the insurance company under any policy of insurance, but the sums paid in advance shall be deemed to have been made pursuant to the limits of the policy and shall be credited to the insurer's obligation to the insured arising from the policy and shall be deducted from the insurer's obligation.   The making of any advance payments shall not interrupt the running of the statute of limitations on any claim.   
  As used in this section only, the following terms have the meaning as indicated:  Original health insurer means a health insurance entity as defined in  56-7-109 that has verified eligibility for the date of service, or has communicated to a health care provider prior authorization or precertification for a service to be provided, to a person believed by the original health insurer to be covered under the group health care policy as of the date that eligibility was verified or prior authorization or precertification is issued, but that no longer covers the insured individual at the time the service is performed;   Successor coverage health claim means a claim for benefits or reimbursement under a group health care policy when the health care services performed were based upon verification of eligibility or were authorized by an original health insurer, but the original health insurer coverage has been replaced by a successor health insurer on or before the date that the services are provided to the covered person; and   Successor health insurer means a health insurance entity as defined by  56-7-109 that provided group health coverage for the person at the time the original health insurer verified eligibility or approved prior authorization or precertification for the person or at the time the service was actually performed.     In the case of a successor coverage health claim, and notwithstanding the provisions of a successor health insurer group health care policy, a successor health insurer shall not:  Deny a claim because of failure to submit the claim timely; provided, that the claim was submitted within one hundred eighty (180) days of the date the claim was denied by the original health insurer; or   Deny the claim because of the covered person's failure to obtain prior authorization or precertification, if the successor insurer would have granted prior authorization or precertification for the service had it been asked to do so prior to the health care service being rendered to the covered person.     Except as may result from the application of subsection (b), nothing in this section shall require a successor health insurer to pay any claim or make reimbursement for any services not covered under the terms of its group health care policy.   This section shall not apply to TennCare or any successor program provided for in title 71, chapter 5, or CoverKids or any successor program provided for in title 71, chapter 3, part 11.   Nothing in this section shall create any obligation by an original health insurer to a successor health insurer to provide proof of eligibility inquiry by a health care provider.   
 A policy of group accident and health insurance as defined in  56-26-201 that is issued to an employer shall contain a provision requiring the employer to notify the insurer when any person covered under the group policy ceases to be eligible for coverage. The employer shall notify the health insurer of a covered person's loss of eligibility within the time set forth in the contract, but in no event shall the notification occur more than sixty (60) days after the employer learns of a covered person's loss of eligibility.  
  In connection with a claim for death benefits payable under a life insurance policy or an annuity contract, the following persons are authorized to execute a medical records release authorization that may be required by the insurance company that issued the life insurance policy or annuity contract:  The personal representative of the decedent's estate, if any;   A beneficiary of the death benefits named in the policy or contract; or   A person who has filed an affidavit pursuant to  30-4-103 in connection with the decedent's estate.     Unless prohibited by federal law, a health care provider licensed under title 33, title 63 or title 68 shall honor a medical records release authorization executed in accordance with this section.   Nothing in this section shall be construed as affecting the ability of a health care provider to charge for copies of medical records in accordance with any applicable law.   
  The signature of an applicant for or party to an insurance contract on an application, amendment, or other document stating the type, amount, or terms and conditions of coverage, shall create a rebuttable presumption that the statements provided by the person bind all insureds under the contract and that the person signing such document has read, understands, and accepts the contents of such document.   The payment of premium for an insurance contract, or amendment thereto, by an insured shall create a rebuttable presumption that the coverage provided has been accepted by all insureds under the contract.   
   A health insurance entity, as defined in  56-7-109, regardless of status as a participating organization of the Council on Affordable Quality Healthcare (CAQH) or its successor, shall notify the health care provider of the results of the provider's clean CAQH credentialing application and shall notify the health care provider as to whether or not the health insurance entity is willing to contract with that provider within ninety (90) calendar days after receipt of the completed application.   A clean CAQH application means an application that has no defect, misstatement of facts, improprieties, including a lack of any required substantiating documentation, or particular circumstance requiring special treatment that impedes prompt credentialing.     Unless otherwise required by a national accrediting body, a health insurance entity shall accept and begin processing a completed credentialing application, whether a CAQH or the health insurance entity's application, as early as ninety (90) calendar days before the anticipated employment start date of the health care provider.   Unless otherwise required by a national health insurance entity accrediting body, a health insurance entity shall not mandate, in order to process a credentialing application, whether a CAQH or the health insurance entity's application, that a health care provider have an active health care liability insurance policy and bear the unnecessary costs of the premiums before the provider's employment start date.   No health insurance entity shall reflect, in either written material sent to its members or on a web site available to its members, that a health care provider is an in-network provider or that the provider's credentialing application is pending approval until such time as a contract is signed by both the provider and the health insurance entity and the provider is eligible to be reimbursed as an in-network provider.    Nothing in this section requires a health insurance entity to contract with a provider if the health insurance entity and the provider do not agree on the terms and conditions of the provider contract.   Nothing in this section creates a private cause of action against a health insurance entity.      A health insurance entity shall provide to any medical group practice with which the entity has an existing contract a list of all information and supporting documentation required for a credentialing application of a new provider applicant to be considered complete pursuant to this subsection (f).    A health insurance entity shall notify a new provider applicant in writing of the status of a credentialing application no later than five (5) business days of receipt of the application. The notice shall indicate if the application is complete or incomplete, and, if the application is incomplete, the notice shall indicate the information or documentation that is needed to complete the application.   If the application is incomplete and the new provider applicant submits additional information or documentation to complete the application, the health insurance entity shall comply with the requirements of subdivision (f)(2)(A) upon receipt of the additional information or documentation.   A health insurance entity shall notify a new provider applicant of the results of the new provider applicant's credentialing application within ninety (90) calendar days after notification from the health insurance entity that the application is complete.   If a new provider applicant fails to submit a complete credentialing application to a health insurance entity within thirty (30) calendar days of notice of an incomplete application, then the application is deemed incomplete and credentialing is discontinued. If a new provider applicant fails to submit a complete network participation enrollment form, including signature evidencing intent to participate with the group and any other required documentation, to a health insurance entity within thirty (30) calendar days of notice of an incomplete application, then the new provider applicant is ineligible to receive the payment set out in (f)(3)(A).      A new provider applicant shall not submit any claims for covered services provided by the new provider applicant to the health insurance entity for reimbursement while the credentialing application is pending. If claims are submitted while the credentialing application is pending, the health insurance entity may deny the claims. Upon notification pursuant to subdivision (f)(2)(C), the new provider applicant shall submit all held claims to the health insurance entity, and the health insurance entity shall pay reimbursement at the contracted in-network rate for any covered medical services provided by the new provider applicant during the time between receipt of a complete credentialing application pursuant to subdivision (f)(2)(A) and notification pursuant to subdivision (f)(2)(C). In the event that a new provider applicant or medical group practice has specified a network start date for the new provider applicant that is later than the time of receipt of a complete credentialing application pursuant to subdivision (f)(2)(A), the health insurance entity shall pay reimbursement at the contracted in-network rate for any covered medical services provided by the new provider applicant during the time between the specified network start date and notification pursuant to subdivision (f)(2)(C).   A health insurance entity's reimbursement obligation under subdivision (f)(3)(A) applies only to medical services provided in the name of the medical group practice by a new provider applicant that is billing for professional services under the existing group contract.      Nothing in this section requires a health insurance entity to pay reimbursement at the contracted in-network rate for any covered medical services provided by the new provider applicant if the new provider applicant's credentialing application is not approved or the health insurance entity is otherwise not willing to contract with the new provider applicant.   A medical group practice may be required to refund any reimbursement monies paid by the health insurance entity for services provided by a new provider applicant whose credentialing approval was obtained by fraud.   A medical group practice shall not collect from a health insurance beneficiary any amount for services provided if the new provider applicant's credentialing application is not approved or any amount refunded to a health insurance entity under subdivision (f)(4)(B).     As used in this subsection (f):  Existing group contract means a participating provider agreement between a medical group practice and a health insurance entity, under which physicians and other providers of the medical group bill for services provided to patients covered by health insurance provided by the health insurance entity, and under which a new provider applicant who is a member of the medical group practice will become a participating provider upon successful completion of the credentialing process;   Health insurance entity has the same meaning provided in  56-7-109(a); and   New provider applicant means a physician or other licensed provider of medical services who has submitted a completed credentialing application to a health insurance entity.     Nothing in this subsection (f) shall apply to the TennCare program or any successor Medicaid program provided for in title 71, chapter 5; the CoverKids Act of 2006, compiled in title 71, chapter 3, part 11; the Access Tennessee Act of 2006, compiled in title 56, chapter 7, part 29; any other plan managed by the health care finance and administration division of the department of finance and administration or any successor division or department; or the group insurance plans offered under title 8, chapter 27.     
  As used in this section:  Health insurance entity has the same meaning as defined in  56-7-109 and includes managed care organizations participating in the medical assistance program under title 71, chapter 5;   Healthcare services has the same meaning as defined in  56-61-102;   Healthcare services provider means an individual acting within the scope of a valid license issued pursuant to title 63 or any state-contracted crisis service provider employed by a facility licensed under title 33;   Originating site means the location where a patient is located pursuant to subdivision (a)(7)(A) and that originates a telehealth service to another qualified site;   Qualified site means the office of a healthcare services provider, a hospital licensed under title 68, a facility recognized as a rural health clinic under federal Medicare regulations, a federally qualified health center, any facility licensed under title 33, or any other location deemed acceptable by the health insurance entity;   Store-and-forward telemedicine services:  Means the use of asynchronous computer-based communications between a patient and healthcare services provider at a distant site for the purpose of diagnostic and therapeutic assistance in the care of patients; and   Includes the transferring of medical data from one (1) site to another through the use of a camera or similar device that records or stores an image that is sent or forwarded via telecommunication to another site for consultation;     Telehealth:  Means the use of real-time, interactive audio, video telecommunications or electronic technology, or store-and-forward telemedicine services by a healthcare services provider to deliver healthcare services to a patient within the scope of practice of the healthcare services provider when:   Such provider is at a qualified site other than the site where the patient is located; and   The patient is at a qualified site, at a school clinic staffed by a healthcare services provider and equipped to engage in the telecommunications described in this section, or at a public elementary or secondary school staffed by a healthcare services provider and equipped to engage in the telecommunications described in this section; and     Does not include:   An audio-only conversation;   An electronic mail message; or   A facsimile transmission; and       Telehealth provider means a healthcare services provider engaged in the delivery of healthcare services through telehealth.     Healthcare services provided through a telehealth encounter shall comply with state licensure requirements promulgated by the appropriate licensure boards. Telehealth providers shall be held to the same standard of care as healthcare services providers providing the same healthcare service through in-person encounters.   A telehealth provider who seeks to contract with or who has contracted with a health insurance entity to participate in the health insurance entity's network shall be subject to the same requirements and contractual terms as a healthcare services provider in the health insurance entity's network.   Subject to subsection (c), a health insurance entity:  Shall provide coverage under a health insurance policy or contract for covered healthcare services delivered through telehealth;   Shall reimburse a healthcare services provider for the diagnosis, consultation, and treatment of an insured patient for a healthcare service covered under a health insurance policy or contract that is provided through telehealth without any distinction or consideration of the geographic location or any federal, state, or local designation, or classification of the geographic area where the patient is located;   Shall not exclude from coverage a healthcare service solely because it is provided through telehealth and is not provided through an in-person encounter between a healthcare services provider and a patient; and   Shall reimburse healthcare services providers who are out-of-network for telehealth care services under the same reimbursement policies applicable to other out-of-network healthcare services providers.     A health insurance entity shall provide coverage for healthcare services provided during a telehealth encounter in a manner that is consistent with what the health insurance policy or contract provides for in-person encounters for the same service, and shall reimburse for healthcare services provided during a telehealth encounter without distinction or consideration of the geographic location, or any federal, state, or local designation or classification of the geographic area where the patient is located.   [Deleted by 2020 (2nd Ex. Sess.) amendment.]   Any provisions not stipulated by this section shall be governed by the terms and conditions of the health insurance contract.   Telehealth is subject to utilization review under the Health Care Service Utilization Review Act, compiled in chapter 6, part 7 of this title.    This section does not apply to accident-only, specified disease, hospital indemnity, plans described in  1251 of the Patient Protection and Affordable Care Act, Public Law 111-148, as amended and  2301 of the Health Care and Education Reconciliation Act of 2010, Public Law 111-152, as amended (both in 42 U.S.C.  18011), plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1001 et seq.), medicare supplement, disability income, long-term care, or other limited benefit hospital insurance policies.   This section does apply to the basic health plans authorized under title 8, chapter 27, parts 1, 2, 3, and 7.     A health insurance entity shall reimburse an originating site hosting a patient as part of a telehealth encounter an originating site fee in accordance with the federal centers for medicare and medicaid services telehealth services rule 42 C.F.R.  410.78 and at an amount established prior to August 20, 2020, by the federal centers for medicare and medicaid services.    This section does not require a health insurance entity to provide coverage for healthcare services that are not medically necessary, unless the terms and conditions of an applicable health insurance policy provide that coverage.   As used in subdivision (k)(1):  For a healthcare service for which coverage or reimbursement is provided under the Medical Assistance Act of 1968, compiled in title 71, chapter 5, part 1, or provided under title 71, chapter 3, part 11, medically necessary means a healthcare service that is determined by the bureau of TennCare to satisfy the medical necessity standard set forth in 71-5-144; and   For all other healthcare services, medically necessary means healthcare services that a healthcare services provider, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing, or treating an illness, injury, or disease or the symptoms of an illness, injury, or disease, and that are:   In accordance with generally accepted standards of medical practice;   Clinically appropriate, in terms of type, frequency, extent, site and duration; and considered effective for the patient's illness, injury or disease; and   Not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury, or disease excluding any costs paid pursuant to subsection (j).       This section does not require a health insurance entity to provide coverage for healthcare services delivered by means of telehealth if the applicable health insurance policy would not provide coverage for the same healthcare services if delivered by in-person means.   This section does not require a health insurance entity to reimburse a healthcare services provider for healthcare services delivered by means of telehealth if the applicable health insurance policy would not reimburse that healthcare services provider if the same healthcare services had been delivered by in-person means.     
  As used in this section:  Health insurance entity has the same meaning as defined in  56-7-109 and includes managed care organizations participating in the medical assistance program under title 71, chapter 5;   Healthcare services has the same meaning as defined in  56-61-102;   Healthcare services provider means an individual acting within the scope of a valid license issued pursuant to title 63 or title 68, chapter 24, part 6, or any state-contracted crisis service provider employed by a facility licensed under title 33;   Healthcare system means two (2) or more healthcare organizations as defined in  63-1-150, that are affiliated through shared ownership or pursuant to a contractual relationship that controls payment terms and service delivery;   Practice group means two (2) or more healthcare services providers that share a common employer for the purposes of the healthcare services providers' clinical practice;   Provider-based telemedicine:  Means the use of Health Insurance Portability and Accessibility Act (HIPAA) (42 U.S.C.  1320d et seq.) compliant real-time, interactive audio, video telecommunications, or electronic technology, or store-and-forward telemedicine services, used over the course of an interactive visit by a healthcare services provider to deliver healthcare services to a patient within the scope of practice of the healthcare services provider when:   The healthcare services provider is at a qualified site other than the site where the patient is located and has access to the relevant medical record for that patient;   The patient is located at a location the patient deems appropriate to receive the healthcare service that is equipped to engage in the telecommunication described in this section; and   The healthcare services provider makes use of HIPAA compliant real-time, interactive audio, video telecommunications or electronic technology, or store-and-forward telemedicine services to deliver healthcare services to a patient within the scope of practice of the healthcare services provider as long as the healthcare services provider, the healthcare services provider's practice group, or the healthcare system has established a provider-patient relationship by submitting to a health insurance entity evidence of an in-person encounter between the healthcare service provider, the healthcare services provider's practice group, or the healthcare system and the patient within sixteen (16) months prior to the interactive visit; and     Does not include:   An audio-only conversation;   An electronic mail message or phone text message;   A facsimile transmission;   Remote patient monitoring; or   Healthcare services provided pursuant to a contractual relationship between a health insurance entity and an entity that facilitates the delivery of provider-based telemedicine as the substantial portion of the entity's business;       Qualified site means the primary or satellite office of a healthcare services provider, a hospital licensed under title 68, a facility recognized as a rural health clinic under federal medicare regulations, a federally qualified health center, a facility licensed under title 33, or any other location deemed acceptable by the health insurance entity; and   Store-and-forward telemedicine services:  Means the use of asynchronous computer-based communications between a patient and healthcare services provider at a distant site for the purpose of diagnostic and therapeutic assistance in the care of patients; and   Includes the transferring of medical data from one (1) site to another through the use of a camera or similar device that records or stores an image that is sent or forwarded via telecommunication to another site for consultation.       Healthcare services provided through a provider-based telemedicine encounter must comply with state licensure requirements promulgated by the appropriate licensure boards. Provider-based telemedicine providers are held to the same standard of care as healthcare services providers providing the same healthcare services through in-person encounters.   A provider-based telemedicine provider who seeks to contract with or who has contracted with a health insurance entity to participate in the health insurance entity's network is subject to the same requirements and contractual terms as any other healthcare services provider in the health insurance entity's network.   A health insurance entity:  Shall provide coverage under a health insurance policy or contract for covered healthcare services delivered through provider-based telemedicine;   Shall reimburse a healthcare services provider for a healthcare service covered under an insured patient's health insurance policy or contract that is provided through provider-based telemedicine without any distinction or consideration of the geographic location or any federal, state, or local designation, or classification of the geographic area where the patient is located;   Shall not exclude from coverage a healthcare service solely because it is provided through provider-based telemedicine and is not provided through an in-person encounter between a healthcare services provider and a patient; and   Shall reimburse healthcare services providers who are out-of-network for provider-based telemedicine care services under the same reimbursement policies applicable to other out-of-network healthcare services providers.     A health insurance entity shall provide coverage for healthcare services provided during a provider-based telemedicine encounter in a manner that is consistent with what the health insurance policy or contract provides for in-person encounters for the same service, and shall reimburse for healthcare services provided during a provider-based telemedicine encounter without distinction or consideration of the geographic location, or any federal, state, or local designation or classification of the geographic area where the patient is located.   This section does not require a health insurance entity to pay total reimbursement for a provider-based telemedicine encounter in an amount that exceeds the amount that would be paid for the same service provided by a healthcare services provider for an in-person encounter.    This section does not require a health insurance entity to provide coverage for healthcare services that are not medically necessary, unless the terms and conditions of an applicable health insurance policy provide that coverage.   As used in subdivision (g)(1):  For a healthcare service for which coverage or reimbursement is provided under the Medical Assistance Act of 1968, compiled in title 71, chapter 5, part 1, or provided under title 71, chapter 3, part 11, medically necessary means a healthcare service that is determined by the bureau of TennCare to satisfy the medical necessity standard set forth in 71-5-144; and   For all other healthcare services, medically necessary means healthcare services that a healthcare services provider, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing, or treating an illness, injury, or disease or the symptoms of an illness, injury, or disease, and that are:   In accordance with generally accepted standards of medical practice;   Clinically appropriate, in terms of type, frequency, extent, site and duration; and considered effective for the patient's illness, injury or disease; and   Not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury, or disease.       This section does not require a health insurance entity to provide coverage for healthcare services delivered by means of provider-based telemedicine if the applicable health insurance policy would not provide coverage for the same healthcare services if delivered by in-person means.   This section does not require a health insurance entity to reimburse a healthcare services provider for healthcare services delivered by means of provider-based telemedicine if the applicable health insurance policy would not reimburse that healthcare services provider if the same healthcare services had been delivered by in-person means.     Any provisions not required by this section are governed by the terms and conditions of the health insurance policy or contract.   Provider-based telemedicine is subject to utilization review under the Health Care Service Utilization Review Act, compiled in chapter 6, part 7 of this title.    This section does not apply to accident-only, specified disease, hospital indemnity, plans described in  1251 of the Patient Protection and Affordable Care Act, Public Law 111-148, as amended and  2301 of the Health Care and Education Reconciliation Act of 2010, Public Law 111-152, as amended (both in 42 U.S.C.  18011), plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1001 et seq.), medicare supplement, disability income, long-term care, or other limited benefit hospital insurance policies.   This section does apply to the basic health plans authorized under title 8, chapter 27, parts 1, 2, 3, and 7.     
  A managed health insurance issuer, as defined by  56-32-128(a), that has contracted with a physician's practice to be a part of that health insurance plan's network of providers shall not directly contact or employ an agent to directly contact a patient of the physician's practice in an effort to change a referral for services to another provider, unless the following occurs:  The ordering physician, the nurse practitioner under the physician's supervision, the physician assistant under the physician's supervision, or a representative of one (1) of the providers is given the opportunity to indicate a particular preference as to the provider of a requested service. In the event a managed health insurance issuer or its agent contacts the patient to suggest alternative providers, the patient shall be notified that the ordering provider indicated a particular preference;   The ordering physician, the nurse practitioner under the physician's supervision, the physician assistant under the physician's supervision, or a representative of one (1) of the providers is notified if the patient elects a provider other than that requested by the ordering provider if the ordering provider indicated a particular preference; and   The patient is provided orally or electronically with a disclosure that the patient has a right to discuss the change of referral with the patient's ordering physician, the nurse practitioner under the physician's supervision, the physician assistant under the physician's supervision, or a representative of one (1) of the providers, before the appointment is changed.     Nothing in this section is intended to prohibit an insurer or the insurer's agent from contacting its enrollees in a health plan to inform the patient that a provider is not included in the patient's network and that there may be out-of-network costs incurred by using that provider.   The commissioner may assess a civil penalty for a violation of this section pursuant to  56-2-305.   This section shall not apply to:  TennCare or any successor program provided for in title 71, chapter 5;   CoverKids or any successor program provided for in the CoverKids Act of 2006, compiled in title 71, chapter 3, part 11;   Cover Tennessee or any successor program provided for in the Cover Tennessee Act of 2006, compiled in part 30 of this chapter [repealed];   Access Tennessee or any successor program provided for in the Access Tennessee Act of 2006, compiled in part 29 of this chapter; or   A program for home-based and community-based services to eligible individuals served through a health care financing administration (HCFA) approved waiver.     
 Notwithstanding any other law to the contrary, a state mandated health benefit, as defined in  3-2-111, that takes effect after March 24, 2016, shall apply not only to private health insurance issuers, as defined in  3-2-111, but also any state or local insurance program, under title 8, chapter 27, and any managed care organization contracting with the state to provide insurance through the TennCare program.  
  As used in this section:  Continuing medical education means board of medical examiners or board of osteopathic examination required continued postgraduate medical education intended to provide medical professionals with knowledge of new developments in the professional's field;   Maintenance of certification means any process requiring periodic recertification examinations or other activities to maintain specialty medical board certification;   Maintenance of licensure means the proprietary framework for physician license renewal established through the Federation of State Medical Boards or its successor organization, which includes additional periodic testing or requirements other than continuing medical education; and   Specialty medical board certification means certification by a board that specializes in one (1) particular area of medicine and typically requires additional examinations other than the requirements of the board of medical examiners or board of osteopathic examination to practice medicine.     A health insurance entity, as defined in  56-7-109, shall not deny reimbursement to or prevent a physician licensed pursuant to title 63, chapter 6 or 9 from participating in any of the insurance entity's provider networks based solely on a physician's decision not to participate in any form of maintenance of licensure or maintenance of certification, including basing a physician's network participation on any form of maintenance of licensure tied to maintenance of certification.   A health insurance entity, as defined in  56-7-109, shall not discriminate with respect to reimbursement levels based solely on a physician's decision not to participate in any form of maintenance of licensure or maintenance of certification, including basing a physician's reimbursement level on any form of maintenance of licensure tied to maintenance of certification.   
  Whenever the commissioner performs a market conduct examination of a health insurance carrier that issues a health benefit plan under the jurisdiction of the department of commerce and insurance for compliance with  56-7-2360, the examination shall include, but not be limited to, the following information:  A description of the process used to develop or select the medical necessity criteria for mental health or alcoholism or drug dependency benefits and the process used to develop or select the medical necessity criteria for medical and surgical benefits;   Identification of all non-quantitative treatment limitations (NQTLs) that are applied to both mental health or alcoholism or drug dependency benefits and medical and surgical benefits; and   The results of any analysis that may have been performed by a health insurance carrier that demonstrates that for the medical necessity criteria described in subdivision (a)(1) and for each NQTL identified in subdivision (a)(2), as written and in operation, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL to mental health or alcoholism or drug dependency benefits are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used to apply the medical necessity criteria and each NQTL, as written and in operation, to medical and surgical benefits. The results of the analysis may:  Identify the factors used to determine that an NQTL will apply to a benefit, including factors that were considered but rejected;   Identify and define the specific evidentiary standards used to define the factors and any other evidentiary standards relied upon in designing each NQTL;   Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that the processes and strategies used to design each NQTL as written for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes and strategies used to design each NQTL as written for medical and surgical benefits;   Identify and describe the methods and analyses used, including the results of any relevant analyses, to determine that processes and strategies used to apply each NQTL in operation for mental health or alcoholism or drug dependency benefits are comparable to, and no more stringent than, the processes or strategies used to apply each NQTL in operation for medical and surgical benefits;   Disclose the specific findings and conclusions reached by the health insurance carrier that the results of any relevant analyses under this subsection indicate that the health insurance carrier is in compliance with this section and the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (Pub.L. No. 110-343), and its implementing regulations, including 45 CFR 146.136 and any other applicable regulations; and   Identify any other information necessary to clarify data provided in accordance with this section requested by the commissioner, including information that may be proprietary or have commercial value. Any information submitted that is proprietary shall not be made a public record under title 10, chapter 7.       The health insurance carrier's chief executive officer and chief medical officer shall sign a certification that affirms that the health insurance carrier has completed a comprehensive review of its administrative practices for the prior calendar year for compliance with the necessary provisions of this section and  56-7-2601 and 56-7-2602, and the MHPAEA.   Separate NQTLs that apply to mental health or alcohol or drug dependency benefits but do not apply to medical and surgical benefits within any classification of benefits are not permitted.   
  The commissioner has the discretion to prescribe by regulation, after due consultation with providers of health care or treatment, accident and sickness insurers, hospital, medical and dental service corporations and other prepayment organizations representative of those organizations, claim forms for reporting by health care providers. The prescribed forms shall include, but need not be limited to, information regarding the medical diagnosis, treatment and prognosis of the patient, together with the details of charges incident to the providing of the care, treatment or services, sufficient for the purpose of meeting the proof requirements of an accident and sickness insurance or hospital, medical or dental service contract.   The adoption of any uniform claim forms by the commissioner pursuant to this section shall not preclude an insurer, hospital, medical or dental service corporation or other prepayment organization from obtaining any necessary additional information regarding a claim from the claimant, provider of health care or treatment, or certifier of coverage.   Any regulation so adopted shall specify an effective date, which shall not be less than twelve (12) months after the date of adoption or promulgation, after which no accident and sickness insurer, hospital, medical or dental service corporation or other prepayment plan may require providers of health care or treatment to complete forms differing from those prescribed by the commissioner pursuant to this section.   
  A health insurance entity, as defined in  56-7-109, that credentials or recredentials the providers in its networks shall accept, in addition to its own credentialing and recredentialing applications, the credentialing and recredentialing applications from the Council on Affordable Quality Healthcare (CAQH). If the health insurance entity is a participating organization of CAQH, then the health insurance entity shall accept the application from either CAQH by electronic means or from the provider by electronic means or by a paper copy. If the health insurance entity is not a participating organization of CAQH, then the health insurance entity shall accept the application only from the provider by electronic means or by a paper copy. In either case, the provider shall complete and submit the attestation clause of the health insurance entity before an application is considered complete, if the health insurance entity requires it.   Nothing in this section may be construed to require a health insurance entity to be a participating organization or pay a fee to CAQH.  2005, ch. 167,  1.    Any person or entity that is unable to show that it is subject to the jurisdiction of another agency of this or another state or the federal government shall submit to an examination by the commissioner to determine the organization and solvency of the person or the entity, and to determine whether or not the person or entity is in compliance with the applicable provisions of this code.   Any person or entity unable to show that it is subject to the jurisdiction of another agency of this state or another state or the federal government shall be subject to all appropriate provisions of this code regarding the conduct of its business.   Any production agency or administrator, licensed by the department, that advertises, sells, transacts or administers coverage in this state, as described in subsection (a), which is provided by any person or entity described in subsection (c), shall, if that coverage is not fully insured or otherwise fully covered by an admitted life or health insurer, nonprofit hospital service plan corporation, or nonprofit medical service plan corporation, advise any purchaser, prospective purchaser, and covered person of the lack of insurance or other coverage. Any administrator that advertises or administers coverage in this state that is described in subsection (a), that is provided by any person or entity described in subsection (c), shall advise any production agency of the elements of the coverage including the amount of stop-loss insurance in effect.   
 Notwithstanding any other law, and except as provided in this title, any person or other entity that provides coverage in this state for medical, surgical, chiropractic, physical therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric expenses, whether the coverage is by direct payment, reimbursement, or otherwise, shall be presumed to be subject to the jurisdiction of the department unless the person or other entity shows that while providing the services it is subject to the jurisdiction of another agency of this or another state or the federal government.   A person or entity may show that it is subject to the jurisdiction of another agency of the state or federal government by providing to the commissioner the appropriate certificate, license or contract issued by the other governmental agency that permits or qualifies it to provide those services for which it is licensed or certified.  
  As used in this section, remote patient monitoring services means using digital technologies to collect medical and other forms of health data from a patient and then electronically transmitting that information securely to healthcare providers in a different location for interpretation and recommendation.   A health insurance entity may consider any remote patient monitoring service a covered medical service if the same service is covered by medicare. The appropriate parties may negotiate the rate for these services in the manner in which is deemed appropriate by the parties.   Reimbursement of expenses for covered remote patient monitoring services must be established through negotiations conducted by the health insurance entity with the healthcare services provider, healthcare system, or practice group in the same manner as the health insurance entity establishes reimbursement of expenses for covered healthcare services that are delivered by in-person means.   Remote patient monitoring services are subject to utilization review under the Health Care Service Utilization Review Act, compiled in chapter 6, part 7 of this title.   This section does not apply to a health incentive program operated by a health insurance entity that utilized an electronic device for physiological monitoring.   
   Fee schedule means a list of reimbursement amounts assigned to specific codes and used by a health insurance carrier pursuant to a contract between a health insurance carrier and a healthcare provider to calculate payments paid to the provider for therapies, procedures, materials, and other services delivered to enrollees.   As used in this section, health insurance carrier means any entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner of commerce and insurance, that contracts with healthcare providers in connection with a plan of health insurance, health benefits or health services;     Health insurance carriers shall provide or make available to a healthcare provider, when contracting or renewing an existing contract with the provider, the payment or fee schedules or other information sufficient to enable the healthcare provider to determine the manner and amount of payments under the contract for the healthcare provider's services prior to final execution or renewal of the contract. The payment or fee schedule or other information submitted to a healthcare provider pursuant to this section shall include a description of processes and factors that may be applicable and that may affect actual payment, e.g., copayments, coinsurance, deductibles, risk sharing arrangements and liability of third parties. A health insurance carrier, upon request of a healthcare provider, shall make available to the healthcare provider examples of actual payment for procedures frequently performed by the provider that involve combinations of services or payment codes, if the actual payment for the procedures can not be ascertained from the fee schedule or other information submitted to a healthcare provider pursuant to this section. The provisions of this subsection (b) requiring the submission of a fee schedule or other information upon renewal of an existing contract shall not be applicable to renewal of an existing contract when the payment or fee schedule previously provided to the healthcare provider has not changed.    Except as otherwise provided in subdivision (g)(2), a health insurance carrier shall provide notice of and identify any change to a provider's fee schedule and the effective date of the change at least ninety (90) days prior to the effective date of the change. The notice and identification required by this subdivision (c)(1) shall be sent to a dedicated email address or as otherwise stipulated in the contract between the provider and the health insurance carrier. The provider shall submit to the health insurance carrier a dedicated email address to receive the disclosures required by this part.   A health insurance carrier shall not require any hospital, by contract, reimbursement or otherwise, to notify the health insurance carrier of a hospital inpatient admission within less than one (1) business day of the hospital inpatient admission if the notification or admission occurs on a weekend or federal holiday. Nothing in this subsection (c) shall affect the applicability or administration of other provisions of a contract between a hospital and health insurance carrier, including, without limitation, preauthorization requirements for scheduled inpatient admissions.   This subsection (c) shall not apply to changes in standard codes and guidelines developed by the American Medical Association or a similar organization.     A healthcare provider receiving information pursuant to subsection (b) shall not share the information with an unrelated person without the prior written consent of the health insurance carrier. The remedies available to a health insurance carrier to enforce this subsection (d) shall include, but not be limited to, injunctive relief. A health insurance carrier seeking extraordinary relief to enforce this subsection (d) shall not be required to establish irreparable harm with regard to the sharing of competitively sensitive information.   This section shall not apply to nonprofit dental service corporations established under chapter 30 of this title.   A health insurance carrier shall:  Within ten (10) business days of receipt of a written request from a provider, deliver to the provider at the provider's dedicated email address that provider's fee schedule, free of charge, in either a partial or full version as requested by the provider, in a transferable industry standard spreadsheet, including Microsoft Excel or other comparable format; or   Provide access to the provider's fee schedule on a secure website, so that the provider may access the fee schedule at any time throughout the term of the provider's contract with the health insurance carrier. Nothing in this subdivision (f)(2) requires a health insurance carrier to provide a fee schedule through or on a website.      Except as otherwise provided in subdivision (g)(2), no health insurance carrier shall make a change or changes to a provider's fee schedule except as follows:  Up to one (1) time during a consecutive twelve-month period. After a health insurance carrier makes a change or changes to the provider's fee schedule, it is prohibited from doing so again for at least twelve (12) months following the effective date of the change or changes; or   If a health insurance carrier and a hospital agree to the change or changes in writing.     Subdivisions (c)(1) and (g)(1) do not apply to the following changes to a fee schedule:  Any change in a provider's fee schedule due to a change effected by the federal or state government to its healthcare fee schedule, if the provider and health insurance carrier have previously agreed that the provider's fee schedule is based on a percentage or some other formula of a current government healthcare fee schedule, such as Medicare;   Any change in a provider's reimbursement for drugs, immunizations, injectables, supplies, or devices if the provider and health insurance carrier or pharmacy benefits manager as defined by  56-7-3102 have previously agreed that any reimbursement for drugs, immunizations, injectables, supplies, or devices will be based on a percentage, or some other formula, of a price index not established by the health insurance carrier, such as the average wholesale price or average sales price;   Any changes in the provider's reimbursement for drugs, immunizations, injectables, supplies, or devices if the provider and the health insurance carrier or pharmacy benefits manager as defined in  56-7-3102 have previously agreed to any reimbursement for drugs, immunizations, injectables, supplies, or devices in accordance with  56-7-3104 and based upon maximum allowable cost pricing as regulated by  56-7-3101 and 56-7-3106;   Any change to Current Procedural Terminology (CPT) codes, Healthcare Common Procedure Coding System (HCPCS) codes, International Statistical Classification of Disease and Related Health Problems (ICD) Codes, or other coding sets recognized or used by Centers for Medicare and Medicaid Services (CMS) that a health insurance carrier utilized in creating a provider's fee schedule;   Any change to revenue codes as established by the National Uniform Billing Committee (NUBC);   Any changes in a provider's fee schedule due to one (1) or more of the following if previously agreed to in a provider's agreement with a health insurance carrier:   Payments made to the healthcare provider by the health insurance carrier or payments made to the health insurance carrier by the provider that are based on values or quality measures explicitly described in the written agreement between the provider and the health insurance carrier intended to improve care provided to the health insurance carrier's members;   Escalator or de-escalator clauses;   Provisions that require adjustments to payment due to population health management performance or results; or   Any arrangements, initiatives, or value-based payments relating to or resulting from the implementation or operation of the Tennessee Health Care Innovation Initiative or any successor state program applicable to provider agreements covered by this section.         Notwithstanding any law to the contrary, including other provisions of this section, nothing in this section applies to:  An enrollee's benefit package, or coverage terms and conditions, unrelated to application of fee schedules and reimbursements, including, but not limited to, provisions regarding eligibility for coverage, deductibles and copayments, coordination of benefits, and coverage limitations and exclusions;   An entity that is subject to delinquency proceedings and for which the commissioner of commerce and insurance has been appointed receiver, or an entity placed under administrative supervision by order of the commissioner pursuant to the Insurers Rehabilitation and Liquidation Act, compiled in chapter 9 of this title;   A contract amendment that is made due to a change in federal or state law;   A contract between a health insurance carrier and a healthcare provider for items or services to be provided for individuals covered by any Medicare Advantage, Medicare Select, Medicare Supplement, Medicare and Medicaid Enrollees (MME), Medicare Dual Special Needs, and Medicare Private Fee for Service; or the state, local government, and local education insurance plans established under title 8, chapter 27; or   The TennCare program or any successor Medicaid program provided for in title 71, chapter 5; the CoverKids Act of 2006, compiled in title 71, chapter 3, part 11; the Access Tennessee Act of 2006, compiled in part 29 of this chapter; any other plan managed by the health care finance administration division of the department of finance and administration or any successor division or department; or the group insurance plans offered under title 8, chapter 27.     
  Health insurance entities, as defined in  56-7-109, that contract with the state and perform services for the TennCare program or any successor program pursuant to title 71 shall establish reasonable protocols and procedures for reimbursing physicians employed by federally qualified health centers, so long as the protocols and procedures do not violate National Committee for Quality Assurance (NCQA) standards. At a minimum, the protocols and procedures shall:  Subject to approval of a physician credentialing application, permit physician reimbursement for rendered services from the date the physician's completed credentialing application is received for consideration by the health insurance entity; provided, however, that a contractual relationship exists between the provider or the group or facility for whom the physician works; and   Require that any reimbursement paid the physician shall be retroactively recouped or rescinded in the event the physician's credentialing application is denied.     As an alternative to subsection (a), health insurance entities, as defined in  56-7-109, that contract with the state and perform services for the TennCare program or any successor program pursuant to title 71 may establish an expedited credentialing process for reimbursing physicians employed by federally qualified health centers, so long as the process does not violate NCQA standards.   As used in this section, federally qualified health center means entities defined in  1861(aa) and 1905 of the federal Social Security Act (42 U.S.C.  1395x and 42 U.S.C.  1396d, respectively).   Nothing in this section shall require reimbursement of physician-rendered services that are not benefits or services covered by the health insurance entity.   
  No patient, insurer, or third party payor shall be required to reimburse any licensed practitioner for charges or claims submitted in violation of this part.   A clinical laboratory or physician, located in this state, or in another state, providing anatomic pathology services for patients in this state, shall present or cause to be presented a claim, bill or demand for payment for these services only to the following:  The patient directly;   The responsible insurer or other third-party payor;   The hospital, public health clinic, or nonprofit health clinic ordering such services;   The referring laboratory or a referring physician; provided, that:  A physician in the referring laboratory is performing or supervising the professional component of the anatomic pathology service for the patient; or   A referring physician has provided a written confirmation to the physician or laboratory providing the anatomic pathology service that the patient is not covered under any health care benefit program;     Governmental agencies and/or their specified public or private agent, agency, or organization on behalf of the recipient of the services.     Except for a physician billing for a referring laboratory's services pursuant to subsection (g) or (h), no licensed practitioner in the state shall, directly or indirectly, charge, bill, or otherwise solicit payment for anatomic pathology services unless such services were rendered personally by the licensed practitioner or under the licensed practitioner's direct supervision in accordance with  353 of the Public Health Service Act (42 U.S.C.  263a).   Nothing in this section shall be construed to mandate the assignment of benefits for anatomic pathology services as defined in this section or payment for anatomic pathology services under this section, or under any health care benefit program, to any practitioner or physician exempted from this section.   For purposes of this section, anatomic pathology services means:  Histopathology or surgical pathology, meaning the microscopic examination (professional component) and histologic processing of organ tissue (technical component) performed by a physician or under the supervision of a physician;   Cytopathology, meaning the microscopic examination of cells from the following:  Fluids;   Aspirates;   Washings;   Brushings; or   Smears, including the Pap test examination performed by a physician or under the supervision of a physician;     Hematology, meaning the microscopic evaluation of bone marrow aspirates and biopsies performed by a physician, or under the supervision of a physician, and peripheral blood smears when the attending or treating physician, or technologist requests that a blood smear be reviewed by a pathologist;   Sub-cellular pathology or molecular pathology, meaning the assessment of a patient specimen for the detection, localization, measurement, or analysis of one or more protein or nucleic acid targets;   Blood-banking services performed by pathologists.     For purposes of the section, health care benefit program means any group or individual insurance or health maintenance policy or contract, whether public or private, which provides benefits for medical items or services.   A referring physician may bill a patient not covered under a health care benefit program for an anatomic pathology service if the referring physician was billed pursuant to  56-7-1015(b)(4); provided, that the referring physician complies with the disclosure requirement of  63-6-214(b)(22) or  63-9-111(b)(22) and does not, directly or indirectly, markup or increase the actual amount billed by the physician or clinical laboratory that performed the anatomic pathology service.   This section does not prohibit a laboratory, physician, physician's office or group practice directly performing the professional component of the anatomic pathology service from billing for a referring laboratory's services in instances where a sample or samples must be sent to another physician or laboratory for consultation or histologic processing. For purposes of this subsection (h), referring laboratory means a laboratory that performs histologic processing or consultation on an anatomic pathology specimen.   Nothing in this section shall be construed to mandate the billing of any patient not covered under a health care benefit program, or any referring physician who has ordered an anatomic pathology service for a patient not covered under a health care benefit program.   Nothing in this section shall apply to anatomic pathology services billed by gastroenterologists on patients in this state until July 1, 2014.   The respective state licensing boards having jurisdiction over any practitioner who may request or provide anatomic pathology services may revoke, suspend or deny renewal of the license of any practitioner who violates this section.   
  This section shall be known and may be cited as the Tennessee Health Freedom Act.   As used in this section:  Healthcare services means any service, treatment, or provision of product for the care of physical or mental disease, illness, injury, defect or condition, or to otherwise maintain or improve physical or mental health, subject to all laws and rules regulating health service providers and products within this state;   Mode of securing means to purchase directly or on credit or by trade, or to contract for third-party payment by insurance or other legal means authorized by the state, or to apply for or accept employer or government-sponsored healthcare benefits under such conditions as may legally be required as a condition of such benefits, or any combination of the same;   Penalty means any civil or criminal fine, tax, salary or wage withholding, surcharge, fee or any other imposed consequence established by law or rule of a government or its subdivision or agency that is used to punish or discourage the exercise of rights protected under this chapter.      The power to require or regulate a person's choice in the mode of securing healthcare services, or to impose a penalty related thereto, is not found in the Constitution of the United States, and is therefore a power reserved to the people pursuant to the ninth amendment, and to the several states pursuant to the tenth amendment. This state hereby exercises its sovereign power to declare the public policy of this state regarding the right of all persons residing in this state in choosing the mode of securing healthcare services.   It is declared that the public policy of this state, consistent with our constitutionally-recognized and inalienable right of liberty, is that every person within this state is and shall be free to choose or to decline to choose any mode of securing healthcare services without penalty or threat of penalty; provided, however, that this title and title 36 concerning requirements for healthcare coverage of children in child support cases shall not be altered in any manner by this section.   It is declared that the public policy of this state, consistent with our constitutionally-recognized and inalienable right of liberty, is that every person within this state has the right to purchase health insurance or to refuse to purchase health insurance, unless purchase of health insurance is otherwise a condition of employment. The government may not interfere with a citizen's right to purchase health insurance or with a citizen's right to refuse to purchase health insurance. The government may not enact a law that would restrict these rights or that would impose a form of punishment for exercising either of these rights. Any law to the contrary shall be void ab initio.   The policy stated in this section shall not be applied to impair any right of contract related to the provision of healthcare services to any person or group.     No public official, employee, or agent of this state or any of its political subdivisions shall act to impose, collect, enforce, or effectuate any penalty in this state that violates the public policy set forth in this section.   
  As used in this section:  Covered services means dental care for which a reimbursement is available under the enrollee's plan contract, or for which a reimbursement would be available but for the application of contractual limitations such as deductibles, copayments, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, alternative benefits payments, or any other limitation; and   Participating provider means a dentist licensed to practice dentistry in this state, who provides dental services to an enrollee at a fee set by or at a fee subject to the approval of an insurer, dental services plan, third party administrator or any other party that contracts to provide dental services.     No contract offered by any insurer, dental service plan, third party administrator or other party that covers any dental services, and no contract or participating provider agreement with a dentist may require, directly or indirectly, that a dentist who is a participating provider, provide services to an enrollee at a fee set by, or at a fee subject to the approval of the dental service plan, insurer, third party administrator or other party that covers any dental plan services unless the dental services are covered services.   No contract offered by any insurer, dental service plan, third party administrator or other party with a participating provider that covers any covered services may provide nominal or de minimis coverage for covered services under the contract for the sole purpose of avoiding the requirements of this section.   Nothing in this section shall apply to the TennCare program and any medical assistance provided pursuant to title 71, chapter 5, or to the state children's health insurance program established under title XXI of the Social Security Act, subchapter XXI, chapter 7 of title 42 (42 U.S.C.  1397aa et seq.).   
   In all cases arising out of the use of a motor vehicle on which the owner of the motor vehicle has any insurance coverages, the owner's policy is primary if the vehicle is being operated with the permission of the owner and within the scope of the permission granted.   Any other coverages that may be available to the permittee are not applicable unless and until the limits of all coverages provided by the owner's policy first are exhausted.     Any provision of subdivision (a)(1) or (a)(2) to the contrary notwithstanding, where the only insurance coverage provided by the owner of the vehicle is under a garage policy, then any coverage that may be available to the permittee shall be primary and the coverage under the owner's garage policy shall not be applicable unless and until the limits of all coverage available to the permittee shall be first exhausted; provided, that when any non-owned vehicle is in the possession, custody or control of a person who is in the business of storing, parking, servicing or repairing vehicles, then any insurance available to the owner shall not be applicable unless and until all insurance that is available under a garage policy of the person in possession has been exhausted.   When a claim arises out of the operation of a motor vehicle that is leased under a written lease agreement, and pursuant to which agreement the lessee provides coverage for the vehicle, then any other coverage that may be available for the vehicle through the lessor is not applicable unless and until the limits of all coverage provided by the lessee for the vehicle first are exhausted.   Subsections (a) and (c) are effective as to all policies written after May 7, 1973, and to all renewals of existing policies made after May 7, 1973. Subsection (b) is effective as to all policies written after April 5, 1974, and to all renewals of existing policies made after April 5, 1974.   
  Any insurer licensed to write automobile liability insurance in this state may issue a noncancellable and guaranteed renewable automobile liability insurance policy, which shall not be cancelled by the insurer and may be renewed at the option of the insured for so long as:  The insurer remains licensed to write automobile liability insurance in this state;   The insured and all other operators of the insured motor vehicle maintain valid operator's licenses;   All premiums, premium balances and renewal premiums are paid when due; and   The insured motor vehicle is used for any purpose for which the insurer has a valid rate approved by the commissioner.     If membership in any organization is a prerequisite for the issuance of all policies by an insurer, then the insurer may require active membership and continuation of active membership for the issuance of the policy or renewal of the policy issued by the insurer.   Any insurer who issues an automobile liability insurance policy with noncancellable or guaranteed renewable restrictions, using rates or rating plans filed with and approved by the commissioner, may not be bound by the restrictions if any rates or rating plans that have been filed for the specific use of the policies are subsequently rejected by the commissioner.   
 Sections 56-7-1103  56-7-1105 are applicable only in causes of action arising out of the ownership or operation of a motor vehicle when service of process cannot be obtained on the owner or operator of the motor vehicle by either personal service of process or by service on the secretary of state where there is a nonresident involved.  
  Upon a sheriff's return of not to be found within the particular county, or upon the secretary of state being unable to complete process upon the defendant or defendants, the plaintiff may serve demand notice upon the liability insurance carrier to reveal the location and whereabouts of the defendant automobile owner or operator.   If the carrier is not a domestic company, the demand notice shall be through the commissioner. The demand notice shall be by certified mail with a return receipt requested and shall include a certified copy of the sheriff's return.   The liability insurance carrier shall, upon notice, reveal to the plaintiff or the plaintiff's attorney any information it possesses as to the location of the defendant automobile operator or owner.   
 Willful violation of  56-7-1103, 56-7-1104 and this section by the liability insurance carrier shall render the carrier liable in damages to the plaintiff.  
 When a creditor or lender requires a borrower to purchase collision insurance as a condition to obtaining a loan to purchase an automobile, and sells collision, but not liability, insurance to the borrower, then the creditor or lender shall provide written notice to the borrower that no liability insurance is being sold. This written notice shall be signed by the borrower and explained to the borrower as a part of or together with the loan papers executed by the borrower.  
  The rates and premiums for every policy of automobile insurance shall include a provision for appropriate reductions, as determined by the insurer to be actuarially justified, for any motor vehicle when the regular operators are over fifty-five (55) years of age and have successfully completed a motor vehicle accident prevention course approved by the commissioner of safety; however, there shall be no reduction in premiums for a self-instructed course. For purposes of this section, self-instructed course shall not include an online course that is approved by the commissioner pursuant to subsection (c).    The premium reduction shall remain in effect for the qualifying insured for a period of three (3) years from the date of successful completion of the accident prevention course, except that the insurer may elect to apply the premium reduction beginning at the next renewal date of the policy and continuing for a three-year period.   The period of premium reduction for an operator who has repeated the accident prevention course shall be based only upon the last course the operator has successfully completed.     Any accident prevention course approved under this section shall be taught by an instructor approved by the commissioner, and the course shall consist of at least eight (8) hours of classroom instruction or an online course that is approved by the commissioner. Each operator who successfully completes an approved motor vehicle accident prevention course shall be issued a certificate by the course's sponsoring agency. Records of completion shall be maintained in a manner acceptable to the commissioner and shall be the basis of qualification for the premium discount.   Any person claiming eligibility for a rate or premium reduction shall be responsible for providing to the person's insurance company the information necessary to determine eligibility.   This section does not apply to:  Any motor vehicle that is a part of a fleet or is used for commercial purposes unless there is a regularly assigned principal operator;   Any motor vehicle subject to a higher rate or premium because of an operator's previous motor vehicle claims experience, or to any motor vehicle whose operator has been convicted or forfeited bond for the violation of any of the motor vehicle laws of this state, until that operator shall have maintained a driving record free of at-fault accidents or violations for a continuous period of three (3) years;   Any motor vehicle whose operator has had an operator's license revoked or suspended for any reason within the previous three (3) years; or   Any motor vehicle whose operator is required by any court to take a defensive driver training course.     The department of safety is authorized to promulgate rules and regulations to effectuate the purposes of this section. The rules and regulations shall include establishing the criteria for the motor vehicle accident prevention course and providing a means of certification for instructors of the motor vehicle accident prevention course and certification of an online motor vehicle accident prevention course. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
 Whenever a full-time employee of municipal, county, or state government is involved in a traffic accident while acting as the agent of the governmental employer and while operating a motor vehicle owned by the governmental employer, the accident shall in no way be considered by the employee's personal automobile insurance carrier in fixing insurance premiums, nor shall it cause any increase in the employee's personal automobile insurance premiums.  
  Whenever a person who is employed as a driver is involved in a traffic accident in the course of employment and while operating a motor vehicle owned by or leased to the person's employer, the accident shall in no way be considered by the person's personal automobile insurance carrier in fixing insurance premiums, nor shall it cause any increase in the person's personal automobile insurance premiums, if the accident did not involve negligence on the part of the person. Likewise, an accident involving the person while using the person's personal vehicle and not involving negligence by the person shall not be considered relative to insurance or premiums for the person's employer.   Whenever a person is involved in a traffic accident while operating a motor vehicle, if the accident did not involve negligence on the part of the person, it shall in no way be considered by the person's personal automobile insurance carrier in fixing premiums, nor shall it cause any increase in the person's personal automobile insurance premiums. Likewise, an accident involving the person, while operating another person's insured vehicle under the other person's authority and not involving negligence on the part of the driver, shall not cause an increase in the personal automobile insurance premiums for the owner of the vehicle; provided, that the owner did not violate any contractual duties or obligations by authorizing the driver to operate the vehicle.   
 Any rental car company, offering for sale insurance coverage or collision damage waivers, shall state clearly on the front page of the rental contract that the purchaser of the insurance coverage or collision damage waiver offered may be covered for such claims on the purchaser's personal motor vehicle insurance policy, and that if such insurance coverage exists under the renter's personal insurance policy, and the coverage is confirmed, the renter may require the rental car company to submit any claims to the renter's personal insurance carrier as the renter's agent. The rental car company shall not make any written or oral representations that it will not present claims or negotiate with the renter's insurance carrier. As used in this section, confirmation of coverage includes telephone confirmation from an insurance company representative.  
  If, at the request of the insurer, an appraisal of personal property to be insured under an automobile policy insuring an antique automobile is made, then, in the absence of fraud, the appraised value of the property shall be binding on the insurer if the insurer:  Charges and accepts a premium for the policy or endorsement to the policy that is based on the amount of the appraised value; and   Issues a policy or endorsement to the policy that provides coverage of the property in the amount of the appraised value.     This section shall apply only to policies insuring antique automobiles delivered, issued for delivery or renewed in this state after July 1, 1990.   
 For the purposes of motor vehicle coverage under this part for policies issued on or after July 1, 1997, a foreign exchange student shall be considered for coverage as a natural child of the adult under whose policy the child would be covered, if the adult provides the insurer with name, date of birth, and driver license number of the student.  
 The general assembly finds that the acts and practices prohibited in  56-7-1114  56-7-1116 are unfair, deceptive, and/or fraudulent. The practices cause the insurer to incur higher costs and to pay a greater amount of claims than would be the case in the absence of the practices, unreasonably interfere with the contract of insurance between the insurer and the insured, and unfairly increase the risk assumed by the insurer.  
  It is an unfair, deceptive, and/or fraudulent act for any person or entity engaged in automobile glass replacement or glass repair services or the provision of automobile glass products to knowingly:  Offer to finance payment of the customer's deductible on terms different from terms offered to customers not making an insurance claim;   Engage in a pattern or practice, on more than an occasional or isolated instance, of promising or offering to provide any credit, incentive, gift, rebate or special financing arrangement in satisfaction of all or part of an insurance deductible and/or co-payment owed by an insured under a policy of insurance;   Advertise, promote, or represent by any media, telemarketers or others, that services are free, if in fact an insurer will pay for the service and/or advertise or make offers for the purpose of soliciting a claim against a property or casualty insurance carrier; or   Engage in a pattern or practice, on more than an occasional or isolated instance of offering to defer collection of, discount, or issue a repayment of a customer's deductible based in whole, or in part, on the availability of insurance coverage.     Any person or entity who suffers an economic loss as a result of the violation of this section may bring an action to recover actual damages in a court of competent jurisdiction in the county where the violation occurred or in any county where the defendant resides or conducts, transacts, or has transacted business.   
  Any insurance company processing a claim submitted on behalf of an insured by a person who is engaged in automobile glass replacement or glass repair services or the provision of automobile glass products to whom the insured has assigned benefits under an insurance policy may refuse payment of any claim which involves an unfair, deceptive and/or fraudulent practice as provided in  56-7-1113  56-7-1116.   When there is reason to believe the practices may have occurred, insurance companies may require verified proof that the insured has, in fact, fully incurred and paid any deductible and/or co-payment required under the insurance policy.   
 A violation of  56-7-1113  56-7-1116 also constitutes a violation of the Consumer Protection Act, compiled in title 47, chapter 18, part 1, subject only to the civil remedies provided in title 47, chapter 18, part 1, including treble damages and attorney's fees.  
 When any person, as lienholder, secured party, assignee, or otherwise, possesses or has any vehicle insurance policy made payable to the person, or other person as that person's interest may appear, then the insurance as to the interest of the lienholder, secured party, assignee or other person named in the policy shall not be invalidated by an intentional act or omission of the owner of the vehicle so insured.  
  Automobile liability insurers, as defined in  55-12-203, shall comply with any requirements set forth in the James Lee Atwood Jr. Law, compiled in title 55, chapter 12, part 2, and any rules promulgated thereto.   Automobile liability insurers, as defined in  55-12-203, shall also comply with the following requirements:  Cooperate with the department of revenue or its designated agent, the department of safety, and the department of commerce and insurance in establishing, operating, and maintaining the vehicle insurance verification program, as defined in  55-12-203;   Maintain the data necessary to verify the existence of financial responsibility, including liability insurance coverage provided to its customers pursuant to the required time period established by the department of revenue, for the vehicle insurance verification program;   Maintain Internet service, pursuant to the requirements established under the James Lee Atwood Jr. Law, through which online insurance verification can take place, including responding to authorized inquiries from the department of revenue or its designated agent of the vehicle insurance verification program; and   Provide security consistent with accepted insurance industry and United States motor vehicle agency standards related to the transmission of personal data.     Automobile liability insurers that make a good faith effort to comply with the requirements described in subsections (a) and (b), shall have immunity from civil and administrative liability as to any action related to the good faith effort.   
  As used in this section:  Digital network means any online-enabled application, software, web site, or system offered or utilized by a transportation network company that enables the prearrangement of rides with transportation network company drivers;   Personal vehicle means a vehicle that is used by a transportation network company driver and is:  Owned, leased, or otherwise authorized for use by the transportation network company driver; and   Not a taxicab, limousine, or for-hire vehicle;     Prearranged ride means the provision of transportation by a driver to a rider, beginning when a driver accepts a ride requested by a rider through a digital network controlled by a transportation network company, continuing while the driver transports a requesting rider, and ending when the last requesting rider departs from the personal vehicle. A prearranged ride does not include:  Shared expense carpool or vanpool arrangements provided by businesses engaged in the rental of motor vehicles; or   Transportation provided using a taxi, limousine, or other for-hire vehicle regulated pursuant to  7-51-1003;     Transportation network company means a corporation, partnership, sole proprietorship, or other entity operating in this state that uses a digital network to connect transportation network company riders to transportation network company drivers who provide prearranged rides. A transportation network company shall not be deemed to control, direct, or manage the personal vehicles or transportation network company drivers that connect to its digital network, except where agreed to by written contract;   Transportation network company driver or driver means an individual who:  Receives connections to potential passengers and related services from a transportation network company in exchange for payment of a fee to the transportation network company; and   Uses a personal vehicle to provide a prearranged ride to riders upon connection through a digital network controlled by a transportation network company in return for compensation or payment of a fee; and     Transportation network company rider or rider means a person or persons who use a transportation network company's digital network to connect with a transportation network driver who provides prearranged rides to the rider in the driver's personal vehicle between points chosen by the rider.     Insurers that write automobile insurance in this state may exclude any and all coverage afforded under the policy issued to an owner or operator of a personal vehicle for any loss or injury that occurs while a driver is logged on to a transportation network company's digital network or while a driver provides a prearranged ride. This right to exclude all coverage may apply to any coverage included in an automobile insurance policy including, but not limited to:  Liability coverage for bodily injury and property damage;   Uninsured and underinsured motorist coverage;   Medical payments coverage;   Comprehensive physical damage coverage; and   Collision physical damage coverage.     The exclusions in subsection (b) shall apply notwithstanding any requirement under this title or under title 55, chapter 12. Nothing in this section requires that a personal automobile insurance policy provide coverage while the driver is logged on to the transportation network company's digital network, while the driver is engaged in a prearranged ride, or while the driver otherwise uses a vehicle to transport passengers for compensation.   Automobile insurers that exclude coverage as described in subsection (b) shall have no duty to defend or indemnify any claim expressly excluded. Nothing in this section shall invalidate or limit an exclusion contained in a policy, including any policy in use or approved for use in this state prior to May 20, 2015, that excludes coverage for vehicles used to carry persons or property for a charge or available for hire by the public.   An automobile insurer that defends or indemnifies a claim against a driver that is excluded under the terms of its policy as described in subsection (b) shall have a right of contribution against other insurers that provide automobile insurance to the same driver in satisfaction of the coverage requirements of  55-12-141 at the time of loss.   In a claims coverage investigation, transportation network companies and any insurer potentially providing coverage under  55-12-141 shall cooperate to facilitate the exchange of relevant information with directly involved parties and any insurer of the transportation network company driver, if applicable, including the precise times that a transportation network company driver logged on and off of the transportation network company's digital network in the twelve-hour period immediately preceding and in the twelve-hour period immediately following the accident and disclose to one another a clear description of the coverage, exclusions, and limits provided under any automobile insurance maintained under  55-12-141.   Nothing in this section shall preclude an insurer from providing coverage for a transportation network company driver's vehicle, if it so chooses to do so by contract or endorsement.    Nothing in this section shall limit the right of a lender or secured party of a driver's vehicle to require a driver to maintain comprehensive damage coverage, collision damage coverage, or both for a driver's vehicle, or to show evidence of such coverage to the lender or secured party, that would cover the period when the driver is logged on to the transportation network company's digital network but is not engaged in a prearranged ride or when the driver is engaged in a prearranged ride. If the driver fails to maintain the required comprehensive or collision damage coverage, or to show evidence to the lender or secured party of the coverage upon reasonable request by the lender or secured party, the lender or secured party may obtain the coverage at the expense of the driver and shall have no duty to provide the disclosure under  56-7-1106.   If a lender or a secured party has a secured interest in a driver's vehicle and a transportation network company's insurer makes a payment for a claim for damage to the driver's vehicle that is covered under comprehensive or collision damage coverage held by the transportation network company, then the transportation network company shall cause its insurer to issue the payment either directly to the vehicle repair shop or jointly to the owner of the vehicle and the primary lender or secured party on the covered vehicle.     
  As used in this section:  Car sharing delivery period means the period of time during which a shared vehicle is being delivered to the location of the car sharing start time, if applicable, as documented by the governing car sharing program agreement;   Car sharing period means the period of time:  That commences with the car sharing delivery period and ends at the car sharing termination time; or   If there is no car sharing delivery period, that commences with the car sharing start time and ends at the car sharing termination time;     Car sharing program agreement:  Means the terms and conditions applicable to a shared vehicle owner and a shared vehicle driver that govern the use of a shared vehicle through a peer-to-peer car sharing program; and   Does not mean a rental car agreement with a rental car company;     Car sharing start time means the time when the shared vehicle becomes subject to the control of the shared vehicle driver at or after the time the reservation of a shared vehicle is scheduled to begin as documented in the records of a peer-to-peer car sharing program;   Car sharing termination time means the earliest of the following events:  The expiration of the agreed upon period of time established for the use of a shared vehicle according to the terms of the car sharing program agreement if the shared vehicle is delivered to the location agreed upon in the car sharing program agreement;   When the shared vehicle is returned to a location as alternatively agreed upon by the shared vehicle owner and shared vehicle driver as communicated through a peer-to-peer car sharing program; or   When the shared vehicle owner, or the shared vehicle owner's authorized designee, takes possession and control of the shared vehicle;     Peer-to-peer car sharing:  Means the authorized use of a vehicle by an individual other than the vehicle's owner through a peer-to-peer car sharing program; and   Does not include the services offered by a rental car company;     Peer-to-peer car sharing program:  Means a business platform that connects vehicle owners with drivers to enable the sharing of vehicles for financial consideration; and   Does not include:   The services offered by a rental car company; or   A service provider who is solely providing hardware or software as a service to a person or entity that is not effectuating payment of financial consideration for use of a shared vehicle;       Rental car company means a business engaged in the rental of motor vehicles that is subject to title 67, chapter 4, part 19, and not a peer-to-peer car sharing program;   Shared vehicle:  Means a vehicle that is available for sharing through a peer-to-peer car sharing program; and   Does not mean a rental vehicle provided by a rental car company;     Shared vehicle driver means an individual who has been authorized to drive the shared vehicle by the shared vehicle owner under a car sharing program agreement; and   Shared vehicle owner means the registered owner, or a person or entity designated by the registered owner, of a vehicle made available for sharing to shared vehicle drivers through a peer-to-peer car sharing program.     An authorized insurer that writes motor vehicle liability insurance in the state may exclude any and all coverage and the duty to defend or indemnify for any claim afforded under a shared vehicle owner's motor vehicle liability insurance policy, including, but not limited to:  Liability coverage for bodily injury and property damage;   Uninsured and underinsured motorist coverage;   Medical payments coverage;   Comprehensive physical damage coverage; and   Collision physical damage coverage.     The exclusions in subsection (b) apply notwithstanding any requirement in this title or title 55, chapter 12. This section does not require that a personal automobile insurance policy provide coverage during a car sharing period.   Automobile insurers that exclude coverage as described in subsection (b) have no duty to defend or indemnify any claim expressly excluded. This section and title 55, chapter 12, do not invalidate or limit an exclusion contained in the policy, including any policy in use or approved for use in this state prior to January 1, 2021, that excludes coverage for vehicles that are rented or that are engaged in a commercial use.   A motor vehicle insurer that defends or indemnifies a claim against a shared vehicle that is excluded or not covered under the terms of its policy may seek contribution from any other motor vehicle insurer providing coverage required by  55-12-302(d), except to the extent the shared vehicle is excluded or not covered under the terms of the other policy.   In a claims investigation involving a shared vehicle, the insurer of the peer-to-peer car sharing program, the insurer of the shared vehicle owner, and the insurer of the shared vehicle driver shall cooperate with each other to facilitate the exchange of relevant information, including, without limitation, records that the peer-to-peer car sharing program is required to collect under title 55, chapter 12, part 3. The insurer of the peer-to-peer car sharing program, the insurer of the shared vehicle owner, and the insurer of a shared vehicle driver shall disclose to each other a clear description of the coverage, exclusions, and limits provided in their respective policies.    Notwithstanding any other law, statute, or rule to the contrary, a peer-to-peer car sharing program has an insurable interest in a shared vehicle during the car sharing period.   This section does not create liability on a peer-to-peer car sharing program to maintain insurance coverage beyond the extent mandated by  55-12-302.   A peer-to-peer car sharing program may own and maintain as the named insured one (1) or more policies of motor vehicle liability insurance that provides coverage for:  Liabilities assumed by the peer-to-peer car sharing program under a peer-to-peer car sharing program agreement;   Any liability of the shared vehicle owner; or   Damage or loss to the shared motor vehicle or any liability of the shared vehicle driver.       This section does not preclude an insurer from providing coverage for a peer-to-peer car sharing program or a shared vehicle owner, if it chooses to do so by contract or endorsement.   
  Every automobile liability insurance policy delivered, issued for delivery or renewed in this state, covering liability arising out of the ownership, maintenance, or use of any motor vehicle designed for use primarily on public roads and registered or principally garaged in this state, shall include uninsured motorist coverage, subject to provisions filed with and approved by the commissioner, for the protection of persons insured under the policy who are legally entitled to recover compensatory damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting from injury, sickness or disease.  The limits of the uninsured motorist coverage shall be equal to the bodily injury liability limits stated in the policy.   However, any named insured may reject in writing the uninsured motorist coverage completely or select lower limits of the coverage but not less than the minimum coverage limits in  55-12-107. Any document signed by the named insured or legal representative that initially rejects the coverage or selects lower limits shall be binding upon every insured to whom the policy applies, and shall be conclusively presumed to become a part of the policy or contract when issued or delivered, regardless of whether physically attached to the policy or contract. Unless the named insured subsequently requests the coverage in writing, the rejected coverage need not be included in or supplemental to any continuation, renewal, reinstatement, or replacement of the policy, or the transfer of vehicles insured under the policy, where the named insured had rejected the coverage in connection with a policy previously issued by the same insurer; provided, that whenever a new application is submitted in connection with any renewal, reinstatement or replacement transaction, this section shall apply in the same manner as when a new policy is being issued.   No uninsured or underinsured motorist coverage need be provided in this state by an excess or umbrella policy of insurance.      With respect to bodily injury to an insured, at a time when the insured is not occupying any motor vehicle, the insurance on the vehicle under which the injured party is an insured with the highest limits of uninsured motorist coverage shall apply, and no other uninsured motorist coverage shall apply. In no instance shall uninsured motorist coverage from more than one (1) policy be available as primary coverage, nor shall the injured party be an occupant of more than one (1) vehicle at one (1) time.   With respect to bodily injury to an insured while occupying a motor vehicle owned by the insured, only the limits of uninsured motorist coverage on the vehicle in which the insured was an occupant shall apply. The limits of uninsured motorist coverage shall not be increased because of multiple motor vehicles whether covered under a single policy or multiple policies, and in no event shall the total amount of recovery from all policies and bonds, including any amount recovered under the insured's uninsured motorist coverage, exceed the limits of the insured's uninsured motorist coverage.   With respect to bodily injury to an insured while occupying an automobile not owned by the insured, the following priorities of recovery under uninsured motorist coverage apply:  The uninsured motorist coverage on the vehicle in which the insured was an occupant shall be the primary uninsured motorist coverage;   If uninsured motorist coverage on the vehicle in which the insured was an occupant is exhausted due to the extent of compensatory damages, then the uninsured motorist coverage provided by a policy under which the insured is a named insured shall be applicable as excess coverage to the policy described in subdivision (b)(1); provided, that if the insured is covered as a named insured under more than one (1) policy, then only the policy with the highest limits of uninsured motorist coverage shall apply;   If the uninsured motorist coverage provided under the policies described in subdivisions (b)(3)(A) and (B), if applicable, is exhausted due to the extent of compensatory damages, then the uninsured motorist coverage provided by a policy under which the insured is covered other than as a named insured shall be applicable as excess coverage to the policies listed in subdivisions (b)(3)(A) and (B); provided, that if the insured is covered by more than one (1) such policy, then only the policy with the highest limits of uninsured motorist coverage shall apply; and   In no instance shall the insured be entitled to receive total benefits from all policies listed in subdivisions (b)(3)(A)-(C) in an amount greater than the limits of the policy providing the highest limits of uninsured motorist coverage.        Every insured purchasing uninsured motorist bodily injury coverage shall be provided an opportunity to include uninsured motorist property damage coverage, subject to provisions filed with and approved by the commissioner, applicable to losses in excess of two hundred dollars ($200). However, the deductible of two hundred dollars ($200) shall not apply if:  The vehicle involved in the accident is insured by the same insurer for both collision and uninsured motorist property damage coverage; and   The operator of the other vehicle has been positively identified and is solely at fault.     No insurer shall be required to offer limits of property damage coverage greater in amount than the property damage liability limits purchased by the insured. After the uninsured motorist property damage coverage has been made available to an insured one (1) time and has been rejected in writing, it need not again be made available in any continuation, renewal, reinstatement, or replacement of the policy, or the transfer of vehicles insured under the policy, unless the insured makes a written request for the coverage; provided, that whenever a new application is submitted in connection with any renewal, reinstatement, or replacement transaction, this section shall apply in the same manner as when a new policy is being issued. As used in this section, property damage means damage to either the insured vehicle or property owned by an insured while in the insured vehicle.     The limit of liability for an insurer providing uninsured motorist coverage under this section is the amount of that coverage as specified in the policy less the sum of the limits collectible under all liability and/or primary uninsured motorist insurance policies, bonds, and securities applicable to the bodily injury or death of the insured. With regard to a claim against a governmental unit, political subdivision or agency thereof, the limitations of liability established under applicable law shall be considered as limits collectible under a liability insurance policy.   If the owner or operator of any motor vehicle that causes bodily injury or property damage to the insured is unknown, the insured shall have no right to recover under the uninsured motorist provision unless:   Actual physical contact has occurred between the motor vehicle owned or operated by the unknown person and the person or property of the insured; or   The existence of the unknown motorist is established by clear and convincing evidence, other than any evidence provided by occupants in the insured vehicle;     The insured or someone in the insured's behalf has reported the accident to the appropriate law enforcement agency within a reasonable time after its occurrence; and   The insured was not negligent in failing to determine the identity of the other vehicle and the owner or operator of the other vehicle at the time of the accident.     No insurer shall increase the automobile insurance rate or premium of an insured with uninsured motorist coverage nor cancel the coverage due solely to the payment of any claim under uninsured motorist coverage.   Failure of the motorist from whom the insured is legally entitled to recover damages to file the appropriate forms required by the department of safety pursuant to the Financial Responsibility Law, compiled in title 55, chapter 12, within ninety (90) days of the accident date shall create a rebuttable presumption that the motorist was uninsured at the time of the accident. After the ninety (90) days and upon paying a fee as set by the department, the commissioner shall issue a certified affidavit indicating whether the forms have been filed.   An insurer's proof of compliance with this section may be accomplished by the capture of the named insured's signature or initials, or that of the insured's legal representative, by means of electronic imaging. However, this subsection (h) shall not be construed to authorize utilization of an electronic image of the signature or initials for any purpose other than demonstrating insurer compliance with the requirements of this section. In accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, the commissioner shall promulgate rules prescribing fines and/or other disciplinary actions to be imposed for insurer misuse of an electronic image of the signature or initials.   
   For the purpose of uninsured motor vehicle coverage, uninsured motor vehicle means a motor vehicle whose ownership, maintenance, or use has resulted in the bodily injury, death, or damage to property of an insured, and for which the sum of the limits of liability available to the insured under all valid and collectible insurance policies, bonds, and securities applicable to the bodily injury, death, or damage to property is less than the applicable limits of uninsured motorist coverage provided to the insured under the policy against which the claim is made; and   Uninsured motor vehicle does not include a motor vehicle:  Insured under the liability coverage of the same policy of which the uninsured motor vehicle coverage is a part;   Owned by, or furnished for the regular use of, the insured or any resident spouse or resident relative in the same household;   Self-insured within the meaning of the Tennessee Financial Responsibility Law, compiled in title 55, chapter 12, or any similar state or federal law;   Designed for use mainly off public roads or any off-highway vehicle, as defined in  55-8-101, except while the vehicle is operated on public roads pursuant to  55-8-185 or other law; or   While located for use as premises.       Notwithstanding any other law, the applicable limits of liability for a governmental unit, political subdivision or agency thereof for claims arising out of the operation of a motor vehicle shall be considered as liability coverage available under a valid and collectible insurance policy.   
 An insurer's insolvency protection shall be applicable only to accidents occurring during a policy period in which its insured's uninsured motorist coverage is in effect where the liability insurer of the tortfeasor becomes insolvent within one (1) year after the accident. Nothing in this section shall be construed to prevent any insurer from affording insolvency protection under terms and conditions more favorable to its insureds than is provided in this section.  
  In the event of payment to any person under the coverage required by this part, and subject to the terms and conditions of the coverage, the insurer making payment shall, to the extent of the coverage, be subrogated to all of the rights of the person to whom payment has been made, and shall be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of the person against any person or organization legally responsible for the bodily injury or property damage for which payment is made, including the proceeds recoverable from the assets of an insolvent insurer.   Payment by an insurer under the coverage required by this part shall not constitute a satisfaction of the liability of the party or parties responsible for the bodily injury or property damage under the financial responsibility laws of this state.   
 Nothing contained in this part shall be construed as requiring the forms of coverage provided pursuant to this part, whether alone or in combination with similar coverage afforded under other automobile liability policies, to afford limits in excess of those that would be afforded had the insured under the policies been involved in an accident with a motorist who was insured under a policy of liability insurance with the minimum limits described in  55-12-107, or the uninsured motorist liability limits of the insured's policy if the limits are higher than the limits described in  55-12-107. The forms of coverage may include terms, exclusions, limitations, conditions, and offsets that are designed to avoid duplication of insurance and other benefits.  
  Any insured intending to rely on the coverage required by this part shall, if any action is instituted against the owner and operator of an uninsured motor vehicle, serve a copy of the process upon the insurance company issuing the policy in the manner prescribed by law, as though the insurance company were a party defendant. The company shall thereafter have the right to file pleadings and take other action allowable by law in the name of the owner and operator of the uninsured motor vehicle or in its own name; provided, that nothing in this subsection (a) shall prevent the owner or operator from employing counsel of the owner's own choice; and provided, further, that the evidence of service upon the insurance carrier shall not be made a part of the record.   If the owner or operator of any motor vehicle that causes bodily injury or property damage to a person insured under this part is unknown and if the insured satisfies all of the requirements of  56-7-1201(e), should suit be instituted, the insured shall issue a John Doe warrant against the unknown owner or operator in order to come within the coverage of the owner's uninsured motorist policy. If the uninsured motorist's identity and whereabouts are discovered during the pendency of the proceeding, subsection (e) shall govern the proper course of action following the discovery.   The uninsured motorist provision shall not require arbitration of any claim arising thereunder nor shall the insured be restricted or prevented in any manner from employing legal counsel or instituting legal proceedings.   In the event that service of process against the uninsured motorist, which was issued to the motorist's last known address, is returned by the sheriff or other process server marked, Not to be found in my county, or words to that effect, or if service of process is being made upon the secretary of state for a nonresident uninsured motorist and the registered notice to the last known address is returned without service on the uninsured motorist, the service of process against the uninsured motorist carrier, pursuant to this section, shall be sufficient for the court to require the insurer to proceed as if it is the only defendant in the case.   In the event the uninsured motorist's whereabouts is discovered during the pendency of the proceedings, an alias process may issue against the uninsured motorist. In such a case, the uninsured motorist shall be allowed a reasonable time within which to plead to the original process, and then the case may proceed against the uninsured motorist as if the motorist was served with process in the first instance.   Notwithstanding subsection (c), if a party or parties alleged to be liable for the bodily injury or death of the insured offers the limits of all liability insurance policies available to the party or parties in settlement of the insured's claim, the insured or the insured's personal representative may accept the offer, execute a full release of the party or parties on whose behalf the offer is made and preserve the right to seek additional compensation from the insured's uninsured motorist insurance carrier upon agreement of the insured or the insured's personal representative to submit the insured's uninsured motorist claim to binding arbitration of all issues of tort liability and damages, provided:   The offer must be for the sum of the limits of all liability insurance policies providing coverage to the party or parties on whose behalf the offer is made and in an aggregate amount that is less than the uninsured motorist coverage applicable to the bodily injury or death of the insured; or   If, by payments to other injured parties, the limits of all liability insurance policies providing coverage to the party or parties on whose behalf the offer is made have been reduced to an amount that is less than the limits of the insured's uninsured motorist coverage, the offer must be for the total amount of coverage that remains available to the party or parties on whose behalf the offer is made; and     If the settlement does not release all parties alleged to be liable to the insured, arbitration of the uninsured motorist claim shall not be conducted until the claims against all such other parties have been fully and finally disposed of by settlement, final judgment or otherwise.     Parties proposing to accomplish a settlement pursuant to this section shall comply with the following requirements and conditions:  Upon request, the insured or the insured's personal representative or attorney shall provide the liability insurance company or companies providing coverage to the party or parties to be released, the name and address of the insurance company or companies providing the insured with uninsured motorist coverage, the policy number or numbers and the limits of uninsured motorist coverage available to the insured;   The liability insurance company or companies providing coverage to the party or parties to be released shall give written notice of the offer to the insured's uninsured motorist insurance carrier or its attorney, provide verification of the coverage upon request and confirm to the uninsured motorist insurance carrier or its attorney that the party or parties to be released will agree in writing to cooperate with the uninsured motorist insurance carrier in connection with the arbitration of the uninsured motorist claim; provided, that the uninsured motorist insurance carrier will agree to waive its subrogation rights against the party or parties to be released;   The insured or the insured's personal representative or attorney shall give written notice to the uninsured motorist insurance carrier or its attorney of the insured's intent to accept the offer and agreement to submit the uninsured motorist claim to binding arbitration;   After receipt of both of the notices referred to in subdivisions (g)(2) and (3), the uninsured motorist insurance carrier shall have thirty (30) days to give notice to its insured or the insured's personal representative or attorney and the liability insurance carrier or carriers or their attorneys that it consents to the settlement, that it will agree to binding arbitration of the insured's uninsured motorist claim and that it will waive its subrogation rights against the party or parties to be released in exchange for their written agreement to cooperate in connection with the arbitration;   Upon receipt of the notice required by subdivision (g)(4), the insured may proceed to execute a release of the party or parties on whose behalf the offer was made and upon execution of the release, receive payment of the settlement proceeds; and   The notices required by subdivisions (g)(2), (3) and (4) shall be given by certified mail, return receipt requested, or by some other method pursuant to which the sender receives written verification that the notice was received.      The arbitration provided for in this section shall be conducted pursuant to this section and pursuant to the Uniform Arbitration Act, compiled in title 4, chapter 5, part 3 and to title 29, chapter 5, parts 1 and 3.   The arbitrator shall be selected by agreement of the parties. Notwithstanding  29-5-304, if the parties are unable to agree, either party may request a judge of a court of record in the county in which the arbitration is pending to designate three (3) potential arbitrators. The parties shall then agree upon one (1) of the three (3) arbitrators so designated.   Unless the parties agree otherwise, the arbitration will take place in the county in which the insured resides and the rules of evidence applicable to the state courts where the arbitration is conducted shall apply.   The arbitrator shall not be informed as to the amount or amounts collected by the insured by way of settlement or judgment prior to the conclusion of the arbitration. Disclosure of the information prior to the conclusion of the arbitration will result in disqualification of the arbitrator.   Coverage issues shall be decided by a court of competent jurisdiction. The arbitrator shall decide issues of tort liability and damages only. The arbitrator shall first decide issues of liability and the apportionment of fault and, if fault is found, the amount of damages sustained by the insured.   If the arbitrator's award to the insured is less than or equal to the total amount collected by the insured by way of settlements or judgments plus the amount of any settlement offer made by the uninsured motorist carrier at least fifteen (15) days prior to the arbitration, the insured will pay the arbitrator's fee. In the event the arbitrator's award to the insured exceeds the total amount collected by the insured by way of settlements or judgments plus the amount of any settlement offer made by the uninsured motorist carrier at least fifteen (15) days prior to the arbitration, the uninsured motorist insurance carrier will pay the arbitrator's fee.     The uninsured motorist insurance carrier shall be entitled to credit for the total amount of damages collected by the insured from all parties alleged to be liable for the bodily injury or death of the insured whether obtained by settlement or judgment and whether characterized as compensatory or punitive damages.   Nothing contained in this section shall prohibit or preclude the uninsured motorist insurance carrier and the insured or the insured's personal representative from settling the insured's uninsured motorist claim at any time and upon terms and conditions acceptable to the parties.   Notwithstanding the provisions of this section relating to binding arbitration, after receipt of both of the notices referred to in subdivisions (g)(2) and (3), the uninsured motorist insurance carrier, at its option, may elect to decline binding arbitration and preserve its subrogation rights; provided, that within thirty (30) days after receipt of both of the notices, it pays the insured the full amount of the offer made by the liability insurance company or companies providing coverage to the party or parties seeking the release. Acceptance of the amount by the insured shall not operate as a release of the liability insurance carrier's insureds, nor shall it prevent or preclude the insured from seeking additional compensation from the insured's uninsured motorist insurance carrier. Upon acceptance by the insured, the uninsured motorist insurance carrier shall be subrogated to the extent of its payment and further subrogated to the extent it is required to make further payments of compensatory damages under the uninsured motorist coverage of its policy. Upon final disposition of the case, the liability insurance carrier or carrier, shall reimburse the uninsured motorist insurance carrier in the amount of policy limits applicable to the defendant or defendants on whose behalf the offer was made or in the amount of the judgment rendered against the defendant or defendants, whichever is less. In the event the judgment is in favor of the defendant or defendants, the uninsured motorist insurance carrier shall not be entitled to reimbursement for any amounts paid its insured pursuant to this subsection (k). In the event the judgment exceeds the liability insurance coverage available to the defendant or defendants, the uninsured motorist insurance carrier shall be subrogated against the defendant or defendants to the extent of payments it is required to make in excess of the liability insurance coverage. The uninsured motorist insurance carrier shall be entitled to credit for the total amount of damages collected by the insured from all parties alleged to be liable for the bodily injury or death of the insured whether obtained by settlement or judgment and whether characterized as compensatory or punitive damages.   
  As used in this part:  Nonpayment of premium means failure of the named insured to discharge when due any obligations in connection with the payment of premiums on a policy of automobile liability insurance or any installment of the premium, whether the premium is payable directly to the insurer or its agent or indirectly under any premium finance plan or extension of credit; and   Private passenger automobile liability insurance policy means a policy delivered or issued for delivery in this state, insuring a natural person as named insured, or one (1) or more related individuals resident of the same household, and under which the insured vehicles therein designated are of the following types only:  A motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance for passengers, nor rented to others; or   Any other four (4) wheel motor vehicle with a load capacity of one thousand five hundred pounds (1,500 lbs.) or less that is not used in the occupation, profession or business of the insured, other than driving to and from the insured's place of employment or used in the occupation of farming.       This part does not apply to:  Policies of automobile liability insurance issued under an automobile assigned risk plan;   Any policy insuring more than four (4) automobiles;   Any policy covering garage, automobile sales agency, repair shop, service station or public parking place operation hazards; or   Any policy of insurance issued principally to cover personal or premises liability of an insured even though the insurance may also provide some incidental coverage for liability arising out of the ownership, maintenance or use of a motor vehicle on the premises of the insured or on the ways immediately adjoining the premises.     This part applies only to that portion of an automobile liability policy insuring against bodily injury and property damage liability and to the provisions in the policy, if any, relating to medical payments and/or uninsured motorist coverage.   
  Every private passenger automobile liability insurance policy shall be subject to this part.   Unless the policy has been in effect less than sixty (60) days at the time notice of cancellation is mailed, and it is not a renewal policy, the company shall not exercise its right to cancel the insurance afforded in the policy unless the cancellation is based on one (1) or more of the following reasons:  Nonpayment of premium;    The policy was obtained through a material misrepresentation;   The named insured failed to disclose fully the insured's motor vehicle accidents and moving traffic violations for the preceding thirty-six (36) months if called for in the application; or   The named insured failed to disclose in the written application or in response to inquiry by the insured's broker or by the insurer or its agent information necessary for the acceptance or proper rating of the risk;      Any insured violated any of the terms or conditions of the policy;   Any insured made a false or fraudulent claim or knowingly aided or abetted another in the presentation of a false or fraudulent claim; or   If, after the effective date of the insurance, the policy is extended, with or without charge, to provide coverage for the operation of an automobile by a person or persons not listed on the original application, or a supplement to the application, the company shall be allowed sixty (60) days, after written request to the company for insurance on the driver or drivers, to accept or reject the additional risk and, if the additional risk is not acceptable to the company, the policy may be cancelled; provided, that notice shall be mailed within sixty (60) days from the date of the request;     The named insured or any other operator, either resident in the same household, or who customarily operates an automobile insured under the policy:  Has had a driver's license or motor vehicle registration suspended or revoked within the thirty-six (36) months prior to notice of cancellation;   Is or becomes subject to epilepsy or heart attacks, and cannot produce a certificate from a physician testifying to the person's unqualified ability to operate a motor vehicle; or   Is or has been convicted of or forfeits bail, during the thirty-six (36) months immediately preceding the effective date of the policy or during the policy period, for:   Any felony;   Criminal negligence resulting in death, homicide or assault, arising out of the operation of a motor vehicle;   Operating a motor vehicle while in an intoxicated condition or while under the influence of drugs;   Leaving the scene of an accident without stopping to report;   Theft of a motor vehicle;   Making false statements in an application for a driver license; or   A third violation, committed within a period of thirty-six (36) months, of:  Any ordinance, law or regulation limiting the speed of motor vehicles; or   Any of the motor vehicle laws of any state, the violation of which constitutes a misdemeanor, whether or not the violations were repetitions of the same offense or were different offenses; or         The insured automobile is:  Altered so as to increase the risk substantially;   Used as an authorized emergency vehicle; or   Subject to an inspection law and has not been inspected or, if inspected, has failed to qualify.       No automobile liability insurance policy may be cancelled solely because the driver was involved in a collision not adjudicated the driver's fault.   
   No notice of cancellation of a policy shall be effective unless mailed or delivered by the insurer, its authorized agent or employee, to the named insured as shown in the policy declarations at the address shown in the declarations, stating when not less than twenty (20) days thereafter the cancellation shall be effective; provided, the policy may be cancelled by the company by mailing to the insured written notice stating when not less than ten (10) days thereafter the cancellation shall be effective, if:  The cancellation is due to nonpayment of premium; or   The policy has been in effect less than sixty (60) days and is not a renewal policy.     The mailing of the notice shall be sufficient proof of notice.   The effective date and hour of cancellation stated in the notice shall become the end of the policy period, unless the insured surrenders the policy and requests cancellation prior to the date and hour specified in the cancellation notice.   Delivery of the written notice either by the insured or by the company shall be equivalent to mailing.      If the reason or reasons for cancellation are not included in the notice of cancellation, then at the written request of the named insured, mailed or delivered to the insurer not later than fifteen (15) days subsequent to the effective date of cancellation, the insurer shall specify any and all reasons for the cancellation. This subdivision (b)(1) only applies to policies that have been in force sixty (60) days beyond the initial effective date.   Every renewal policy shall be presumed to be in effect for at least sixty (60) days. Any notice of cancellation shall advise the insured that the insured may request the reasons for cancellation by written request mailed or delivered to the insurer not later than fifteen (15) days subsequent to the effective date of cancellation.     There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer, its authorized representative, its agents, its employees, or any firm, person or corporation furnishing to the insurer information as to the reason for cancellation, for any statement made by any of them in any written notice of cancellation, for the providing of information pertaining to the cancellation, or for statements made or evidence submitted at any hearings conducted in connection with the cancellation.   
  Nothing in this part applies to nonrenewal, except that in the event the company does not intend to renew the contract, it shall mail or deliver to the named insured, at the address shown in the policy, not less than thirty (30) days' notice of its intention not to renew. Proof of mailing of notice shall be sufficient proof of notice.   Unless the nonrenewal notice contains a reason for the nonrenewal action, the notice shall advise the insured that upon written request of the named insured, mailed or delivered to the insurer not later than fifteen (15) days after the effective date of the nonrenewal, the insurer will within twenty (20) days mail to the named insured a written statement specifying a reason for the nonrenewal action. There shall be no liability on the part of and no cause of action of any nature shall arise against any insurer, its authorized representative, its agents, its employees, or against any firm, person or corporation furnishing information to the insurer, as to reason for nonrenewal.   
 When a policy of automobile liability insurance is cancelled, other than for nonpayment of premium, or in the event of failure to renew a policy of automobile liability insurance, the insurer shall notify the named insured of the insured's possible eligibility for automobile liability insurance through the automobile liability assigned risk plan. The notice shall accompany or be included in the notice of cancellation or the notice of intent not to renew.  
 This part shall be known and may be cited as the Medicare Supplemental Insurance Protection Act of 1988.  
 The purpose of this part is to:   Promote the public interest;   Protect potential buyers of medicare supplement insurance; and   Protect the elderly from unscrupulous agents and companies.   
  The requirements of this part apply to policies delivered or issued for delivery in the state on or after January 1, 1989.   This part is not intended to supersede the obligations of entities subject to this part, to comply with the substance of other applicable insurance laws, insofar as they do not conflict with this part.   
 With respect to any policy of medicare supplement insurance in a replacement transaction, as the term has been defined by the commissioner, the following are unfair or deceptive acts and shall be sanctioned as provided in chapter 8 of this title:   In the case of any insurer, failing to provide an unconditional refund offer of at least thirty (30) days from the date of delivery of the policy;   In the case of any insurer, failing to send any notice required by statute or rule to an existing insurer; or   In the case of replacement of a medicare supplement insurance policy, failing to give notice to an applicant for medicare supplement insurance of the adverse consequences that may result from surrendering an existing insurance policy prior to the determination of insurability by the replacing insurer. The notice shall be in the form prescribed by the commissioner, and receipt of the notice shall be acknowledged by signature of the applicant. A copy of the signed notice shall be provided to the existing insurer in accordance with rules adopted by the commissioner.   
   An insurance company or agent that commits an unfair or deceptive act in the sale or offering for sale or administration of medicare supplement insurance shall be subject to the Consumer Protection Act, compiled in title 47, chapter 18, part 1, except for  47-18-106  47-18-108, the second sentence of  47-18-115, and the following language from  47-18-113(a):  provided, that this part shall not alter, amend, or repeal the provisions of the Uniform Commercial Code relative to express or implied warranties or the exclusion or modification of such warranties.    However, nothing in this part shall require or authorize the consumer affairs division to duplicate the services being provided or the regulatory authority being exercised by the insurance division of the department.     In the sale, offering for sale or administration of medicare supplement insurance, unfair or deceptive acts include, but are not limited to:  In the case of the insurance agent:  Misrepresenting the terms of the policy;   Inaccurately filling out an insurance application when the agent knows or has reason to know it is inaccurate;   Failing to comply with all requirements of this part;   Knowingly selling duplicative policies to a policyholder without an increase in benefits, which includes a requirement that the policies pay to the full extent of benefits notwithstanding the existence of other coverage;   Knowingly selling a medicare supplement insurance policy to someone who receives medicaid, unless the applicant represents in writing to the agent that the applicant has a reasonable expectation of losing medicaid coverage due to an increase in income or resources or a change in living situation. The insurance agent or company must promptly notify the department and give the name and address of those individuals who have purchased a policy in conjunction with medicaid;   Selling a medicare supplement insurance policy to someone who already has a medicare supplement insurance policy, unless the new policy covers preexisting conditions to the extent of the existing policy immediately or within the time limits of the existing policy; and   Selling a medicare supplement insurance policy to someone who already has a medicare supplement insurance policy, unless the policy provides for an increase in benefits or a decrease in premiums or is to replace a policy where the applicant is not satisfied with the service received; and     In the case of a company:  Failing to ask in the application whether the applicant receives medicaid. In the case of direct response insurers, the question may be asked in a supplement to the application;   Failing to ask in the application whether the applicant has a medicare supplement insurance policy. In the case of direct response insurers, the question may be asked in a supplement to the application;   Encouraging agents to:   Sell duplicative or replacement policies that are in violation of this part or rules promulgated under this part;   Commit unfair or deceptive acts; or   Both;     Using advertising or outlines of coverage, or both, that have not been filed with the department in accordance with its rules and regulations or that have been disapproved by the department in accordance with the rules; and   Failing to comply with all requirements of this part.       
 The requirements in the amendments and enactments in this part in  56-7-1405(b)(1)(D)-(G) and (b)(2)(A) and (B) are not applicable to the issuance and delivery of group medicare supplement insurance.  
  Every insurer, health care service plan, or other entity providing medicare supplement insurance or benefits in this state shall provide a copy of any medicare supplement advertisement intended for use in this state whether through written, radio or television medium to the commissioner for review or approval by the commissioner pursuant to rules promulgated pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   The rules shall set forth standards for the format and content of medicare supplement insurance advertising, which advertising shall be sufficiently complete, clear, and unambiguous to avoid deception or the capacity or tendency to mislead or deceive. In setting standards, the commissioner shall consider the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.   
 As used in this part, unless the context otherwise requires:   Applicant means:  In the case of an individual medicare supplement policy, the person who seeks to contract for insurance benefits; and   In the case of a group medicare supplement policy, the proposed certificate holder;     Certificate means, any certificate delivered or issued for delivery in this state under a group medicare supplement policy;   Certificate form means the form on which the certificate is delivered or issued for delivery by the issuer;   Issuer includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in this state medicare supplement policies or certificates;   Medicare means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965;   Medicare supplement policy means a group or individual policy of accident and sickness insurance or a subscriber contract of hospital and medical service associations or health maintenance organizations other than a policy issued pursuant to a contract under  1876 [repealed] of the Social Security Act (42 U.S.C.  1395 et seq.), or an issued policy under a demonstration project specified in 42 U.S.C.  1395ss(g)(1) that is advertised, marketed or designed primarily as a supplement to reimbursements under medicare for the hospital, medical or surgical expenses of persons eligible for medicare; and   Policy form means the form on which the policy is delivered or issued for delivery by the issuer.   
  Except as otherwise specifically provided, this part applies to:  All medicare supplement policies delivered or issued for delivery in this state on or after July 1, 1992; and   All certificates issued under group medicare supplement policies, which certificates have been delivered or issued for delivery in this state.     This part does not apply to a policy of one (1) or more employers or labor organizations, or of the trustees of a fund established by one (1) or more employers or labor organizations, or combination of employers and labor organizations, for employees or former employees, or a combination of employees and former employees, or for members or former members, or a combination of members and former members, of the labor organizations.   Except as otherwise specifically provided in  56-7-1505(d), this part is not intended to prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to medicare eligible persons, which policies are not marketed or held to be medicare supplement policies or benefit plans.   
  No medicare supplement policy or certificate in force in this state shall contain benefits that duplicate benefits provided by medicare.   Notwithstanding any other law to the contrary, a medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six (6) months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six (6) months before the effective date of coverage.   The commissioner shall promulgate reasonable rules and regulations to establish specific standards for policy provisions of medicare supplement policies and certificates. The standards shall be in addition to and in accordance with applicable laws of this state, including chapter 26 of this title. No requirement of this title relating to minimum required policy benefits, other than the minimum standards contained in this part, shall apply to medicare supplement policies and certificates. The standards may cover, but are not limited to:  Terms of renewability;   Initial and subsequent conditions of eligibility;   Nonduplication of coverage;   Probationary periods;   Benefits limitations, exceptions and reductions;   Elimination periods;   Requirements for replacement;   Recurrent conditions; and   Definitions of terms.     The commissioner shall promulgate reasonable rules and regulations to establish minimum standards for benefits, claims payment, marketing practices and compensation arrangements and reporting practices for medicare supplement policies and certificates.   The commissioner may promulgate, from time to time, reasonable rules and regulations necessary to conform medicare supplement policies and certificates to the requirements of federal law and regulations promulgated under federal law, including, but not limited to:  Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements;   Establishing a uniform methodology for calculating and reporting loss ratios;   Assuring public access to policies, premiums and loss ratio information of issuers of medicare supplement insurance;   Establishing a process for approving or disapproving policy forms and certificate forms and proposed premium increases;   Establishing a policy for holding public hearings prior to approval of premium increases; and   Establishing standards for medicare select policies and certificates.     The commissioner shall promulgate reasonable rules and regulations that specify prohibited policy provisions not otherwise specifically authorized by statute that, in the opinion of the commissioner, are unjust, unfair or unfairly discriminatory to any person insured or proposed to be insured under a medicare supplement policy or certificate.     Insurers offering medicare supplement policies and certificates in this state to persons sixty-five (65) years of age or older shall also offer medicare supplement policies to persons in this state who are under sixty-five (65) years of age and eligible for and enrolled in medicare by reason of disability or end stage renal disease. Except as otherwise provided in this section, all benefits, protections, policies, and procedures that apply to persons sixty-five (65) years of age or older shall also apply to persons that are eligible for and enrolled in medicare by reason of disability or end stage renal disease.   Individuals who are under sixty-five (65) years of age and eligible for medicare by reason of disability or end stage renal disease may enroll in a medicare supplement policy at any time authorized or required by the federal government, or within six (6) months after:   Enrolling in medicare part B, or by January 1, 2011, whichever is later;   The date of the notice that such person has been retroactively enrolled in medicare part B due to a retroactive eligibility decision made by the social security administration;   No longer having access to alternative forms of health insurance coverage such as accident and sickness policies, employer-sponsored group health coverage or medicare advantage plans due to termination or cancellation of such coverage because of the individual's employment status, or an action by a health insurer or employer that is unrelated to the individual's status, conduct or failure to pay premiums; or   Being involuntarily disenrolled from Title XIX (medicaid) or Title XXI (state children's health insurance program) of the Social Security Act (42 U.S.C.  1396 et seq. and 42 U.S.C.  1397aa et seq., respectively).     Premium rates for medicare supplement policies and certificates issued pursuant to this subsection (g) may differ between persons who qualify for medicare who are sixty-five (65) years of age or older and those who qualify for medicare by reason of disability or end stage renal disease and who are younger than sixty-five (65) years of age; provided, however, that such differences in premium rates are pursuant to rate schedules that are based on sound actuarial principles and are reasonable in relation to the benefits provided.     Upon the expiration of five (5) years from May 27, 2010, the department of commerce and insurance shall conduct a study for the purpose of determining the appropriateness of separate premium rating for populations under sixty-five (65) years of age and such study, at a minimum, shall evaluate whether continued separate premium rating is justified in comparison to any negative rating impact or increased cost in premium that would occur to the medicare supplement insurance population taken as a whole if such separate premium rating were not allowed. The cost of any such study shall be borne by the department within the existing resources of the department at the time of the study.     
 Medicare supplement policies shall return to policyholders benefits that are reasonable in relation to the premium charged. The commissioner shall promulgate reasonable rules and regulations to establish minimum standards for loss ratios of medicare supplement policies on the basis of incurred claims experience, or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums in accordance with accepted actuarial principles and practices. Every entity providing medicare supplement policies and certificates in this state shall file annually its rates, rating schedule, and supporting documentation demonstrating that it is in compliance with the applicable loss ratio standards of this state. All filings of rates and rating schedules shall demonstrate that the actual and expected losses in relation to premiums comply with the requirements of this part.  
  In order to provide for full and fair disclosure in the sale of medicare supplement policies, no medicare supplement policy or certificate shall be delivered in this state unless an outline of coverage is delivered to the applicant upon request, but no later than when the agent first discusses the policy's provisions or limits of coverage with the applicant. In the case of direct response solicitation, the insurer shall include the outline of coverage when an application is distributed to the potential buyer.   The commissioner shall by rule or regulation prescribe the format and content of the outline of coverage required by subsection (a). For purposes of this section, format means style, arrangements and overall appearance, including such items as the size, color and prominence of type and arrangement of text and captions. The outline of coverage shall include:  A description of the principal benefits and coverage provided in the policy;   A statement of the renewal provisions, including any reservation by the issuer of a right to change premiums, and disclosure of the existence of any automatic renewal premium increases based on the policyholder's age; and   A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions.     The commissioner shall prescribe by rule or regulation a standard form and the contents of an informational brochure for persons eligible for medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of medicare. Except in the case of direct response insurance policies, the commissioner may require by regulation that the informational brochure be provided to any prospective insureds eligible for medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the commissioner may require by regulation that the prescribed brochure be provided upon request to any prospective insureds eligible for medicare but in no event later than the time of policy delivery.   The commissioner shall promulgate rules and regulations for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not medicare supplement coverages, for all accident and sickness insurance policies sold to persons eligible for medicare other than:  Medicare supplement policies; or   Disability income policies.     The commissioner shall promulgate reasonable rules and regulations to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts or certificates by persons eligible for medicare.   
 Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or certificate, or attached to the policy or certificate, stating in substance that the applicant has the right to return the policy or certificate within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. The insurer shall mail the refund directly to the applicant in a timely manner and shall not require the applicant to meet with the agent to receive the refund.  
 Every issuer of medicare supplement insurance policies or certificates in this state shall provide a copy of any medicare supplement advertisement intended for use in this state whether through written, radio or television medium to the commissioner for review or approval by the commissioner. The commissioner shall promulgate reasonable rules and regulations to implement this section.  
 Regulations adopted pursuant to this part are subject to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 In addition to any other applicable penalties for violations set out in this title, the commissioner may require issuers violating this part or rules or regulations promulgated pursuant to this part to cease marketing any medicare supplement policy or certificate in this state that is related directly or indirectly to a violation, or may require the issuer to take actions necessary to comply with this part or both.  
 This part shall be known and may be cited as the Easy to Read Life and Health Insurance Policy Act.  
  The purpose of this part is to establish minimum standards for language used in policies, contracts and certificates of life insurance, health insurance, credit life insurance and credit health insurance delivered or issued for delivery in this state to facilitate ease of reading by persons insured under the policies.    This part is not intended to increase the risk assumed by insurance companies or other entities subject to this part or to supersede their obligation to comply with the substance of other insurance legislation applicable to life, health, credit life or credit health insurance policies.   This part is not intended to impede flexibility and innovation in the development of policy forms or content or to lead to the standardization of policy forms or content.     
 As used in this part, unless the context otherwise requires:   Company or insurer means any life or health insurance company, fraternal benefit society, nonprofit health service corporation, nonprofit hospital service corporation, nonprofit medical service corporation, prepaid health plan, dental care plan, vision care plan, pharmaceutical plan, health maintenance organization, and all similar type organizations; and   Policy or policy form means:  Any policy, contract, plan or agreement of life or health insurance, including credit life insurance and credit health insurance, delivered or issued for delivery in this state by any company subject to this part;   Any certificate, contract or policy issued by a fraternal benefit society; and   Any certificate issued pursuant to a group insurance policy delivered or issued for delivery in this state.     
  This part applies to all policies delivered or issued for delivery in this state by any company on or after the date the forms are subject to this part, but nothing in this part applies to:  Any policy that is a security subject to federal jurisdiction;   Any group policy covering a group of one thousand (1,000) or more lives at date of issue, other than a group credit life insurance policy or a group credit health insurance policy; provided, that this subsection (a) shall not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;   Any group annuity contract that serves as a funding vehicle for pension, profit-sharing, or deferred compensation plans;   Any form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for, a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates the forms must be approved under this part; or   The renewal of a policy delivered or issued for delivery prior to the dates the forms must be approved under this part.     No other statute of this state setting language simplification standards shall apply to any policy forms.   Any non-English language policy delivered or issued for delivery in this state shall be deemed to be in compliance with  56-7-1605(a)(1) if the insurer certifies that the policy is translated from an English language policy that does comply with  56-7-1605(a)(1).   
  In addition to any other requirements of law, no policy forms, except as stated in  56-7-1604, shall be delivered or issued for delivery in this state on or after the dates the forms are subject to this part, unless:  The text achieves a minimum score of forty (40) on the Flesch reading ease test or an equivalent score on any other comparable test as provided in subsection (d);   It is printed, except for specification pages, schedules and tables, in not less than ten-point type, one (1) point leaded;   The style, arrangement and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and   It contains a table of contents or an index of the principal sections of the policy, if the policy has more than three thousand (3,000) words printed on three (3) or fewer pages of text, or if the policy has more than three (3) pages regardless of the number of words.     For the purposes of this section, a Flesch reading ease test score shall be measured by the following method:  For policy forms containing ten thousand (10,000) words or less of text, the entire form shall be analyzed. For policy forms containing more than ten thousand (10,000) words, the readability of two hundred (200) word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least twenty (20) printed lines;   The number of words and sentences in the text shall be counted and the total number of words divided by the total number of sentences. The figure obtained shall be multiplied by a factor of 1.015;   The total number of syllables shall be counted and divided by the total number of words. The figure obtained shall be multiplied by a factor of 84.6;   The sum of the figures computed under subdivisions (b)(2) and (3) subtracted from 206.835 equals the Flesch reading ease score for the policy form;   For purposes of subdivisions (b)(2)-(4), the following procedures shall be used:  A contraction, hyphenated word, or numbers and letters, when separated by spaces, shall be counted as one (1) word;   A unit of words ending with a period, semicolon, or colon, but excluding heading and captions, shall be counted as a sentence; and   Syllable means a unit of spoken language consisting of one (1) or more letters of a word as divided by an accepted dictionary. Where the dictionary shows two (2) or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.       Text, as used in this section, includes all printed matter except the following:  The name and address of the insurer; the name, number or title of the policy; the table of contents or index; captions and subcaptions; specification pages, schedules or tables; and   Any policy language that is drafted to conform to the requirements of any federal law, regulation or agency interpretation; any policy language required by any collectively bargained agreement; any medical terminology; any words which are defined in the policy; and any policy language required by law or regulation; provided, that the insurer identifies the language or terminology excepted by this subsection (c) and certifies, in writing, that the language or terminology is entitled to be excepted by this subsection (c).     Any other reading test may be approved by the commissioner for use as an alternative to the Flesch reading ease test if it is comparable in result to the Flesch reading ease test.   Filings subject to this section shall be accompanied by a certificate signed by an officer of the insurer stating that it meets the minimum reading ease score on the test used or stating that the score is lower than the minimum required, but should be approved in accordance with  56-7-1607. To confirm the accuracy of any certification, the commissioner may require the submission of further information to verify the certification in question.   At the option of the insurer, riders, endorsements, applications, and other forms made a part of the policy may be scored as separate forms or as part of the policy with which they may be used.   
 Nothing in this part shall be construed to negate any law of this state permitting the issuance of any policy form after it has been on file for the time period specified.  
 The commissioner may authorize a lower score than the Flesch reading ease score required in  56-7-1605(a)(1) whenever, in the commissioner's sole discretion, the commissioner finds that a lower score:   Will provide a more accurate reflection of the readability of a policy form;   Is warranted by the nature of a particular policy form or type or class of policy forms; or   Is caused by certain policy language that is drafted to conform to the requirements of any state law, regulation or agency interpretation.   
 A policy for meeting the requirements of  56-7-1605(a) shall be approved, notwithstanding any other laws that specify the content of policies, if the policy form provides the policyholders and claimants protection not less favorable than they would be entitled to under such laws.  
 The commissioner has sole authority to enforce this part or seek remedies for its violation.  
 If a prepaid dental plan after May 3, 1983, offers group prepaid dental service for sale in this state, and the plan limits the provider dentists to designated dentists or groups of designated dentists, whether through regular dental insurance coverage, dental service plan coverage, or through a health maintenance organization or any other service plan organization, the employer or other entity that provides the plan for the benefit of its employees or members shall also offer to the employees or members, including their eligible dependents, the option of selecting alternative coverage that permits the covered persons to obtain dental services from any licensed dentist of their choice. In providing the alternative coverage, the employer or other entity shall pay for the dental benefits to the same extent as provided in the plan, but in no event shall it be required to pay for or contribute towards the provision of alternative coverage an amount greater than the premium or cost it pays or contributes to under the plan.  
 Any prepaid dental plan that regularly provides benefits for obtaining a professional opinion of a dentist shall also provide equal benefits for obtaining a second professional opinion of a dentist regarding the same dental procedure or condition if it is requested by the person covered by the plan.  
 This part shall be known and may be cited as the Cancellation of Commercial Risk Insurance Act.  
 As used in this part, unless the context otherwise requires:    Commercial risk insurance means insurance within the scope of this part that is not personal risk insurance, as defined in  56-5-102, and subject to the exclusions set out in  56-5-101; and   Commercial risk insurance does not include fidelity and surety bonds, or insurance written by a surplus lines insurer; and     Nonpayment of premium means failure of the named insured to discharge when due any of its obligations in connection with the payment of premiums on a policy of commercial risk insurance or any installment of the premium, whether the premium is payable directly to the insurer or its agents or indirectly under any premium finance plan or extension of credit.   
 After a commercial risk insurance policy has been in effect for sixty (60) days, or, if the policy is a renewal, effective immediately, no notice of cancellation shall be effective unless it is based on the occurrence, after the effective date of the policy, of one (1) or more of the following:   Nonpayment of premium, including nonpayment of any additional premiums, calculated in accordance with the current rating manual of the insurer, justified by a physical change in the insured property or a change in its occupancy or use;   Conviction of the named insured of a crime having as one (1) of its necessary elements an act increasing any hazard insured against;   Discovery of fraud or material misrepresentation on the part of either of the following:  The insured or the insured's representative in obtaining the insurance; or   The named insured in pursuing a claim under the policy;     Failure to comply with written loss control recommendations;   Material change in the risk that increases the risk of loss after insurance coverage has been issued or renewed;   Determination by the commissioner that the continuation of the policy would jeopardize a company's solvency or would place the insurer in violation of the insurance laws of this state or any other state;   Violation or breach by the insured of any policy terms or conditions; or   Other reasons that are approved by the commissioner.   
  No notice of cancellation of a commercial risk insurance policy shall be effective unless mailed by the insurer, its authorized agent, or employee, to the named insured as shown in the policy declarations at the address shown in the declarations.   If the cancellation is due to any of the items set forth in  56-7-1803, or if the policy has been in effect less than sixty (60) days and is not a renewal policy, the cancellation shall be effective not less than ten (10) days after the date of mailing.   The mailing of notice shall be sufficient proof of notice. The effective date and hour of cancellation stated in the notice shall become the end of the policy period unless the insured shall surrender the policy and request cancellation prior to the date and hour specified in the cancellation notice.   Delivery of the written notice either by the agent or by the company shall be the equivalent of mailing.   All notices of cancellation shall state which of the grounds set forth in  56-7-1803 are relied upon, and that upon written request of the named insured, the insurer shall furnish the facts on which the cancellation is based.   There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer, its authorized representative, its agents, its employees, or any firm, person or corporation furnishing to the insurer information as to the reason for cancellation, for any statement made by any of them in any written notice of cancellation, for the providing of information pertaining to the cancellation, or for statements made or evidence submitted at any hearings conducted in connection with the cancellation.   
  Unless the insurer, at least sixty (60) days in advance of the end of the policy period, mails or delivers to the named insured and agent at the address shown in the policy, notice of its intention not to renew the commercial risk policy or to condition its renewal on reduction of limits or elimination of coverages, the insurer is required to extend the existing policy sixty (60) days from the date the notice is provided. The premium for the policy provided in those circumstances shall be no more than a pro rata basis of the existing policy. Any commercial risk policy written for a term of less than one (1) year shall be considered as if written for a term of one (1) year. Any commercial risk policy written for a term longer than one (1) year, or any commercial risk policy with no fixed expiration date, shall be considered as if written for specific policy periods or terms of one (1) year.   Notice of nonrenewal is not required if:  The insurer has offered to issue a renewal policy; or   Where the named insured has obtained replacement coverage or has agreed in writing to obtain replacement coverage.     If an insurer provides the notice described in this section, and thereafter the insurer extends the policy for ninety (90) days or less, an additional notice of nonrenewal is not required with respect to the extension.   
  In the event an insurance company intends to increase the premiums of a commercial risk policy by an amount that is more than twenty-five percent (25%) and the increase in premium is the result of comparing policies of equivalent exposures, the insurance company shall mail or deliver to the named insured and producer at the address shown on the policy, not less than sixty (60) days prior notice of its intention to increase the premiums, specifying the percentage of the increase.   Unless notice is provided as described in subsection (a), the insurer is required to extend the existing policy sixty (60) days from the date the notice is provided.   The premium for the policy provided in those circumstances shall be not more than a pro rata basis of the existing policy.   
 Failure to comply with this part shall be considered to be an unfair trade practice under  56-8-104.  
  The commissioner may, after notice and hearing, promulgate rules and regulations to carry out this part.   The rulemaking authority includes the power to increase or decrease the time within which notice is required by this part.   
 Except as provided in  56-7-1304, if an insurance company does not intend to renew a contract of any kind of personal risk insurance identified in  56-5-102, the company shall mail or deliver to the named insured, at the address shown in the policy, notice of its intention not to renew at least thirty (30) days prior to the expiration of the policy.  
  Unless the nonrenewal notice contains a reason for the nonrenewal action, the notice shall advise the insured that upon written request of the named insured, mailed or delivered to the insurer not later than fifteen (15) days after the effective date of the nonrenewal, the insurer will within twenty (20) days mail to the named insured a written statement specifying a reason for the nonrenewal action.   There shall be no liability on the part of, and no cause of action of any nature shall arise against, any insurer, its authorized representative, its agents, its employees, or against any firm, person or corporation furnishing information to the insurer, as to the reason for nonrenewal.   
 On the death of an insured, any life insurance acquired by the insured or the insureds spouse and payable to the intestate insureds estate benefits the surviving spouse and children and the proceeds shall be divided between them according to the statutes of distribution without being in any manner subject to the debts of the decedent. If the proceeds of the insurance are payable to the estate of a testate decedent or the trustee of a revocable trust of which the decedent was a settlor, the proceeds shall pass as part of the estate or trust and under the dispositive provisions of the will or trust agreement, as ordinary cash, whether or not the will or trust agreement uses any apt or express words referring to the insurance proceeds, but the proceeds shall not be subject to the debts of the decedent unless specifically charged with the debts in the will or trust agreement.   Code 1858,  2478 (deriv. Acts 1845-1846, ch. 216,  3); Shan.,  4231; Code 1932,  8456; Acts 1969, ch. 233,  1; 1972, ch. 845,  1; 1976, ch. 668,  1; T.C.A. (orig. ed.),  56-1108; Acts 2007, ch. 8,  13.  
 Whenever a married person causes life insurance to be effected upon the person's spouse's life, it shall in no case be subject to the debts of the insured, but shall inure to the benefit of the surviving spouse and children, or surviving spouse or children, as the case may be; however, any life insurance proceeds payable to the testate estate shall pass under the dispositive provisions of the will, but shall not be subject to the debts of the deceased spouse unless specifically charged with the debts in the will.   Code 1858,  2479 (deriv. Acts 1845-1846, ch. 216,  3); Shan.,  4232; mod. Code 1932,  8457; Acts 1969, ch. 234,  1; T.C.A. (orig. ed.),  56-1109.  
 The net amount payable under any policy of life insurance or under any annuity contract upon the life of any person made for the benefit of, or assigned to, the spouse and/or children, or dependent relatives of the persons, shall be exempt from all claims of the creditors of the person arising out of or based upon any obligation created after January 1, 1932, whether or not the right to change the named beneficiary is reserved by or permitted to that person.  
  Whenever the insured in a life insurance policy owned by the insured has reserved to the insured the right to change the beneficiary under the policy, the insured has the right to and may assign the policy, to the extent and in the manner permitted by the terms of the policy, as security for a loan, or for any other purpose, without the beneficiary joining in the assignment or assenting to the assignment, and the rights and interests of the beneficiary, including a spouse or child of the insured, in the policy or its proceeds, shall be subject and subordinate to the rights and interests of the assignee as created and defined by the assignment.    Nothing in this section or any other law shall be construed as prohibiting any person insured under a group insurance policy, pursuant to the terms of the policy or an arrangement among the insured, the group policyholder and the insurer, from making to any person an assignment of the rights and benefits conferred on the insured by any provision of the policy or by law, including, but not limited to, the right to have issued to the insured an individual policy arising from conversion as set forth in  56-7-2305 or otherwise and the right to name a beneficiary.   Any assignment permitted in this section, whether made before or after May 7, 1969, is valid for the purpose of vesting in the assignee all the rights and benefits assigned, and shall entitle the insurer to deal with the assignee as the owner of all rights and benefits conferred on the insured under the policy, in accordance with the terms of the assignment without prejudice to the insurer on account of any payment it may make or any individual policy it may issue arising from conversion prior to receipt at its home office of notice of the assignment.   This section acknowledges, declares and codifies the existing right of assignment of interests under life insurance policies.    When a policy of life insurance is assigned in writing as security for an indebtedness after May 8, 1992, upon receipt of a written request signed by the assignee, together with a copy of the assignment, the insurer shall mail to the assignee a copy of each lapse notice and late payment offer routinely mailed to the policyholder. The insurer shall mail the notice copies while the assignment remains in effect.   Subdivision (b)(4)(A) does not apply to any policy where the premium is paid weekly, monthly or quarterly. Subdivision (b)(4)(A) does not apply to industrial life or group life policies. Failure of an insurer to comply with subdivision (b)(4)(A) shall not result in the incurrence of any liability by or obligation on the part of the insurer, which liability or obligation would not be present under the terms of the policy in the absence of any assignment of the policy.   Nothing in this section shall be construed as requiring any notice to a policyholder not already required by contract or law.       
  A life insurance company may not accept additional payments under policy provisions that permit deposits to be made in funds that are ancillary to the basic benefits and that are established for the payment of future premiums on individual life policies or annuity contracts, or for the purchase of annuity benefits under the policies or contracts at a future date, unless it meets the following conditions and limitations:   In the case of life insurance policies, the maximum amount that may be held by the insurer at any time in the funds is the lesser of:   The total amount of the next ten (10) annual premiums payable; or   The difference between the greater of the sum assured or the guaranteed maturity value and the cash value; or     In the case of annuity contracts, the maximum amount that may be held by the insurer at any time in the funds is five (5) times the maximum annual amount that may be deposited in the funds as specified in subdivision (a)(2);     For both life insurance policies and annuity contracts, the maximum amount that may be deposited in the funds in any one (1) year is two (2) annual premiums currently payable under the policy, or in the case of policies or contracts under which premiums may vary in amount, twice the average amount of annual premiums paid under the policy or contract during the previous five (5) years or the number of years for which the policy or contract has been in force, if fewer than five (5) years;   If the insurer guarantees interest rates on the funds in excess of the interest rate permitted for the valuation of annuities and pure endowments, additional reserves in respect of the interest guarantees may be required, based on requirements determined by the commissioner;   Unpaid premiums under life insurance policies shall be automatically paid from the deposit fund, unless the policy provides that any automatic premium loan provision shall first become effective;   The funds shall be payable upon death or other termination of the policy or contract;   Provisions may be included to allow policy owners to withdraw the funds subject to the condition that the policy provision reserves to the insurer the right to defer payment for six (6) months;   Any projections of these funds at current interest rates that may be used must be clearly identified as current rate projections, and the current rate projections are restricted to the same policy periods or attained ages as projections made at guaranteed interest rates. Projections at interest rates in excess of the rates guaranteed may not be made for any attained ages greater than sixty-five (65) years of age;   Sales promotion literature and contract forms shall not in any way create the impression that the funds are the same as a savings account or deposit in a bank or savings institution and the use of passbooks that bear any resemblance to savings bank passbooks or similar items is prohibited; and    The limitations in subdivisions (a)(1) and (2) shall not apply to:   A single payment equal to the discounted value of specific premiums paid in advance; and   A policyholder's deposit account established primarily as a premium payment facility, unless the total amount in the account exceeds twice the sum of the annual premiums payable on all policies for which premiums are being paid from the account;       The limitations in subdivision (a)(1) shall not apply to a policyholder's deposit account if a penalty is imposed upon the policyholder on funds withdrawn in cash, the penalty to be imposed only when total funds withdrawn exceed an amount equal to the limitations in subdivision (a)(1), the penalty to be equal to interest earnings in excess of the guaranteed rate on the amount of policyholder's withdrawal during the six-month period immediately preceding policyholder's withdrawal request; provided, that the penalty shall be waived by the insurer:  During the thirty-day period immediately following each three-year policy period from the effective date of the policy; and   At any time after the insured attains sixty (60) years of age;     The penalty shall not be applicable to payment upon death or termination of the policy or contract.         This section shall not apply:  Except for subdivisions (a)(3), (7) and (8), to policies or contracts issued under pension or profit-sharing plans, including plans that cover self-employed individuals and owner-employees, that qualify for special tax treatment under the Internal Revenue Code, compiled in 26 U.S.C., and are regulated by the Employee Retirement Income Security Act of 1974 (29 U.S.C.  1001, et seq.);   Except for subdivisions (a)(3), (7) and (8), to policies or contracts issued in connection with individual retirement accounts, as defined in the Internal Revenue Code;   Except for subdivisions (a)(3), (7) and (8), to annuity contracts purchased by public schools, religious, charitable or other similar organizations; or   To variable annuities.     
 In the case of any life insurance policy with a value of fifteen thousand dollars ($15,000) or less, proof of death may be furnished by submission of a photocopy of the certificate of death, accompanied by a sworn statement by the doctor who signed the certificate or the funeral director who conducted burial services that the certificate is authentic.  
  No insurance company that has been qualified and authorized to do business in this state, pursuant to chapter 2 of this title, shall refuse to issue or deliver any policy of life insurance authorized under chapter 2 of this title, solely by reason of the fact that the person to be insured possesses sickle cell trait or hemoglobin C trait.   As used in this section:  Hemoglobin C trait means the condition wherein the major natural hemoglobin components present in the blood of the individual are hemoglobin A (normal) and hemoglobin C as defined by standard chemical and physical analytic techniques, including electrophoresis; and the proportion of hemoglobin A is greater than the proportion of hemoglobin C or one (1) natural parent of the individual is shown to have only normal hemoglobin components (hemoglobin A, hemoglobin A2, hemoglobin F) in the normal proportions by standard chemical and physical analytic tests; and   Sickle cell trait means the condition wherein the major natural hemoglobin components present in the blood of the individual are hemoglobin A (normal) and hemoglobin S (sickle hemoglobin) as defined by standard chemical and physical analytic techniques, including electrophoresis; and the proportion of hemoglobin A is greater than the proportion of hemoglobin S or one (1) natural parent of the individual is shown to have only normal hemoglobin components (hemoglobin A, hemoglobin A2, hemoglobin F) in the normal proportions by standard chemical and physical analytic tests.     
 This part shall be known and may be cited as the Memphis Plan Act of 1991.  
 The general assembly finds that there is a problem with availability and affordability of health care services for lower income persons. It is, therefore, the intent of this general assembly to make coverage more available and affordable by authorizing the development of innovative plans to prepay the coverage.  
 A plan that provides health care services to low income individuals on a prepaid basis shall not be deemed to be insurance within  56-7-101, or a service plan or corporation or health maintenance organization within Chapters 27 32 of this title, or any other provision of this title; provided, that the plan meets the following conditions:   Eligibility in the plan is limited to persons employed in businesses employing two hundred (200) eligible persons or fewer and persons engaged in domestic service in private households and dependents of those persons, where the persons earn less than two hundred percent (200%) of the federal poverty level and are not covered under any other group insurance arrangement;   The plan is operated on a not-for-profit basis under the sponsorship of a not-for-profit organization;   Covered primary care services are provided to enrollees either by providers on staff of the sponsoring organization or by volunteers recruited from a local medical society who have, in both instances, agreed to provide their services for free or for nominal reimbursement for out-of-pocket expenses and/or expendable supplies directly related to, and incurred as a result of, the service provided to the enrollee;   Payments to outside contractors for marketing, claims administration and similar services total no more than ten percent (10%) of the total charges;   The plan has received the approval and endorsement of the local medical society in consultation with the Tennessee Medical Association;   Except as provided in subdivision (3), no portion of any fees or charges under the plan shall be paid directly or indirectly as salary to any officer or director of the sponsoring not-for-profit corporation; and   The sponsoring not-for-profit corporation files an annual report with the commissioner within ninety (90) days of the close of the corporation's fiscal year that includes, at a minimum, the following information:  The number of plan enrollees;   Total services rendered under the plan;   Plan financial statements;   Administrative costs and salaries paid by the plan; and   Other information that may be reasonably requested by the commissioner.     
 Coverage made available under the plan shall constitute minimum essential health coverage for purposes of compliance with 26 U.S.C.  5000A.  
 Operation consistent with the standards described in  56-7-2003 shall create a presumption that the operating entity satisfies the requirements of 26 U.S.C.  5000A(d)(2)(B)(ii).  
 As used in this part, pet means any domesticated animal normally maintained in or near the household of its owner.  
 Any insurer writing any coverage to which this title applies may offer group or individual policies or contracts that provide benefits for hospital and medical services for pets; provided, that these services are provided by a veterinarian licensed pursuant to title 63, chapter 12, or by the laws of any other state. The policy or contract may provide for exclusions or deductibles, or both.  
 All policies issued pursuant to this part shall clearly disclose on the face of the policy:   The annual premium for the policy; and   The benefits provided by the policy.   
 This part shall be known and may be cited as the Tennessee Small Employer Group Health Coverage Reform Act.  
 The purpose and intent of this part is to promote the availability of accident and health insurance coverage to small employers, to prevent abusive rating practices, to require disclosure of rating practices to purchasers, to establish rules for continuity of coverage for employers and covered individuals and to improve the efficiency and fairness of the small group accident and health insurance marketplace.  
 As used in this part, unless the context otherwise requires:   Actuarial certification means a written statement by a member of the American Academy of Actuaries or other individual acceptable to the commissioner that a small employer carrier is in compliance with  56-7-2207, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans;   Base premium rate means, for each class of business as to a rating period, the lowest premium rate charged or that could have been charged under a rating system for that class of business, by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage;   Board means the board of directors of the pool;   Carrier means any person that provides one (1) or more health benefit plans in this state, including a licensed insurance company, a prepaid hospital or medical service plan, a health maintenance organization (HMO) and a multiple employer welfare arrangement (MEWA);   Case characteristics means demographic or other objective characteristics of a small employer, as determined by a small employer carrier, that are considered by the small employer carrier in the determination of premium rates for the small employer, but does not mean claim experience, health status and duration of coverage since issue;   Class of business means all or a distinct grouping of small employers as shown on the records of a small employer carrier;   Dependent means the spouse or child of an eligible employee, subject to applicable terms of the health care plan covering the employee;   Eligible employee means an employee who works for a small employer on a full-time basis, with a normal work week of thirty (30) or more hours, including a sole proprietor, a partner or a partnership, or an independent contractor, if included as an employee under a health care plan of a small employer. Eligible employee does not include employees who work on a part-time, temporary, or substitute basis;    Health benefit plan means:   Any accident and health insurance policy or certificate;   Nonprofit hospital or medical service corporation contract;   Health, hospital or medical service corporation plan contract;   HMO subscriber contract;   Plan provided by a MEWA; or   Plan provided by another benefit arrangement, to the extent permitted by Employee Retirement Income Security Act (ERISA) (29 U.S.C.  1001 et seq.), subject to  56-7-2206.     Health benefit plan does not mean:   Accident only, specified disease only, fixed indemnity, credit or disability insurance;   Coverage or medicare services pursuant to contracts with the federal government;   Medicare supplement or long-term care insurance;   Dental only or vision only insurance;   Coverage issued as a supplement to liability insurance;   Insurance arising out of a workers' compensation or similar law;   Automobile medical payment insurance; or   Insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance;       Health group cooperative or cooperative means a private purchasing cooperative composed of small employers formed under this part;   Impaired insurer has the same meaning as in  56-12-203;   Index rate means, for each class of business as to a rating period for small employers with similar case characteristics, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate;   Late enrollee means an eligible employee or dependent who requests enrollment in a health benefit plan of a small employer following the initial enrollment period provided under the terms of the health benefit plan; provided, that the initial enrollment period shall be a period of at least thirty (30) days. However, an eligible employee or dependent shall not be considered a late enrollee if:  The individual:   Was covered under another employer health benefit plan at the time the individual was eligible to enroll;   Stated, at the time of the initial enrollment, that coverage under another employer health benefit plan was the reason for declining enrollment;   Has lost coverage under another employer health benefit plan as a result of termination of employment, the termination of the other plan's coverage, death of a spouse or divorce; and   Requests enrollment within thirty (30) days after termination of coverage provided under another employer health benefit plan;     The individual is employed by an employer that offers multiple health benefit plans and the individual elects a different plan during an open enrollment period; or   A court has ordered coverage be provided for a spouse or minor child under a covered employee's health benefit plan, and request for enrollment is made within thirty (30) days after issuance of the court order;     New business premium rate means, for each class of business as to a rating period, the lowest premium rate charged, offered or that could have been charged by a small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage;   Preexisting conditions provision means a policy provision that limits or excludes coverage for charges or expenses incurred during a specified period following the insured's effective date of coverage, for a condition that, during a specified period immediately preceding the effective date of coverage, had manifested itself in a manner that would cause an ordinarily prudent person to seek diagnosis, care or treatment, or for which medical advice, diagnosis, care or treatment was recommended or received as to that condition or as to pregnancy existing on the effective date of coverage;   Premium includes insurance premiums or other fees charged for a health benefit plan, including the costs of benefits paid or reimbursements made to or on behalf of persons covered by the plan;   Rating period means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect, as determined by the small employer carrier;   Small employer means any person actively engaged in business that, on at least fifty percent (50%) of its working days during the preceding year, employed no fewer than three (3) eligible employees and no more than twenty-five (25) eligible employees, the majority of whom are employed within this state; provided, however, that for purposes of participating in a health group cooperative, a small employer includes any person that, during the preceding year, employed no less than two (2) and no more than fifty (50) eligible employees and otherwise qualifies as a small employer pursuant to this subdivision (18). Small employer includes companies that are affiliated companies, as defined in  56-13-102, or that are eligible to file a combined tax return under the Internal Revenue Code (26 U.S.C.  1 et seq.). Except as otherwise provided, the provisions of this part that apply to a small employer shall continue to apply until the plan anniversary following the date the employer no longer meets the requirements of this section; and   Small employer carrier means any carrier that offers health benefit plans covering eligible employees of one (1) or more small employers.   
 For the purposes of this part, companies that are affiliated companies or that are eligible to file a consolidated tax return shall be treated as one (1) carrier, except that with respect to affiliated companies, all of which are in existence and affiliated on January 1, 1992, the group of affiliated companies is considered to be one (1) carrier only after one (1) member of the group transfers any small employer business to another member of the group, and except that any insurance company, hospital service plan or medical service plan that is an affiliate of an HMO located in this state or any HMO located in this state that is an affiliate of an insurance company, a health service corporation or a medical service corporation may treat the HMO as a separate carrier and each HMO that operates only one (1) HMO in a service area of this state may be considered a separate carrier.  
  A distinct grouping may only be established by a small employer carrier on the basis that the applicable health benefit plans:  Are marketed and sold through individuals and organizations that are not participating in the marketing or sale of other distinct groupings of small employers for the small employer carrier;   Have been acquired from another small employer carrier as a distinct grouping of plans; or   Are provided through an association with membership of not less than ten (10) small employers that has been formed for purposes other than obtaining insurance.     A small employer carrier may establish no more than two (2) additional groupings under subdivision (a)(1), (a)(2) or (a)(3) on the basis of underwriting criteria that are expected to produce substantial variation in the health care costs.   The commissioner may approve the establishment of additional distinct groupings upon application to the commissioner and the commissioner's determination that the action would enhance the efficiency and fairness of the small employer marketplace.   
  A health benefit plan is subject to this part if it provides health benefits for small employers and if either of the following conditions is met:  Any part of the premiums or benefits is paid by a small employer, or any covered individual is reimbursed, whether through wage adjustments or otherwise, by a small employer for any portion of the premium, or for which the small employer has permitted payroll deduction for the covered individual, whether or not the coverage is issued through a group or individual policy of insurance, and whether or not the small employer pays any part of the premium; or   The health benefit plan is treated by the employer or any of the covered individuals as part of a plan or program for the purpose of  106 or  162 of the Internal Revenue Code (26 U.S.C.  106 and 162).     Chapter 5, part 3 of this title does not apply to individual accident and health insurance policies or contracts to the extent they are subject to this part.   
  Health benefit plans covering small employers are subject to the following:  Except in the case of a late enrollee, any preexisting conditions provision may not limit or exclude coverage for a period beyond twelve (12) months following the insured's effective date of coverage, and may only relate to conditions manifesting themselves in a manner that would cause an ordinarily prudent person to seek medical advice, diagnosis, care or treatment; for which medical advice, diagnosis, care or treatment was recommended or received during the twelve (12) months immediately before the effective date of coverage, or as to a pregnancy existing on the effective date of coverage;   In determining whether a preexisting conditions provision applies to an eligible employee or to a dependent, all health benefit plans shall credit the time the person was covered under a previous group health benefit plan if the previous coverage was continuous to a date not more than thirty (30) days before the effective date of the new coverage, exclusive of any applicable waiting period under the plan;    The health benefit plan is renewable with respect to all eligible employees or dependents at the option of the policyholder or contract holder except:   For nonpayment of the required premiums by the policyholder or contract holder;   For fraud or misrepresentation of the policyholder or contract holder or, with respect to coverage of individual enrollees, the enrollees or their representatives;   For noncompliance with plan provisions that have been approved by the commissioner;   When the number of enrollees covered under the plan is fewer than the number of insureds or percentage of enrollees required by participation requirements under the plan;   When the policyholder or contract holder is no longer actively engaged in the business in which it was engaged on the effective date of the plan; or   When the small employer carrier stops writing new business in the small employer market, if the employer:  Provides notice to the department and either to the policyholder, contract holder or employer of its decision to stop writing new business in the small employer market; and   Does not cancel health benefit plans subject to this part for one hundred eighty (180) days after the date of the notice required under subdivision (a)(3)(A)(vi)(a ); and for that business of the carrier that remains in force, the carrier shall continue to be governed by this part with respect to business conducted under this part;       A small employer carrier that stops writing new business in the small employer market in this state after January 1, 1993, shall be prohibited from writing new business in the small employer market in this state for a period of five (5) years from the date of notice to the commissioner. In the case of an HMO doing business in the small employer market in one (1) service area of this state, the rules set forth in this subdivision (a)(3) shall apply to the HMO's operations in the service area, unless  56-7-2208(g) [repealed] applies;     Late enrollees may be excluded from coverage for the greater of eighteen (18) months or an eighteen-month preexisting condition exclusion; however, if both a period of exclusion from coverage and a preexisting condition exclusion are applicable to a late enrollee, the combined period shall not exceed eighteen (18) months; and   A carrier may continue to enforce reasonable employer participation and contribution requirements on small employers applying for coverage; however, participation and contributions requirements may vary among small employers only by the size of the small group.     Premium rates for health benefit plans subject to this part are subject to the following:  The index rate for a rating period for any class of business shall not exceed the index rate for any other class of business by more than twenty-five percent (25%), adjusted pro rata for any rating period of less than one (1) year;   For a class of business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar coverage, or the rates that could be charged to those employers under the rating system for that class of business shall not vary from the index rate by more than thirty-five percent (35%) of the index rate, adjusted pro rata for any rating period of less than one (1) year;   The percentage increase in the premium rate charged to a small employer for a new rating period, adjusted pro rata for any rating period of less than one (1) year, may not exceed the sum of the following:  The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. If a small employer carrier is not issuing any new policies, but is only renewing policies, the carrier shall use the percentage change in the base premium rate;   Any adjustment, not to exceed fifteen percent (15%) annually and adjusted pro rata for any rating period of less than one (1) year, due to the claim experience, health status, or duration of coverage of the employees or dependents of the small employer as determined from the small employer carrier's rate manual for the class of business;   Any adjustment because of a change in coverage or change in the case characteristics of the small employer as determined from the small employer carrier's rate manual for the class of business;     Premium rates for health benefit plans shall comply with the requirements of this section, notwithstanding any reinsurance premiums and assessments paid or payable by small employer carriers in accordance with  56-7-2221 [repealed];   In any case where a small employer carrier uses industry as a case characteristic in establishing premium rates, the rate factor associated with any industry classification may not vary from the arithmetic average of the rate factors associated with all industry classifications by greater than fifteen percent (15%) of coverage;   Small employer carriers shall apply rating factors including case characteristics consistently with respect to all small employers in a class of business. Adjustments in rates for claims experience, health status and duration from issue may not be applied individually. Any such adjustment must be applied uniformly to the rate charged for all participants of the small employer; and   Notwithstanding this title to the contrary, neither the definition of case characteristics in  56-7-2203, nor this chapter, prohibits a pool created under  56-26-204 from using case characteristics, claim experience, health status, or duration of coverage since issue in determining initial or adjusted premium rates for employers pooling their liabilities under  56-26-204.     All premium rates for a small employer carrier shall be subject to the review and approval or disapproval of the commissioner as provided for in  56-26-102 and any regulations promulgated under the authority of that section. Section 56-26-102 and regulations shall apply to all plans subject to this section in the same manner as to accident and sickness policies subject to  56-26-102.   A small employer carrier shall not involuntarily transfer a small employer into or out of a class of business. A small employer carrier shall not offer to transfer a small employer into or out of a class of business unless the carrier offers to transfer all small employers in the class of business without regard to case characteristics, claims experience, health status or duration of coverage since issue.   In connection with the offering for sale of any health benefit plan to a small employer, each small employer carrier shall make a reasonable disclosure as part of its solicitation and sales materials of:  The extent to which premium rates for a specified small employer are established or adjusted in part based upon the actual or expected variation in claims costs, or actual or expected variation in health condition of the eligible employees and dependents of the small employer;   Provisions concerning the small employer carrier's right to change premium rates and the factors other than claims experience that affect changes in premium rates;   Provisions relating to renewability of policies and contracts; and   Provisions affecting any preexisting conditions provision.     Each small employer carrier shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles.   Each small employer carrier shall file with the commissioner annually, on or before March 15, an actuarial certification certifying that it is in compliance with this part and that its rating methods are actuarially sound. The small employer carrier shall retain a copy of the certification at its principal place of business.   A small employer carrier shall make the information and documentation described in subsection (f) available to the commissioner upon request. Except in cases of violations of this part, the information is proprietary and trade secret information and is not subject to disclosure by the commissioner to persons outside the department except as agreed to by the small employer carrier or as ordered by a court of competent jurisdiction.   Subdivisions (a)(1), (3) and (5) and subsections (b) and (d)-(h) apply to health benefit plans delivered, issued for delivery, renewed or continued in this state or covering persons residing in this state on or after January 1, 1993. Subdivisions (a)(2) and (4) apply to health benefit plans delivered, issued for delivery, renewed or continued in this state or covering persons residing in this state on or after the date the plan becomes operational, as designated by the commissioner. For purposes of this subsection (i), the date a health benefit plan is continued is the anniversary date of the issuance of the health benefit plan.   
  A health group cooperative of small employers may be formed only for the purpose of obtaining insurance. A health group cooperative shall:  Contain at least one thousand (1,000) eligible employees or have at least ten (10) participating employers;   Establish requirements for membership. A small employer's participation in a cooperative is voluntary, but an employer electing to participate in a cooperative shall commit to purchasing coverage through the cooperative for three (3) years, unless allowed to terminate participation because of a financial hardship affecting the employer as determined by rules governing termination promulgated by the commissioner. These rules shall include, at a minimum, that financial hardship means the initiation of bankruptcy proceedings or dissolution of the employer. No health group cooperative shall exclude a small employer that otherwise meets the requirements for membership on the basis of a health status-related factor, as defined in  56-7-2802, in relation to the employee or a dependent of the employee;   Hold an open enrollment period at least once a year during which period eligible employers and eligible employees may join the health group cooperative;   Allow eligible employees and their dependents, upon initial enrollment and during subsequent open enrollment periods, to choose among health insurance plans from the insurer selected by and offered through the cooperative. A person covered by a health insurance plan offered through the cooperative that requires an enrollment period in excess of one (1) year is eligible to choose among available plans upon the completion of the enrollment period;   Offer coverage under all the selected insurers' plans offered through the cooperative to all eligible employees of member small employers and their dependents. Coverage shall be offered to all employees of member small employers and their dependents except as provided in  56-7-2207(a)(4);   Not assume any risk or form self-insurance plans among its members unless it complies with chapter 26, part 2 of this title; provided, however, that compliance with  56-26-204(a)(1)(C) shall not be required of health cooperatives; and   Have the option of using any type of rating arrangement with the insurer selected by the cooperative. At the cooperative's discretion, premiums may be paid to the health insurance plans by the cooperative or by member small employers. A health insurance plan offered through the health group cooperative that rates:  Each member small employer separately is subject to the laws governing small employer health insurance; and   The entire group as a whole shall charge each insured person based on a base rate within the health group cooperative, adjusted for case characteristics as permitted by  56-7-2207 and plan selection, and is subject to the laws governing group accident and health insurance.        The health group cooperative, prior to offering any health insurance plan through the cooperative, and annually after the initial offering, shall register with the department and demonstrate continued compliance with subdivision (b)(2).   The health group cooperative shall be organized as a nonprofit corporation and have the rights and duties pursuant to the Tennessee Nonprofit Corporation Act, compiled in title 48, Chapters 51 68. On receipt of a certificate of incorporation from the secretary of state, the cooperative shall file written notification of the receipt of the certificate and a copy of the cooperative's organizational documents with the commissioner. The board of directors shall file annually with the commissioner a statement of all amounts collected and expenses incurred for the preceding year.     A small employer insurer may not form, or be a member of, a health group cooperative. An insurer may associate with a sponsoring entity, such as a business association, chamber of commerce, or other organization representing employers or serving an analogous function, to assist the sponsoring entity in forming a health group cooperative.   
  A health group cooperative shall not be liable for, nor shall a member of the board of directors, the executive director, an employee, or an agent of a cooperative, be liable for:  An act performed in good faith in the execution of duties in connection with the cooperative; or   An independent action of a small employer insurer or a person who provides health care services under a health insurance plan.     A health group cooperative shall not be liable for, nor shall a member of the board of directors, the executive director, an employee, or an agent be liable for a failure to arrange for coverage of a particular illness, disease, or health condition.   
 A health group cooperative:   Shall arrange for group health insurance plan coverage for small employers who are members of the cooperative by contracting with small employer insurers who meet the criteria established by this part for coverage under group health insurance plans;   Shall collect premiums to cover the cost of:  Group health insurance plan coverage purchased through the cooperative; and   The cooperative's administrative expenses;     May contract with agents to market coverage issued through the cooperative;   Shall establish administrative and accounting procedures for the operation of the cooperative;   May contract with a small employer insurer or third-party administrator to provide administrative services to the cooperative;   Shall contract with a small employer insurer for the provision of services to small employers covered through the cooperative;   Shall develop and implement a plan to maintain public awareness of the cooperative and publicize the eligibility requirements for, and the procedures for, enrollment in coverage through the cooperative;   May negotiate the premiums paid by its members; and   May obtain from the cooperative's selected insurer other ancillary health insurance products and services for its members as are customarily offered in conjunction with group health insurance plans.   
  A health group cooperative shall contract only with a small employer insurer that demonstrates:  That the insurer or health maintenance organization is licensed and in good standing with the department;   The capacity to administer the group health insurance plans;   The ability to monitor and evaluate the quality and cost effectiveness of care and applicable procedures;   The ability to conduct utilization management and applicable procedures and policies;   The ability to assure enrollees a sufficient number of health care providers, including specialty providers; and   A satisfactory grievance procedure and the ability to respond to enrollees' calls, questions, and complaints.     A health group cooperative shall comply with federal laws applicable to cooperatives and group health insurance plans issued through cooperatives, to the extent required by federal law and this title or rules promulgated pursuant to this title.   
  All individual and group health insurance policies providing coverage on an expense incurred basis and individual and group service or indemnity type contracts issued by a nonprofit corporation that provide coverage for a child of the insured or subscriber shall, as to the child's coverage, also provide that the health insurance benefits applicable to children, if any, shall be payable with respect to a newly born child of the insured or subscriber from the moment of birth.   The coverage for newly born children shall, in addition to coverage for infants placed in the well-child care unit, consist of coverage of injury or sickness, including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities. The coverage of newly born infants and pregnant women shall also include coverage for testing as provided in  68-5-401(a)(2).   If payment of a specific premium or subscription fee is required to provide coverage for a child, the policy or contract may require that notification of birth of a newly born child and payment of the required premium or fee must be furnished to the insurer or nonprofit service or indemnity corporation within thirty-one (31) days after the date of birth in order to have the coverage continue beyond the thirty-one-day period.   The requirements of this section apply to all insurance policies and subscriber contracts delivered or issued for delivery in this state more than one hundred twenty (120) days after July 1, 1974, and to those policies and subscriber contracts that are substantially amended after July 1, 1980.   If and only if a person or the person's spouse is pregnant at the time health insurance coverage is purchased, then at the time of the purchase this section may be contractually waived with respect to health insurance coverage for an unborn child and/or the right of the person to purchase health insurance coverage for the unborn child.   
   An individual hospital or medical expense insurance policy or contract, as provided under chapter 26, 28 or 29 of this title, delivered or issued for delivery in this state, or that is amended or renewed by agreement or otherwise, on or after August 13, 1986, and that provides that coverage of a dependent child shall terminate upon attainment of the limiting age for dependent children specified in the policy, shall also provide that the limiting age not be earlier than twenty-four (24) years for those dependent children who are unmarried and dependent on the insured for support and maintenance. This subdivision (a)(1) shall not be construed to require coverage for a dependent child under the policy of insurance, if the dependent child would be otherwise ineligible for the coverage either by the terms of the policy of insurance or other provisions of this title, except those relating to the limiting age for the dependent child stated in this subdivision (a)(1).   A group hospital or medical expense insurance policy or contract, as provided under chapter 26, 28 or 29 of this title, delivered or issued for delivery in this state, or that is amended or renewed by agreement or otherwise, on or after August 13, 1986, and that provides that coverage of a dependent child shall terminate upon attainment of the limiting age for dependent children specified in the policy, shall also provide that the limiting age not be earlier than twenty-four (24) years for those dependent children who are unmarried and dependent on the insured for support and maintenance. This subdivision (a)(2) shall not be construed to require coverage for a dependent child under the policy of insurance if the dependent child would be otherwise ineligible for the coverage either by the terms of the policy of insurance or other provisions of this title, except those relating to the limiting age for the dependent child stated in this subdivision (a)(2).      An individual hospital or medical expense insurance policy or contract, as provided under chapter 26, 28 or 29 of this title, delivered or issued for delivery in this state more than one hundred twenty (120) days after May 7, 1969, that provides that coverage of a dependent child shall terminate upon attainment of the limiting age for dependent children specified in the policy, shall also provide in substance that attainment of the limiting age shall not operate to terminate the coverage of the child while the child is and continues to be both:  Incapable of self-sustaining employment by reason of intellectual or physical disability; and   Chiefly dependent upon the policyholder for support and maintenance, provided proof of the incapacity and dependency is furnished to the insurer by the policyholder within thirty-one (31) days of the child's attainment of the limiting age and subsequently as may be required by the insurer, but not more frequently than annually after the two-year period following the child's attainment of the limiting age.     A group hospital or medical expense insurance policy or contract, as provided under chapter 26, 28 or 29 of this title, delivered or issued for delivery in this state more than one hundred twenty (120) days after May 7, 1969, that provides that coverage of a dependent child of an employee or other member of the covered group shall terminate upon attainment of the limiting age for dependent children specified in the policy, shall also provide in substance that attainment of the limiting age shall not operate to terminate the coverage of the child while the child is and continues to be both:  Incapable of self-sustaining employment by reason of intellectual or physical disability; and   Chiefly dependent upon the employee or member for support and maintenance, provided proof of the incapacity and dependency is furnished to the insurer by the employee or member within thirty-one (31) days of the child's attainment of the limiting age and subsequently as may be required by the insurer, but not more frequently than annually after the two-year period following the child's attainment of the limiting age.     Any group hospital or medical expense insurance policy or contract that is issued to replace an existing group policy or contract shall continue the coverage for those dependents with disabilities covered under the prior group insurance policy or contract, regardless of age, in the manner specified in subdivisions (a)(1) and (2). The dependents with disabilities covered under the prior plan on the date of discontinuance who would be eligible for coverage in accordance with the succeeding carrier's plan of benefits, except for the fact that they have attained the limiting age, shall be covered under the succeeding carrier's plan on its effective date so long as they have a disability and are dependent under the definitions in subdivisions (b)(1) and (2).      Notwithstanding any other law to the contrary, no insurer, or employer or other entity that administers health, medical, or surgical insurance or that has an insurance company administering its health services program, and no individual, blanket or group policy of insurance issued pursuant to this title, that is entered into, amended, delivered, issued for delivery, or renewed by agreement or otherwise, on or after March 17, 1982, shall deny, for the reason that the insured or the covered dependent incurred no expense, charge, or obligation, a claim for expenses incurred in connection with the patient's hospitalization for hospital, medical or surgical services rendered by a nongovernmental, charitable research hospital that bills all patients for services rendered but does not enforce by judicial proceedings payment from an individual patient in the absence of insurance coverage.   No expense incurred, individual or group hospital, medical or surgical policy issued, delivered, amended or renewed on or after March 17, 1982, or employer or other entity that administers health, medical, or surgical insurance or that has an insurance company administering its health services program, shall except, limit, or reduce benefits or otherwise fail to pay for services rendered by a nongovernmental charitable research hospital because it bills patients for services rendered, but does not enforce by judicial proceedings collection from individual patients in the absence of insurance coverage.      All policies or contracts as described in subdivisions (a)(1) and (2), and all ERISA group health plans and health maintenance organizations, are prohibited from denying coverage to a child because the child was born out of wedlock, was not claimed as a dependent on the parent's income tax return, or does not reside with the parent or in the service area of the entity providing health insurance or coverage.   Should health insurance or coverage be ordered by a court of law or administrative order and the parent so ordered is eligible for coverage, the insurer, the employer or the ERISA group health plan administrator, nonprofit hospital and medical service plan or health maintenance organization of the parent so ordered must permit enrollment of the child who is otherwise eligible, without regard to any enrollment season restriction. The entity providing health insurance or coverage must accept the applications for coverage of the child made by either the child's other parent or the state agency administering Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or the Title IV-D child support enforcement program (42 U.S.C.  661-669).   No entity providing health care benefits may disenroll or eliminate coverage under subdivision (d)(2) without satisfactory written evidence that the court or administrative order is no longer in effect or that there is written evidence that the child will be enrolled in comparable health coverage through another insurer that will take effect not later than the effective date of the disenrollment or, in the case of an employer, where the employer has eliminated family health coverage for all of its employees.   No entity providing health care benefits may impose different requirements on a state, as assignee of the rights of a covered individual who is enrolled in any insurance program offered in the state, that differ from requirements imposed on agents or assignees of any other covered individual.   In cases where the noncustodial parent is providing coverage, all entities providing the coverage must provide information to the custodial parent, or provider, with the custodial parent's approval, that is necessary for the child to obtain benefits, though that coverage must permit the custodial parent or the provider with approval of the custodial parent, to submit claims for covered services without the approval of the noncustodial parent, and must make payment of the claims directly to the custodial parent, the provider, the state agency administering Title XIX or IV-D of the Social Security Act or any contractor who has contracted with the state to provide medicaid services.   The commissioner is authorized to adopt rules and standards establishing reasonable procedures for use by group health plans to determine whether a child is covered under a qualified medical support order.     All policies and contracts as described in subdivision (a)(2), all ERISA group health plans and health maintenance organizations must provide the same coverage to adopted children under eighteen (18) years of age as of the date of placement for adoption or adoption as for natural children effective upon placement of the children, regardless of whether the adoption has become final. No preexisting conditions of an adopted child may be used to deny coverage if the adoption or placement for adoption occurs while the parent is eligible for coverage.   
  No insurance company doing business in this state shall declare any life insurance policy or any noncancellable or guaranteed renewable accident and health insurance policy owned by a resident of this state forfeited or lapsed within six (6) months after default in payment of any premium, installment or interest, unless a written or printed notice stating the amount of the premium, installment or interest due on the policy, the place where it shall be paid and the name and address of the person or company to which it is payable, has been duly addressed and mailed with the required postage affixed, to the policy owner at the policy owner's last known post office address as shown by the records of the insurance company, on or before the day the premium, installment or interest is due and payable, before the beginning of the period of grace. The notice shall also state that unless the premium or other sums are paid to the company or its agent, the policy will lapse or be forfeited, except as to nonforfeiture options that may be provided for by any life insurance policy. Policy owner, as used in this section, means the owner of the policy, or other person designated as the person to receive premium notices, all as shown by the records of the insurance company.   The affidavit of any responsible officer, clerk or agent of the insurance company authorized to mail the notice that it is the standard practice of the company to duly address and mail to policyowners the notice required by this section shall be prima facie evidence that the notice has been duly given.   No action shall be maintained to recover under a lapsed or forfeited policy on the ground that the insurance company failed to comply with this section, unless instituted within two (2) years from the due date upon which default was made in paying the premium, installment or interest for which it is claimed that lapse or forfeiture ensued.   This section does not apply to group or group-type policies, to industrial life or accident and health policies, to any policies upon which premiums are payable monthly or at more frequent intervals, or to policies for which premiums are billed to and payable through an employer.   
 The commissioner is authorized to adopt rules applicable to insurance policies and subscriber contracts provided by an insurance company or a nonprofit service corporation on a group or group-type basis establishing reasonable requirements for extension of benefits and determination of claim liability in the event of discontinuance of coverage for nonpayment of premiums or replacement of coverage by another carrier. All rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, and shall provide for any notices required that notice to the group policyholder or subscriber contract holder are deemed notice to the employee, member, or subscriber. No rule shall require the extension of coverage, except as to policies or contracts issued, altered, or amended after the effective date of the rule.  
   Subject to the limitations of subdivision (a)(2), no policy of group life insurance shall be delivered in this state unless it contains in substance the provisions contained in subdivision (a)(3), or provisions that, in the opinion of the commissioner, are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder.    Subdivisions (a)(3)(F)-(J) do not apply to policies issued to a creditor to insure debtors of the creditor;   The standard provisions required for individual life insurance policies shall not apply to group life insurance policies; and   If the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions that, in the opinion of the commissioner, are equitable to the insured persons and to the policyholder, but nothing in this subdivision (a)(2)(C) shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.     The mandatory provisions referred to in subdivision (a)(1) are:  A provision that the policyholder is entitled to a grace period of thirty-one (31) days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during the grace period;   A provision that the validity of the policy shall not be contested, except for nonpayment of premiums after it has been in force for two (2) years from its date of issue; and that no statement made by any person insured under the policy relating to the person's insurability shall be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two (2) years during the person's lifetime nor unless it is contained in a written instrument signed by the person;   A provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument is or has been furnished to the person or to the person's beneficiary;   A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the person's coverage;   A provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, the provision to contain a clear statement of the method of adjustment to be used;   A provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the policy in the event there is no designated beneficiary, as to all or any part of the sum, living at the death of the person insured, and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of the sum not exceeding five hundred dollars ($500) to any person appearing to the insurer to be equitably entitled to the sum by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured;   A provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which the person is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in subdivisions (a)(3)(H)-(J);   A provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, the person shall be entitled to have issued to the person by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits; provided, that application for the individual policy shall be made, and the first premium paid to the insurer, within thirty-one (31) days after the termination; and provided, further, that:   The individual policy shall, at the option of the person, be on any one (1) of the forms then customarily issued by the insurer at the age and for the amount applied for, except that the group policy may exclude the option to elect term insurance;   The individual policy shall be in an amount not in excess of the amount of life insurance that ceases because of the termination, less the amount of any life insurance for which the person is or becomes eligible under the same or any other group policy within thirty-one (31) days after the termination, except any amount of insurance that has matured on or before the date of the termination as an endowment payable to the person insured, whether in one (1) sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount that is considered to cease because of the termination; and   The premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which the person then belongs, and to the person's age attained on the effective date of the individual policy;     A provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured under the policy at the date of the termination whose insurance terminates and who has been insured for at least five (5) years prior to the termination date shall be entitled to have issued to the person by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by subdivision (a)(3)(H), except that the group policy may provide that the amount of the individual policy shall not exceed the smaller of:   The amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which the person is or becomes eligible under any group policy issued or reinstated by the same or another insurer within thirty-one (31) days after the termination; and   Two thousand dollars ($2,000);     A provision that if a person insured under the group policy dies during the period within which the person would have been entitled to have an individual policy issued in accordance with subdivision (a)(3)(H) or (I) and before the individual policy has become effective, the amount of life insurance that the person would have been entitled to have issued under the individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium for the individual policy has been made; and   In the case of a policy issued to a creditor to insure debtors of the creditor, a provision that the insurer will furnish to the policyholder for delivery to each debtor insured under the policy a form that will contain a statement that the life of the debtor is insured under the policy and that any death benefit paid under the policy by reason of the debtor's death shall be applied to reduce or extinguish the indebtedness.       In the case of a policy that provides that each insured debtor whose protection under the group insurance policy terminates by reason of absolute assignment by the creditor of the insured debtor's indebtedness for the discharge of which the debtor when incurring the indebtedness had agreed upon installment payments over a period of more than ten (10) years, there shall be a provision that each insured debtor shall be entitled to have issued to the person by the insurer, without evidence of insurability, upon application made to the insurer and upon the payment of the premium applicable to the class of risk to which the person belongs and to the form and amount of the policy at that person's then attained age within thirty-one (31) days after the assignment of the indebtedness, an individual policy of life insurance; provided, that the individual policy of life insurance shall be in any one (1) of the level premium forms customarily issued by the insurer, except term insurance, in an amount equal to the amount of the person's protection terminated under the group insurance policy because of the assignment, less the amount of insurance for which the insured debtor may become eligible and qualify under any group insurance policy in effect with the assignee at the date of the assignment or issued to the assignee within the period of thirty-one (31) days; and provided, further, that in the event that the assignment of the indebtedness is made by the creditor at the request of the insured debtor, the insurer may require satisfactory evidence of the debtor's insurability before making the individual policy of life insurance effective. If the insured debtor dies during the period within which the debtor would have been entitled to have an individual policy issued in accordance with this subsection (b), and before the individual policy has become effective, the amount of life insurance that the person would have been entitled to have issued under the individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium for the policy has been made.   If any individual insured under a group life insurance policy delivered in this state becomes entitled under the terms of the policy to have an individual policy of life insurance issued to the person without evidence of insurability, subject to making of application and payment of the first premium within the period specified in the policy, and if the individual is not given notice of the existence of the right at least fifteen (15) days prior to the expiration date of the period, then the individual shall have an additional period within which to exercise the right, but nothing contained in this subsection (c) shall be construed to continue any insurance beyond the period provided in the policy. This additional period shall expire fifteen (15) days after the individual is given notice, but in no event shall the additional period extend beyond sixty (60) days after the expiration date of the period provided in the policy. Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this subsection (c).   
 Section 56-7-2305 does not apply to any policy or contract of group life insurance legally in effect March 8, 1957, or any renewal or renewals of the policy or contract.  
 No policy of life insurance shall be issued in this state or be issued by a life insurance company organized under the laws of this state unless the policy contains the following:   Payment of Premiums.  A provision that all premiums after the first shall be payable in advance either at the home office of the company or to an agent of the company, upon delivery of a receipt signed by one (1) or more of the officers who shall be designated in the policy, when a receipt is requested by the policyholder;   Grace for Payment of Premiums; Interest; Deduction for Death.  A provision for a grace of one (1) month for the payment of every premium after the first year, which may be subject to an interest charge, during which month the insurance shall continue in force, which provision may contain a stipulation that if the insured dies during the month of grace, the overdue premium will be deducted in any settlement under the policy;   Policy is Entire Contract; Incontestability; Exceptions.  A provision that the policy shall constitute the entire contract between the parties, and shall be incontestable after it has been in force during the lifetime of the insured for a specified period, not more than two (2) years from its date, except for nonpayment of premiums and except for violations of the conditions of the policy relating to naval and military services in time of war;   Statements Are Representations and Not Warranties in Absence of Fraud; Written Application Made Part of Policy.  A provision, except in industrial policies, that all statements made by the insured shall, in the absence of fraud, be deemed representations and not warranties, and that no such statement shall void the policy unless it is contained in a written application, and a copy of the application is endorsed upon or attached to the policy when issued;   Amount Payable Where Age Understated.  A provision that if the age of the insured is understated, the amount payable under the policy shall be that which the premium would have purchased at the correct age;   Participation in Surplus.  In a case of participating policy, a provision that the policy shall participate annually in the divisible surplus of the company beginning not later than the end of the third policy year, and any policy containing provision for annual participation at the end of the first policy year may also provide that the dividend be paid, subject to the payment of the full premium for the second policy year. The insured under any annual dividend policy shall have the right each year to have the dividend arising from the participation either paid in cash or applied in reduction of premiums, or applied to the purchase of paid-up additional insurance, or left to accumulate to the credit of the policy with interest at a rate determined from time to time by the company, but not less than a guaranteed minimum rate specified in the policy; and payable at the maturity of the policy but withdrawable at any time. If the insured fails to notify the company in writing of the election within the period of grace allowed for the payment of premium, the policy shall provide which of the options are effective; provided, that this sentence does not apply to any policy issued to any plan or trust having qualified status under subchapter D, part I, subtitle A of the Internal Revenue Code of 1954 (26 U.S.C.  401 et seq.), nor under  501(a) of the Internal Revenue Code of 1954 (26 U.S.C.  501(a)). This subdivision (6), however, shall not require any individual participating term insurance policy to contain a dividend option under which the dividend may be applied to the purchase of paid-up additional insurance;   Loans on Policies; Exception.  A provision that after three (3) full years' premiums have been paid, the company, at any time while the policy is in force, will advance on proper assignment of the policy and on the sole security of the policy, at a specified rate of interest, a sum equal to, or at the option of the owner of the policy, less than the amount required by  56-7-2309 under the conditions specified by  56-7-2309; and that the company will deduct from the loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year. It shall be further stipulated in the policy that failure to repay any advance or to pay interest shall not void the policy unless the total indebtedness on the policy to the company equals or exceeds the loan value at the time of the failure, nor until one (1) month after notice has been mailed by the company to the last known address of the insured and of the assignee, if any. No condition other than as provided in this subdivision (7) or in  56-7-2309 shall be exacted as a prerequisite to the advance. This provision shall not be required in term insurance;   Nonforfeiture Benefits; Cash Surrender Value.  A provision for nonforfeiture benefits and cash surrender values in accordance with the requirements of  56-7-312 or  56-7-401;   Table Showing Loan Values and Options.  A table showing in figures the loan values and the options available under the policies each year upon default in premium payments during at least the first twenty (20) years of the policy;   Value of Policy to Be Applied for Other Insurance; Reinstatement Within Three (3) Years After Default.  A provision that if, in event of default in premium payments, the value of the policy shall be applied to the purchase of other insurance; and if the insurance shall be in force and the original policy shall not have been surrendered to the company and cancelled, the policy may be reinstated within three (3) years from the default upon evidence of insurability satisfactory to the company and payment of arrears of premiums, with interest;   Settlement Upon Proof of Death.  A provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death, or not later than two (2) months after receipt of the proof;   Table to Show Installment Payments of Policy.  A table showing the amounts of installments in which the policy may provide its proceeds may be payable;   Provisions Not Applicable to Single Premium Policies Need Not Be Incorporated in Single Premium Policies.  Any of subdivisions (1)-(12) or portions of subdivisions (1)-(12) relating to premiums not applicable to single premium policies shall to that extent not be incorporated in the single premium policies.   
 No policy of life insurance in a form other than as prescribed in  56-7-2307 shall be issued or delivered in this state, or be issued by a life insurance company organized under the laws of this state, if it contains any of the following:   Forfeiture of Policy for Failure to Repay Loans; Proposed Benefits Not Strictly Insurance.  A provision for forfeiture of the policy for failure to repay any loan on the policy or to pay interest on the loan while the total indebtedness on the policy is less than the loan value of the policy, or any provisions for forfeiture for failure to repay the loan or to pay interest on the loan, unless the provision contains a stipulation that no forfeiture shall occur until at least one (1) month after notice has been mailed by the company to the last known address of the insured and of the assignee, if any, or a provision contemplating any proposed benefit not essentially a part of the insurance contract or any connection of the assured with the company other than that of policyholder;   Limitation of Time of Commencement of Action to Less Than Five (5) Years.  A provision limiting the time within which any action at law or in equity may be commenced to less than five (5) years after the cause of action accrues;   Policy Taking Effect Before Application Made.  A provision by which the policy purports to be issued or to take effect as of a date more than six (6) months before the application for the policy was made, if thereby the premium on the policy or contract is reduced below the premium that would be payable on the policy as determined by the nearest birthday or the last birthday of the insured at the time when the application was made; provided, that nothing contained in this subdivision (3) shall invalidate any contract made in violation of this subdivision (3). This subdivision (3) shall not apply to any policy issued under a plan or trust having qualified status under subchapter D, part I, subtitle A of the Internal Revenue Code of 1954 (26 U.S.C.  401 et seq.), nor under  501(a) of the Internal Revenue Code of 1954 (26 U.S.C.  501(a)). This subdivision (3) shall not be construed to prohibit the exchange, alteration or conversion of policies of life insurance as of the original date of the policies, if the amount of insurance provided under the new policy does not exceed the amount of insurance under the original policy, or the amount of insurance that the premium paid for the original policy would have purchased if the new policy had been originally applied for, whichever is greater; nor to prohibit the exercise of any conversion privilege contained in any policy or contract;   Settlement at Maturity of Less Than Value of Policy.  A provision for any mode of settlement at maturity of less value than the amount insured by the policy, plus dividend additions, if any, less any indebtedness to the company on the policy and less any premium that may by the terms of the policy be deducted, payments to be made in accordance with the terms of the policy; or   Limitations or Exceptions of Risks.  A provision that certain named causes of death are excepted from the policy and are not assumed by the insurer; provided, that the following causes of death may be excepted by a provision in the policy:   Suicide committed, while sane or insane, within two (2) years from the date of issue of the policy;   Death as a direct result of service in the military, naval or air forces, in time of war, including any ambulance, medical, hospital or civilian noncombatant unit serving actively with the military, naval or air forces;   Death resulting from injuries received while engaging in any aerial flight, except as a fare-paying passenger on a regularly scheduled flight of a duly licensed airline on an established air route; or   Death within two (2) years from date of issue of the policy as a result of a specified perilous or extra hazardous occupation or occupations;     Nothing in this subdivision (5) shall apply to any provision in a life insurance policy for additional benefits in the event of death by accident or accidental means;   Nothing in this subdivision (5) shall be construed to prohibit a provision in a policy that, in the event of death within two (2) years of the date of issue, would place a limitation or condition upon the coverage or liability in the policy because of a condition that exists, or has existed, or any event that has occurred, prior to or at the time of the delivery of the policy; and provided, further, that the condition or event was material to the risk to be assumed under the terms of the policy; provided, that the policy shall not be affected because of any condition or event that was disclosed in a written application for the policy;   This subdivision (5) shall apply only to policies issued for delivery in this state; and   Instead of any provision permitted under subdivisions (5)(A)(i)-(iv) or (5)(C), a policy may contain any provision or provisions that, in the opinion of the commissioner, are substantially the same or more favorable to the policyholder. This subdivision (5) shall apply to all life insurance policies, including industrial policies.     
  In the case of those policies issued prior to the operative date of  56-7-401, the Standard Nonforfeiture Law, the loan value referred to in  56-7-2307(7) shall be the reserve at the end of the current policy year on the policy and on any dividend additions to the policy, less a sum not more than two and one half percent (2.5%) of the amount insured by the policy and of any dividend additions to the policy. The policy shall specify the mortality table and rate of interest adopted for computing the reserve and may provide that the loan may be deferred for not exceeding six (6) months after the application for the loan is made.    In the case of policies issued on or after the operative date of  56-7-401, the Standard Nonforfeiture Law, the loan value referred to in  56-7-702(b)(15) and 56-7-2307(7) shall be:  If there is no existing indebtedness to the company on the policy, the cash surrender value at the end of the current policy year; and   If there is existing indebtedness to the company on the policy, that amount that the cash surrender value at the end of the current policy year would be if no indebtedness existed, the cash surrender value in either case being that required by  56-7-401.     The company shall reserve the right to defer the loan, except when made to pay the premium, for six (6) months after application for the loan is made.     As used in this subsection (c) and subsections (d) and (e), the published monthly average means:  Moody's Corporate Bond Yield Average  Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor publication; or   In the event that Moody's Corporate Bond Yield Average  Monthly Average Corporates is no longer published, a substantially similar average, established by regulation issued by the commissioner.       Policies issued on or after July 1, 1982, shall provide for policy loan interest rates as follows:   A provision permitting a specified rate of interest in accordance with  56-7-2307(7); or   A provision permitting an adjustable maximum interest rate established from time to time by the life insurer as permitted by law.     No life insurer shall be permitted to issue policies containing variable rates of interest on policy loans pursuant to subdivision (d)(1)(A)(ii) unless the insurer also makes available policies, which may or may not be on the same plan of insurance, with fixed rates of interest on policy loans pursuant to subdivision (d)(1)(A)(i).     The rate of interest charged on a policy loan made under subdivision (d)(1)(A)(ii) shall not exceed the higher of the following:  The published monthly average for the calendar month ending two (2) months before the date on which the rate is determined; or   The rate used to compute the cash surrender values under the policy during the applicable period, plus one percent (1%) a year.     If the maximum rate of interest is determined pursuant to subdivision (d)(1)(A)(ii), the policy shall contain a provision setting forth the frequency at which the rate is to be determined for that policy.   The maximum rate for each policy must be determined at regular intervals but not more frequently than once every twelve (12) months. At the intervals specified in the policy:  The rate being charged may be increased whenever the increase as determined under subsection (d) would increase that rate by one half percent (0.5%) or more a year; and   The rate being charged shall be reduced whenever the reduction as determined under subsection (d) would decrease that rate by one half percent (0.5%) or more a year.     The life insurer shall:  Notify the policyholder at the time a cash loan is made of the initial rate of interest on the loan;   Notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in subdivision (d)(5)(C);   Send to policyholders with loans reasonable advance notice of any increase in the rate; and   Include in the notices required in subdivision (d)(5)(C) the substance of the pertinent provisions of subdivisions (d)(1) and (3).     The loan value of the policy shall be determined in accordance with subsections (a) and (b), but no policy shall terminate in a policy year as the sole result of change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which it would otherwise have terminated if there had been no change during that policy year.   The substance of the pertinent provisions of subdivisions (d)(1) and (3) shall be set forth in the policies to which they apply.   For the purposes of this subsection (d):  The rate of interest on policy loans permitted under this subsection (d) includes the interest rate charged on reinstatement of policy loans for the period during and after any lapse of a policy;   Policy includes certificates issued by a fraternal benefit society and annuity contracts that provide for policy loans;   Policyholder includes the owner of the policy or the person designated to pay premiums as shown on the records of the life insurer; and   Policy loan includes any premium loan made under a policy to pay one (1) or more premiums that were not paid to the life insurer as they fell due.     The maximum effective rate of interest permitted for a policy loan shall not exceed the absolute ceiling set for the applicable formula rate in  47-14-103(2) or any successor statute.   No other law shall apply to policy loan interest rates unless made specifically applicable to the rates.     Subsections (c) and (d) and this subsection (e) shall not apply to any insurance contract issued before July 1, 1982, unless the policyholder agrees in writing to the applicability of subsections (c) and (d) and this subsection (e); provided, that any offer made by an insurer to an insured to endorse the applicability of subsections (c) and (d) and this subsection (e) to any insurance contract issued before July 1, 1982, shall be filed with the commissioner prior to the making of the offer and shall be subject to the commissioner's approval.   
 All life insurance companies authorized to do the business of life insurance in this state are required to print, in conspicuous type, on the face or first page of each policy sold to citizens of this state, words correctly describing the character of the policy.  
  Filing and Approval.  No policy of life insurance shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, or application that becomes a part of the policy be used in connection with the policy until a copy of the form has been filed with the commissioner; nor shall any policy, endorsement, rider, or application be so used until the expiration of thirty (30) days after the form has been filed, unless the commissioner sooner gives written approval. The commissioner shall notify, in writing, the insurer that has filed the form if it does not comply with this chapter, specifying the reasons for the opinion. It shall thereafter be unlawful for the insurer to issue the form in this state. In the notice, the commissioner shall state that a hearing will be granted within twenty (20) days upon written request of the insurer.   Withdrawal of Approval  Notice of Hearings.  The commissioner may, at any time after a hearing, of which not less than twenty (20) days' written notice has been given to the insurer, withdraw approval of the form if the form contains a provision for benefits that is misleading or deceptive or that would encourage misrepresentation of the policy. It is unlawful for the insurer to issue the form or use it in connection with any policy after the effective date of the withdrawal of approval. A notice of any hearing called under this section shall specify the matters to be considered at the hearing, and any decision affirming disapproval or directing withdrawal of approval under this section shall be in writing and shall specify the reasons for the decision.   Disapproval  Substantial Compliance.  The commissioner shall not disapprove or withdraw approval of any policy on the ground that its provisions do not comply with this chapter, if it is shown that the rights of the insured or the beneficiary under the policy as a whole are not less favorable than the rights provided by this chapter.   Review  Certiorari.  Any order or decision of the commissioner under this section shall be subject to review in the manner provided by title 27, chapter 9, pertaining to the statutory writ of certiorari.   Policy Deliverable in Another State.  If any policy is issued by an insurer domiciled in this state for delivery to a person residing in another state, and if the official having responsibility for the administration of the insurance laws of the other state has advised the commissioner that the policy is not subject to approval or disapproval by the official, the commissioner may by ruling require that the policy meet the standards set forth in this chapter.   Application to Annuity Contracts and Life Policies.  This section applies to individual annuity contracts, but not to group annuity contracts, to individual and group life insurance policies and to industrial life insurance policies.   Filing Procedure.  The commissioner may make reasonable rules and regulations concerning the procedure for the filing or submission of policies subject to this section as are necessary, proper or advisable to the administration of this section.   
  A group policy delivered or issued for delivery in this state that provides hospital, surgical or major medical expense insurance, or any combination of these coverages, on an expense incurred basis, but not a policy that provides benefits for specific diseases or for accidental injuries only, shall provide that an employee or member whose insurance under the group policy has been terminated for any reason, except discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy, and under any group policy providing similar benefits that it replaces, for at least three (3) months immediately prior to termination, shall be entitled to have the coverage nonetheless continued under the group policy for the fractional policy month remaining at termination, plus three (3) additional policy months upon payment in advance to the employer of the full group premium for this continuation of coverage, including any portion of the premium usually paid by the person's former employer on or before the beginning of each month's coverage.   At the end of the period of continuation, the person shall be entitled to have issued to the person by the insurer a policy of health insurance that conforms to the applicable requirements specified in this chapter.   An employee or member shall not be entitled to have coverage continued if the group policy was terminated in its entirety or was terminated with respect to an insured class of which the employee was a member, but the employee shall have the right of conversion upon termination of the group policy. An employee or member shall not be entitled to have coverage continued or a converted policy issued to the employee if termination of the employee's insurance under the group policy occurred because:  The employee failed to pay any required contribution;   The employee is eligible for medicare under Title XVIII of the federal Social Security Act (42 U.S.C.  1395 et seq.); or   Any discontinued group coverage was replaced by similar group coverage within thirty-one (31) days.      This section shall apply to individuals who are terminated from group coverage because of divorce or because of the death of the insured spouse, except that an individual to whom any of the foregoing applies shall be entitled to have the coverage continued under the group policy for the fractional policy month remaining at termination plus up to fifteen (15) additional policy months upon payment in advance to the employer the full month's group premium for this continuation of coverage on or before the beginning of each month's coverage, including any portion of the premium usually paid by the employer. This subsection (d) does not prohibit a group policy from granting a longer period of continued coverage than provided in this subsection (d), nor from offering broader coverage than provided in this subsection (d), nor from granting coverage after the death of the insured spouse as otherwise provided. Individuals whose group coverage is terminated during pregnancy shall be entitled to have their coverage continued under the group policy for the fractional month remaining at termination plus a period of not less than six (6) months after the pregnancy ends and not more than the end of the second three-month period following the three-month period within which the pregnancy ends.   Subdivision (d)(1) is applicable to all health benefits policies, plans, programs or contracts offered by commercial insurance companies, nonprofit insurance companies, prepaid plans, including health maintenance organizations, and to all health benefit programs provided state government employees.     
 Issuance of a converted policy shall be subject to the following conditions:   Written application for the converted policy shall be made and the first premium paid to the insurer not later than thirty-one (31) days after the termination under the group policy;   The converted policy shall be issued without evidence of insurability;   The initial premium for the converted policy for the first twelve (12) months and subsequent renewal premiums shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risk of each person to be covered under the converted policy and to the type and amount of insurance provided;   The effective date of the converted policy shall be the day following the termination of insurance under the group policy; and   The converted policy shall cover the employee or member and the person's dependents who were covered by the group policy on the date of termination of insurance. At the option of the insurer, a separate converted policy may be issued to cover any dependent.   
 The insurer shall not be required to issue a converted policy covering any person if the person is or could be covered by medicare under Title XVIII of the federal Social Security Act (42 U.S.C.  1395 et seq.); furthermore, the insurer shall not be required to issue a converted policy covering any person if:    The person is covered for similar benefits by another hospital, surgical, medical or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or by any other plan or program;   The person is eligible for similar benefits, whether or not covered for the benefits, under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis; or   Similar benefits are provided for or are available to the person, pursuant to or in accordance with the requirements of any state or federal law; and     The benefit provided under the sources referred to in subdivision (1)(A) for the person or benefits provided or available under the sources referred to in subdivisions (1)(B) and (C) for the person, together with the benefits provided by the converted policy, would result in overinsurance according to the insurer's standards. The insurer's standards must bear some reasonable relationship to actual health care costs in the area in which the insured lives at the time of conversion and must be filed with the commissioner prior to their use in denying coverage.   
  A converted policy may include a provision whereby the insurer may request information in advance of any premium due date of the policy of any person covered under the policy as to whether:  The person is covered for similar benefits by another hospital, surgical, medical or major medical expense insurance policy or hospital or medical service subscriber contract or medical practice or other prepayment plan or by any other plan or program;   The person is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis; or   Similar benefits are provided for or available to the person, pursuant to or in accordance with the requirements of any state or federal law.     The converted policy may provide that the insurer may refuse to renew the policy or the coverage of any person insured under the policy for the following reasons only:  Either the benefits provided under the sources referred to in subdivisions (a)(1) and (2) for the person or benefits provided or available under the sources referred to in subdivision (a)(3) for the person, together with the benefits provided by the converted policy, would result in overinsurance according to the insurer's standards on file with the commissioner, or the converted policyholder fails to provide the requested information;   Fraud or material misrepresentation in applying for any benefits under the converted policy;   Eligibility of the insured person for coverage under medicare under Title XVIII of the federal Social Security Act (42 U.S.C.  1395 et seq.), or under any other state or federal law providing for benefits similar to those provided by the converted policy; or   Other reasons approved by the commissioner.     
 An insurer shall not be required to issue a converted policy that provides benefits in excess of those provided under the group policy from which conversion is made.  
 The converted policy shall not exclude a preexisting condition not excluded by the group policy. However, the converted policy may provide that any hospital, surgical or medical benefits payable under the policy may be reduced by the amount of the benefits payable under the group policy after the termination of the individual's insurance under the group policy. The converted policy may also include provisions so that during the first policy year the benefits payable under the converted policy, together with the benefits payable under the group policy, shall not exceed those that would have been payable had the individual's insurance under the group policy remained in force and effect.  
   Subject to the provisions and conditions of  56-7-2312  56-7-2322, the employee or member shall be entitled to obtain a converted policy providing, at the option of the employee or member, coverage on an expense incurred basis under any one (1) of the plans meeting the following requirements:  Plan A:   Hospital room and board daily expense benefits in a maximum dollar amount approximately the average semiprivate rate charged in metropolitan areas of this state, for a maximum duration of seventy (70) days;   Miscellaneous hospital expense benefits of a maximum amount of ten (10) times the hospital room and board daily expense benefits; and   Surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health insurance policies and providing a maximum benefit of eight hundred dollars ($800);     Plan B:   Hospital room and board daily expense benefits in a maximum dollar amount equal to seventy-five percent (75%) of the maximum dollar amount determined for Plan A, for a maximum duration of seventy (70) days;   Miscellaneous hospital expense benefits of a maximum amount of ten (10) times the hospital room and board daily expense benefits; and   Surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health insurance policies and providing a maximum benefit of six hundred dollars ($600); or     Plan C:   Hospital room and board daily expense benefits in a maximum dollar amount equal to fifty percent (50%) of the maximum dollar amount determined for Plan A, for a maximum duration of seventy (70) days;   Miscellaneous hospital benefits of a maximum amount of ten (10) times the hospital room and board daily expense benefits; and   Surgical operation expense benefits according to a surgical schedule consistent with those customarily offered by the insurer under group or individual health insurance policies and providing a maximum benefit of four hundred dollars ($400).       The maximum dollar amounts in Plan A shall be determined by the commissioner and may be redetermined by the commissioner from time to time as to converted policies issued subsequent to the redetermination. The redetermination shall not be made more often than once in three (3) years. The maximum dollar amounts in Plans A, B, and C shall be rounded to the nearest multiple of ten dollars ($10.00).     The insurer may also, in lieu of the plans of benefits set forth in subsection (a), provide alternate plans with benefits exceeding those in Plan A, B, or C, with the approval of the commissioner.   If the benefits level required in subsections (a) and (b) exceeds the benefits level provided under the group policy, the conversion policy may offer benefits that are substantially similar to those provided under the group policy in lieu of those required in subsections (a) and (b).   The insurer may, at its option, also offer alternate plans of group health conversion in addition to those required by this part.   
 In the event coverage would be continued under the group policy on an employee following retirement prior to the time the employee is or could be covered by medicare, the employee may elect, in lieu of the continuation of group insurance, to have the same conversion rights as would apply had the employee's insurance terminated at retirement by reason of termination of employment or membership.  
  The converted policy may provide for reduction of coverage on any person upon the person's eligibility for coverage under medicare under Title XVIII of the federal Social Security Act (42 U.S.C.  1395 et seq.), or under any other state or federal law providing for benefits similar to those provided by the converted policy.   Subject to the conditions set forth in subsection (a), the conversion privilege shall also be available to:  The surviving spouse, if any, at the death of the employee or member, with respect to the spouse and the children whose coverage under the group policy terminates by reason of the death, otherwise to each surviving child whose coverage under the group policy terminates by reason of the death, or, if the group policy provides for continuation of dependents' coverage following the employee's or member's death, at the end of the continuation;   The spouse of the employee or member upon termination of coverage of the spouse, while the employee or member remains insured under the group policy, by reason of ceasing to be a qualified family member under the group policy, with respect to the spouse and the children whose coverage under the group policy terminates at the same time;   A child, solely with respect to the child, upon termination of the child's coverage by reason of ceasing to be a qualified family member under the group policy, if a conversion privilege is not otherwise provided with respect to the termination; and   The spouse of the employee upon termination of coverage of the spouse by reason of termination of coverage of the employee or member because of eligibility for medicare.     
 The insurer may elect to provide group insurance coverage in lieu of the issuance of a converted individual policy.  
 A notification of the conversion privilege shall be included in each certificate of coverage.  
 No group policy of accident and sickness insurance offered for sale in this state shall be issued or renewed by any insurer or hospital service corporation or medical service corporation transacting business in this state that, by the terms of the policy, excludes or reduces the benefits payable or services to be rendered to or on behalf of any insured because benefits have been paid or are also payable under any blanket group or franchise school accident policy regardless of who makes the premium contribution, or under any individually underwritten and individually issued contract or plan of insurance that provides exclusively for accident and sickness benefits and for which one hundred percent (100%) of the premiums have been paid by the insured or a member of the insured's family or the insured's guardian, regardless of the mode or channel of premium payment to the insurer or of any discount received on the premium by virtue of the insured's membership in any organization or of the insured's status as an employee.  
 Under any student accident coverage, regardless of the form of the contract, no provision may be included that reduces the benefits payable on account of the existence of group or individual insurance contracts that provide health insurance coverage on the student; provided, that this section does not apply to any student accident coverage where the school or institution is the policyholder and pays one hundred percent (100%) of the premium for the policy, without receipt of any premium contribution from any individual insured, parent or guardian.  
 Where any policy of insurance, group or individual, issued after July 1, 1973, to school children, contains a provision whereby incurred medical benefits for accidents are payable for a specified number of days following the covered accident and if, during the specified period, written notice is given to the insurance company by the insured, accompanied by a written statement from the insured's licensed physician stating that medical treatment will be required after the termination of the specified period, then the company shall pay the medical expenses that are incurred within one (1) year from the date of the accident causing the loss for benefits as provided by the contract of insurance.  
 A policy or contract for a health benefit plan, as defined in  56-7-2203, that is issued, renewed, or entered into on or after January 1, 2018, and provides coverage for prescription eye drops shall not deny coverage for a refill of a prescription that is a covered benefit under the policy or contract of the insured and is otherwise eligible for a refill if:   The renewal is requested by the insured for a thirty-day supply of the drug at least twenty-three (23) days from:  The original date the prescription was dispensed to the insured; or   The date the most recent refill was dispensed to the insured;     The renewal is requested by the insured for a sixty-day supply of the drug at least forty-five (45) days from:  The original date the prescription was dispensed to the insured; or   The date the most recent refill was dispensed to the insured; or     The renewal is requested by the insured for a ninety-day supply of the drug at least sixty-eight (68) days from:  The original date the prescription was dispensed to the insured; or   The date the most recent refill was dispensed to the insured.     
  This section shall be known and may be cited as the Proton Therapy Access Act.   As used in this section:  Aggregate amount means the total amount paid under the state group insurance program for the applicable radiation treatment delivery CPT codes to deliver a biological effective dose;   Biological effective dose means the total prescribed radiation dose delivered in a course of radiation therapy treatments to induce tumor cell death;   CPT code means the unique numerical designations established by the American Medical Association for various medical, surgical, and diagnostic services used in billing healthcare services;   Eligible patient means a cancer patient who is approved for a standard radiation therapy protocol delivered with IMRT by the state group insurance program's third-party administrator and prescribed a hypofractionated proton therapy protocol for the treatment of the same cancer;   Hypofractionated radiation therapy protocol means a cancer treatment protocol that involves the delivery of fewer, larger radiation therapy treatment doses than a standard radiation therapy protocol to deliver a biological effective dose;   Intensity modulated radiation therapy or IMRT means a type of conformal radiation therapy that delivers x-ray radiation beams of different intensities from many angles for the treatment of tumors;   Proton therapy means the advanced form of radiation therapy that utilizes protons as the radiation delivery method for the treatment of tumors;   Radiation therapy means the delivery of a biological effective dose with proton therapy, IMRT, brachytherapy, stereotactic body radiation therapy, three-dimensional conformal radiation therapy, or other forms of therapy using radiation;   Registry means an organized system that uses observational study methods to collect uniform clinical data to evaluate specified outcomes for a population defined by a particular disease and is compliant with the principles established by the U.S. department of health and human services through their Agency for Healthcare Research and Quality's Registries for Evaluating Patient Outcomes: A User's Guide - Third Edition;   Standard radiation therapy protocol means a cancer treatment protocol that involves the delivery of radiation therapy treatment doses over an extended period of time to deliver a biological effective dose;   State group insurance program means health insurance provided under title 8, chapter 27; and   Treatment dose means the amount of radiation delivered in a single treatment or fraction of radiation therapy.     The state group insurance program shall cover a physician prescribed hypofractionated proton therapy protocol to deliver a biological effective dose by paying the same aggregate amount as would be paid for the delivery of the same biological effective dose with a standard radiation therapy treatment protocol delivered with IMRT for the same indication if the following conditions are satisfied:  Coverage is provided to an eligible patient who is being treated as part of a clinical trial or registry;   The eligible patient is diagnosed with a cancer type or indication that can be treated with a hypofractionated proton therapy protocol;   The radiation oncologist prescribing the hypofractionated proton therapy protocol is board certified or board eligible in the specialty of radiation oncology; and   The hypofractionated proton therapy protocol is administered in a facility in this state.     If coverage of the hypofractionated proton therapy protocol is required pursuant to subsection (c), then:  The aggregate amount must be equal to the average cost actually paid by the state group insurance program for a standard IMRT treatment radiation therapy protocol required to deliver the prescribed biological effective dose for the particular indication. For purposes of this subdivision (d)(1), aggregate amounts must be established by reference to the amount paid for a course of IMRT treatment under a standard IMRT radiation therapy protocol for the indication under the state group insurance program; and   Coverage is subject to annual deductible and co-insurance established for radiation therapy and other similar benefits within the policy or contract of insurance. The annual deductible and co-insurance for any radiation therapy delivery method permitted by this section must be no greater than the annual deductible and co-insurance established for all other similar benefits within a policy or contract of insurance.     Notwithstanding any other provision of this section to the contrary, the aggregate amount:  Reimbursed for the hypofractionated proton therapy protocol must not exceed the average aggregate amount paid by the state group insurance program for a course of IMRT treatment under a standard IMRT radiation therapy protocol to deliver the prescribed biological effective dose for the same indication;   Chargeable to or payable by an eligible patient for a covered course of hypofractionated proton therapy by an in-network provider must not exceed the aggregate amount that would otherwise be chargeable to or payable by the eligible patient for a course of IMRT treatment under a standard IMRT radiation therapy protocol that is covered by the state group insurance program for the delivery of the same biological effective dose by an in-network provider; and   Chargeable to or payable by an eligible patient for a covered course of hypofractionated proton therapy by an out-of-network provider must not exceed the aggregate amount that would otherwise be chargeable to or payable by the eligible patient for a course of treatment under a standard IMRT radiation therapy protocol that is covered by the state group insurance program for the delivery of the same biological dose by an out-of-network provider. However, the patient is not responsible for amounts above the allowable maximum charge.     Notwithstanding  56-7-1005, this section applies only to the state group insurance program.   This section supplements the requirements of 42 U.S.C.  300gg-8.   
  Notwithstanding any other law to the contrary, any individual, franchise, blanket or group policy issued pursuant to this title or any medical service plan, contract, hospital service corporation contract, hospital and medical service contract, fraternal benefit society or health maintenance organization that provides hospital expense insurance, surgical expense insurance, medical or major medical services insurance and that is entered into, delivered, issued for delivery, or renewed, excepting individual insurance policy renewal, by agreement or otherwise, beginning January 1, 1994, shall provide benefits for minor children who are by court order in the custody of a guardian who is a resident of this state covered under any such policy or plan issued to or on behalf of the guardian, unless the policy or plan specifically excludes or reduces the benefits.   This section shall not apply to policies that provide only hospital indemnity benefits or to policies that provide only benefits for specified accidents or specified diseases.   Any increase in expenditure requirements on a municipality or a county resulting from this section shall be appropriated from funds that the municipality or county receives from the state-shared taxes that are not earmarked by statute for a particular purpose.   
  All entities providing health care benefits, including, but not limited to, insurers, ERISA group health plans, health maintenance organizations and nonprofit hospital and medical service plans, are prohibited from considering the availability or eligibility for medical assistance under 42 U.S.C.  1396a, which is referred to as medicaid, when considering eligibility for coverage or calculating payments under their plans for eligible enrollees, subscribers, policyholders, or certificate holders.   To the extent that payment for covered expenses has been made under the state medicaid program for health care items or services furnished to an individual, the state is considered to have acquired the rights of the individual to payment by any other party for the health care items or services. Upon presentation of proof that the state medicaid program or any provider who has contracted with the state to provide medicaid services has paid for covered items or services, the insurer, ERISA group health plan, health maintenance organization, or nonprofit hospital and medical service plan shall make payment to the state medicaid program, or contracted provider under the medicaid program according to the coverage provided in the policy or contract on the same basis applicable to an agent or assignee of any other individual so covered.   
  This section shall be known and may be cited as the Patients' Right to Truth Act of 1996.   Each managed care organization, health maintenance organization or preferred provider organization, referred to as the plan in this section, shall not in any way restrict medical personnel regarding informing patients of alternative medical care, treatments, programs or pharmaceuticals that may be available to the enrollee or participant, regardless of whether covered by the plan or not.   A violation of this section is punishable by payment of a civil penalty of not more than one thousand dollars ($1,000) for each violation, but not to exceed an aggregate penalty of ten thousand dollars ($10,000), unless the person knew or reasonably should have known the person was in violation of this section, in which case the penalty is not more than five thousand ($5,000) for each violation, but not to exceed an aggregate penalty of fifty thousand dollars ($50,000) in any six-month period.   
  The general assembly finds that Tennesseans are increasingly concerned that mothers and newborns receive proper medical care prior to hospital discharge. The general assembly further finds that the lack of proper medical care jeopardizes the health, safety and well-being of the mothers and newborns and may result in serious, costly repercussions not only for the mothers and newborns but also for the entire state. The general assembly, therefore, finds and declares the existence of an immediate and substantial threat to the public health, safety and welfare. The general assembly acknowledges and endorses the recently promulgated emergency rules of the departments of finance and administration and commerce and insurance to timely address these important concerns.   In accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, the departments are authorized to promulgate permanent rules establishing minimum standards of coverage for maternity benefits offered by insurers. The rules will establish standards sufficient to protect and promote the health, safety and well-being of both the post-partum mother and the newborn and recognize the relationship between the mother and physician.   
 Any individual and group health insurance policy providing coverage on an expense incurred basis or any individual and group service or indemnity type contract issued by a nonprofit corporation or the TennCare program that provides coverage for pregnancy and/or maternity benefits may not be cancelled or terminated due to pregnancy of an enrollee in the plan. If and only if a person or the person's spouse is pregnant at the time the health insurance coverage is initially purchased, then at the time of the purchase, pregnancy and/or maternity benefits for the current pregnancy may be denied as a preexisting condition. This section shall apply to any person who should have been entitled to coverage for the benefits on or after January 1, 1996.  
  The general assembly finds and declares the following:  The citizens of this state rely upon health insurance to cover the cost of obtaining health care;   It is essential that the citizens' expectation that their health care costs will be paid by their insurance policies is not disappointed and that they obtain the coverage necessary and appropriate for their care within the terms of their insurance policies;   Some insurers deny payment for drugs that have been approved by the federal food and drug administration (FDA) when the drugs are used for indications other than those stated in the labeling approved by the FDA, known as off-label use, while other insurers with similar coverage terms do pay for off-label use;   Denial of payment for off-label use can interrupt or effectively deny access to necessary and appropriate treatment for a person being treated for a life-threatening illness;   Equity among employers who obtain insurance coverage for their employees and fair competition among insurance companies require that insurance companies assure citizens reimbursement for drugs in the same way and in the way citizens expect;   Off-label use of an FDA-approved drug is legal when prescribed in a medically appropriate way and is often necessary to provide needed care. Approximately fifty percent (50%) of cancer drug treatment is for off-label indications. The FDA and the federal department of health and human services recognize the wide variety of effective uses of FDA-approved drugs for off-label indications. Information on the appropriate off-label use of FDA-approved drugs is obtained from compendia published by the United States Pharmacopeial Convention, the American Medical Association, and the American Society of Hospital Pharmacists. In addition, scientific studies of off-label use of drugs published in recognized peer-reviewed professional journals provide information on appropriate use of drugs for off-label indications. The Omnibus Budget Reconciliation Act of 1990 recognizes these three (3) compendia and peer-reviewed literature as appropriate sources for reimbursement, and requires medicaid agencies to pay for off-label use of drugs prescribed for medicaid patients if the use is stated in any of these sources. The Omnibus Budget Reconciliation Act of 1993 applies the same criteria and coverage to medicare patients. Twenty (20) states have also passed similar legislation, most based on uniform legislation. The National Association of Insurance Commissioners has also adopted a model act based on the ACCC model legislation;   Use of FDA-approved drugs for off-label indications provides efficacious drugs at a lower cost. To require that all appropriate uses of a drug undergo approval by the FDA would substantially increase the cost of drugs, delay or even deny patients' ability to obtain medically effective treatment. FDA approval for each use would require substantial expenditure and time to undergo the clinical trials necessary to obtain FDA approval. This is particularly the case when a drug is off-patent and in generic production, and consequently is available at a lower price. Once a drug is in generic production by multiple manufacturers, it is not economically feasible for a manufacturer to incur the cost of FDA approval;   Reimbursement for off-label indications of FDA-approved drugs is necessary to conform to the way in which appropriate medical treatment is provided, to make needed drugs available to patients, and to contain health care costs; and   This section shall not apply to a governmentally funded health care program, if the program requires the provision of medically necessary services.     As used in this section, unless the context requires otherwise:  Insurance policy means any individual, group, or blanket policy written by a medical expense indemnity corporation, a hospital service corporation, a health care service plan contract, or a private insurance plan issued, amended, delivered or renewed in this state, or that provides such insurance for residents of this state;   Medical literature means published scientific studies published in any peer-reviewed national professional journal; and   Standard reference compendia means:  The United States Pharmacopeia Drug Information;   The American Medical Association Drug Evaluations;   The American Hospital Formulary Service Drug Information;   The National Comprehensive Cancer Network Drugs and Biologics Compendium;   The Thomson Micromedex DrugDex; or   The Gold Standard/Elsevier Clinical Pharmacology.        No insurance policy or contract regulated under this title that provides coverage for drugs shall exclude coverage of any such drug for a particular indication on the ground that the drug has not been approved by the FDA for that indication, if the drug is recognized for treatment of the indication in one (1) of the standard reference compendia, or in the medical literature; provided, that nothing in this section shall be construed to authorize the commissioner of health to approve any drug or direct any person that issues an insurance policy to make payments for the drug for a particular indication unless the drug is recognized for treatment of the indication in one (1) of the standard reference compendia or in the medical literature.   Any coverage of a drug required by this section shall also include medically necessary services associated with the administration of the drug.   This section shall not be construed to alter existing law with regard to provisions limiting the coverage of drugs that have not been approved by the FDA.   This section shall not be construed to require coverage for any drug when the FDA has determined its use to be contra-indicated.   This section shall not be construed to require coverage for experimental drugs not otherwise approved for any indication by the FDA.   Any dispute about coverage for off-label uses brought to the commissioner of health shall be resolved by the appropriate court-approved grievance process authorized by the department.   The commissioner of health shall have the authority to direct any person who issues an insurance policy to make payments required by this section.     
  Any accident or sickness insurance or hospital, medical service contract or policy under this chapter or chapter 26, 27, 28, 29 or 32 of this title that takes effect on or after July 1, 1997, shall provide for reimbursement of anesthesia expenses, hospital expenses and physician expenses associated with any inpatient/outpatient hospital dental procedure where:  The expense is covered under the contract or policy; and   The procedure is performed on a minor eight (8) years of age or younger and cannot be safely performed in a dental office setting.     The benefit provided for by this section shall be subject to the same annual deductibles or co-insurance established for all other covered benefits within a given plan, policy or contract. Private third party payors may not reduce or eliminate coverage due to the requirements of this section. Nothing contained in this section shall be construed as applying to medical assistance programs funded with state and federal funds, if the programs require provision of services as medically necessary.   
  Every contract that provides for hospital, surgical or medical care shall provide, upon the recommendation of a physician, coverage for the early detection of prostate cancer for men fifty (50) years of age and older and other men if a physician determines that early detection for prostate cancer is medically necessary. Nothing contained in this section shall be construed as applying to medical assistance programs funded with state and federal funds, if the programs require the provision of services as medically necessary.   Nothing in this section shall apply to accident only, specified disease, hospital indemnity, medicare supplement, long-term care or other limited benefit health insurance policies.   
  As used in this section, unless the context otherwise requires:  Emergency medical condition means a medical condition that manifests itself by symptoms of sufficient severity, including severe pain, that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to potentially result in:  Placing the person's health in serious jeopardy;   Serious impairment to bodily functions; or   Serious dysfunction of any bodily organ or part.     Emergency services means health care items and services furnished in a hospital that are required to determine, evaluate and/or treat an emergency medical condition, until the condition is stabilized, as directed or ordered by a physician or directed by physician or hospital protocol;   Health benefit plan means any hospital or medical expense policy, health, hospital or medical service corporation contract, a policy or agreement entered into by a health insurer or a health maintenance organization contract offered by an employer, other plans administered by the state government, or any certificate issued under the policies, contracts or plans. Health benefit plan does not include policies or certificates covering only accident, credit, dental, disability income, long-term care, hospital indemnity, medicare supplement as defined in  1882(g)(1) of the Social Security Act (42 U.S.C.  1395ss(g)(1)), specified disease, vision care, other limited benefit health insurance, coverage issued as a supplement to liability insurance, workers' compensation insurance, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and that is statutorily required to be contained in any liability insurance policy or equivalent self-insurance;   Health insurer means any entity offering a health benefit plan;   Participating provider means a provider who, under a contract with the health insurer or with its contractor or subcontractor, has agreed to provide one (1) or more health care services to enrollees of the health insurer's health benefit plan with an expectation of receiving payment, other than coinsurance, copayments or deductibles, directly or indirectly from the health insurer;   Physician means a person licensed or permitted to practice medicine and surgery under title 63, chapter 6 or 9;   Provider means a physician, hospital or other person licensed, accredited or certified to perform specified health care services pursuant to title 63, chapter 6 or 9, or title 68; and   Stabilized means, with respect to an emergency medical condition, that no material deterioration of the condition is likely, within a reasonable medical probability, to result from or occur during the transfer of the individual from a facility.      A health benefit plan shall not deny coverage for emergency services if the symptoms presented by an enrollee of a health benefit plan and recorded by the attending provider indicate that an emergency medical condition could exist, regardless of whether or not prior authorization was obtained to provide those services and regardless of whether or not the provider furnishing the services has a contractual agreement with the health benefit plan for the provision of the services to the enrollee.   If a participating provider or other authorized representative of a health insurer authorizes emergency services, the health insurer shall not subsequently rescind or modify that authorization after the provider renders the authorized care in good faith and pursuant to the authorization except for payments made as a result of misrepresentation, fraud, omission or clerical error.   Once an enrollee is stabilized pursuant to subdivision (a)(8), a health benefit plan may require as a condition of further coverage that a provider promptly contact the health insurer for prior authorization for continuing treatment, specialty consultations, transfer arrangements or other medically necessary and appropriate care for an enrollee.   Coverage of emergency services shall be subject to applicable copayments, coinsurance and deductibles.     
   Each managed health insurance issuer that offers a plan that limits its enrollees' choice of providers shall maintain a network that is sufficient in numbers and types of providers to assure that all covered benefits to covered persons will be accessible without unreasonable delay. In the case of emergency services, covered persons shall have access to health care services twenty-four (24) hours per day, seven (7) days per week. Sufficiency shall be determined in accordance with the requirements of this section and may be established by reference to network adequacy standards established by the managed health insurance issuer, specifically:  Primary care provider-covered person ratios; and   Geographic accessibility;     The network adequacy standards description shall be filed with the commissioner and updated annually.     In addition to establishing the standards required pursuant to subsection (a), the managed health insurance issuer's network shall demonstrate the following:  An adequate number of acute care hospital services, within a reasonable distance or travel time;   An adequate number of primary care providers within not more than thirty (30) miles distance or thirty (30) minutes travel time at a reasonable speed;   An adequate number of specialists and subspecialists, within a reasonable distance or travel time;   A comprehensive listing, made available to covered persons and health care providers, of the plan's network participating providers and facilities, and the listing shall be supplemented to show additions and deletions, if any exist, at least annually;   The procedures for making referrals within and outside its network that, at a minimum, shall include the following:  A process for expediting the referral process when indicated by a medical condition; and   A provision that referrals approved by the plan cannot be retrospectively denied except for fraud or abuse, subject to the eligibility and coverage provisions of the contract;     The process for monitoring and assuring on an ongoing basis the sufficiency of the network to meet the health care needs of populations that enroll in plans;   The quality assurance standards, adequate to identify, evaluate, and remedy problems relating to access, continuity, and quality of care;   The system for ensuring the coordination of care for covered persons receiving approved care from specialty providers; and   Any other information required by the commissioner to determine compliance with this part.     In any case where the managed health insurance issuer has no participating providers to provide a covered benefit, the managed health insurance issuer shall arrange for a referral to a provider with the necessary expertise and ensure that the covered person obtains the covered benefit at no greater cost to the covered person than if the benefit were obtained from a network provider.   In determining whether a managed health insurance issuer has complied with this section, consideration shall be given to the relative availability of health care providers, specialists and subspecialists in the service area under consideration. Relative availability includes the acceptance by the health care providers, specialists or subspecialists of the terms, conditions and fees offered under the contract or plan. A network shall not be deemed inadequate solely because the network does not include a provider, specialist or subspecialist who is the sole provider in the community, if the provider, specialist or subspecialist refuses to contract with the managed health insurance issuer on terms and conditions substantially similar to providers, specialists or subspecialists in contiguous communities.   Health care providers who participate in a managed health insurance issuer's plan shall provide timely appointments to patients and shall see the patients on a timely basis after arrival for an appointment. A managed health insurance issuer may include in its contracts with health care providers provisions that establish the meaning of timeliness.   Providers who do not participate in a managed health insurance issuer's plan but seek reimbursement through the point of service option mandated in  56-32-128 shall have the obligation to provide appointments on a timely basis and, upon arrival for appointments, the provider shall see the patient on a timely basis; provided, that timeliness shall be consistent with usual and customary standards for the community in which the provider is located. Frequent and repetitive failure to comply with this subsection (f) may be cause for the managed health insurance issuer to withhold reimbursement from the nonparticipating provider.   
  If a provider who is a member of a managed health insurance issuer's network terminates its agreement with the issuer, or the issuer terminates the provider without cause, then the provider and issuer shall allow a subscriber or enrollee who is:  Under active treatment for a particular injury or sickness, to continue to receive covered benefits from the treating provider for the injury or sickness for a period of one hundred twenty (120) days from the date of notice of termination;   In the second trimester of pregnancy to continue care with a treating provider until completion of postpartum care; and   Being treated at an inpatient facility to remain at the facility until the patient is discharged.     Subsection (a) shall apply only if the treating provider or inpatient facility agrees to continue to be bound by the terms, conditions and reimbursement rates of the provider's agreement with the issuer.   
  No health insurance issuer and no managed health insurance issuer may:  Deny any licensed pharmacy or licensed pharmacist the right to participate as a participating provider in any policy, contract or plan on the same terms and conditions as are offered to any other provider of pharmacy services under the policy, contract or plan; provided, that nothing in this subdivision (a)(1) shall prohibit a managed health insurance issuer or health insurance issuer from establishing rates or fees that may be higher in nonurban areas, or in specific instances where a managed health insurance issuer or health insurance issuer determines it necessary to contract with a particular provider in order to meet network adequacy standards or patient care needs; and   Prevent any person who is a party to or beneficiary of any policy, contract or plan from selecting a licensed pharmacy of the person's choice to furnish the pharmaceutical services offered under any contract, policy or plan; provided, that the pharmacy is a participating provider under the same terms and conditions of the contract, policy or plan as those offered any other provider of pharmacy services.     Notwithstanding any provision of this chapter to the contrary, a health insurance issuer or managed health insurance issuer may restrict an abusive or heavy utilizer of pharmacy services to a single pharmacy provider for nonemergency services, so long as the individual to be restricted has been afforded the opportunity to participate in the process of selection of the pharmacy to be used, or has been given the right to change the pharmacy to be used to another participating provider of pharmacy services prior to the restriction becoming effective. After a restriction is effective, the individual so restricted shall have the right to change a pharmacy assignment based on geographic changes in residence or if the member's needs cannot be met by the currently assigned pharmacy provider.   If a managed health insurance issuer or health insurance issuer revises its drug formulary to remove a drug from a previously approved formulary, the health insurance issuer or managed health insurance issuer shall allow a subscriber or enrollee an opportunity to file a grievance relative to the decision to remove the drug. The grievance must be filed within sixty (60) days after notification to the provider that the drug is being removed. If the grievance is filed with a managed health insurance issuer or health insurance issuer within ten (10) days after the subscriber or enrollee knows or should have known that the drug is being removed, the subscriber or enrollee may continue to receive the drug that is being removed from the formulary until the managed health insurance issuer or health insurance issuer completes the grievance process. This subsection (c) shall not apply to any drug removed from a previously approved formulary when the reason for the removal is due to patient care concerns or other potentially detrimental effects of the drug. Nothing contained in this section shall be construed or interpreted as applying to the TennCare programs administered pursuant to the waivers approved by the federal department of health and human services.   As used in this section, managed health insurance issuer has the same meaning as defined in  56-32-128(a).   Each health insurance issuer or managed health insurance issuer shall apply the same coinsurance, co-payment, deductible and quantity limit factors within the same employee group and other plan-sponsored groups to all drug prescriptions filled by any licensed pharmacy provider, whether by a retail provider or a mail service provider; provided, that all pharmacy providers comply with the same terms and conditions. Nothing in this section shall be construed to prohibit the health insurance issuer or managed health insurance issuer from applying different co-insurance, co-payment, and deductible factors within the same employer group and other plan-sponsored groups between generic and brand-name drugs nor prohibit an employer or other plan-sponsored group from offering multiple options or choices of health insurance benefit plans, including, but not limited to, cafeteria benefit plans.   
   As used in this section, unless the context otherwise requires:  Aggregate lifetime limit means a dollar limitation on the total amount that may be paid for benefits under a health plan with respect to an individual or other coverage unit;   Annual limit means a dollar limitation on the total amount that may be paid for benefits in a twelve-month period under a health plan with respect to an individual or other coverage unit;   Classification of benefits means inpatient in-network benefits, inpatient out-of-network benefits, outpatient in-network benefits, outpatient out-of-network benefits, prescription drug benefits, and emergency care benefits. These classifications of benefits are the only classifications that may be used except that there may be sub-classifications within both outpatient classifications differentiating office visits from other outpatient items and services, including outpatient surgery, facility charges for day treatment centers, laboratory charges, and other medical items;   Financial requirement includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit and an annual limit;   Health benefit plan means any hospital or medical expense policy, health, hospital, or medical service corporation contract, a policy or agreement entered into by a health insurer or a health maintenance organization contract offered by an employer, other plans administered by the state government, or any certificate issued under the policies, contracts, or plans;   Health insurance carrier means any entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner of commerce and insurance, that contracts with healthcare providers in connection with a plan of health insurance, health benefits, or health services;   Mental health or alcoholism or drug dependency benefits means benefits for the treatment of any condition or disorder that involves a mental health condition or substance use disorder that falls under any of the diagnostic categories listed in the mental disorders section of the current edition of the International Classification of Disease or that is listed in the mental disorders section of the most recent version of the Diagnostic and Statistical Manual of Mental Disorders;   Non-quantitative treatment limitations, or NQTLs, are limitations that are not expressed numerically, but otherwise limit the scope or duration of benefits for treatment. For purposes of this subdivision (a)(1)(H), fail-first or step therapy protocols do not include formulary designs that require the prescription, use, and a showing of ineffectiveness of generic drugs prior to approval of payment for the prescription of higher cost drugs. NQTLs include, but are not limited to:   Medical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative;   Formulary design for prescription drugs;   Tier design for plans with multiple network tiers, including preferred providers and participating providers, and network tier design;   Standards for provider admission to participate in a network, including reimbursement rates;   Plan methods for determining usual, customary, and reasonable charges;   Refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective, that are also known as fail-first policies or step therapy protocols;   Exclusions based on failure to complete a course of treatment;   Restrictions based on geographic location, facility type, provider specialty, and other criteria that limit the scope or duration of benefits for services provided under the plan or coverage;   In- and out-of-network geographic limitations;   Standards for providing access to out-of-network providers;   Limitations on inpatient services for situations where the participant is a threat to self or others;   Exclusions for court-ordered and involuntary holds;   Experimental treatment limitations;   Service coding; and   Exclusions for services provided by clinical social workers;     Predominant means application to more than one-half (12) of such type of limit or requirement;   Substantially all means application to at least two-thirds (2/3) of all medical or surgical benefits in a classification; and   Treatment limitation includes limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.     In addition to any other requirement of law concerning coverage of mental health or mental illness benefits or alcoholism or drug dependency benefits, including, but not limited to,  56-7-2601 and 56-7-2602, any individual or group health benefit plan issued by a health insurance carrier regulated pursuant to this title shall provide coverage for mental health or alcoholism or drug dependency services in compliance with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (Pub. L. No. 110-343) found at 42 U.S.C.  300gg-26 and its implementing regulations found at 45 CFR  146.136 and 45 CFR  147.160.     Nothing in subsection (a) prohibits an employee health benefit plan, or a plan issuer offering an individual or group health plan from utilizing managed care practices for the delivery of benefits required under this section, as long as that for any utilization review or benefit determination for the treatment of alcoholism or drug dependence the clinical review criteria is the most recent Treatment Criteria for Addictive, Substance-Related, and Co-Occurring Conditions established by the American Society of Addiction Medicine or other evidence-based clinical guidelines, such as those referenced by the federal substance abuse and mental health services administration (SAMHSA). No additional criteria other than in this subsection (b) may be used during utilization review or benefit determination for treatment of substance use disorders.   The mandate to provide coverage for mental health services does not apply with respect to a group health plan if the application of the mandate to the plan results in an increase in the cost under the plan of more than one percent (1%). Documentation of the increase in cost must be filed with the department after twelve (12) months of experience. If the commissioner determines that the increase in cost is a result of the requirements of this section, the commissioner or the commissioner's designee shall issue a letter to the issuer of the plan stating that the plan does not have to comply with the mandate set out in this section. The issuer may appeal the letter as final agency action pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   The department of commerce and insurance shall implement and enforce applicable provisions of the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, this section, and  56-7-2601 and 56-7-2602, which include:  Ensuring compliance by individual and group health benefit plans;   Detecting possible violations of the law by individual and group health benefit plans;   Accepting, evaluating, and responding to complaints regarding such violations; and   Maintaining and regularly reviewing for possible parity violations a publicly available consumer complaint log regarding mental health or alcoholism or drug dependency coverage; provided, that individually identifiable information shall be excluded.     Not later than January 31, 2020, the department shall issue a report to the general assembly and provide an educational presentation to the general assembly. The report and presentation shall:  Discuss the methodology the department is using to check for compliance with the MHPAEA, and any federal regulations or guidance relating to the compliance and oversight of the MHPAEA, including 45 CFR 146.136;   Discuss the methodology the department uses to check for compliance with this section and  56-7-2601 and 56-7-2602;   Identify market conduct examinations conducted or completed during the preceding twelve-month period regarding compliance with parity in mental health or alcoholism or drug dependency benefits under state and federal laws and summarize the results of such market conduct examinations. Individually identifiable information shall be excluded from the reports consistent with federal privacy protections, including, but not limited to, 42 U.S.C.  290dd-2 and regulations found at 42 CFR  2.1 through 42 CFR  2.67. This discussion shall include:  The number of market conduct examinations initiated and completed;   The benefit classifications examined by each market conduct examination;   The subject matter of each market conduct examination, including quantitative and non-quantitative treatment limitations; and   A summary of the basis for the final decision rendered in each market conduct examination;     Detail any educational or corrective actions the department of commerce and insurance has taken to ensure health benefit plan compliance with this section, the MHPAEA, 42 U.S.C.  18031(j), and  56-7-2601 and 56-7-2602;   Detail the department's educational approaches relating to informing the public about mental health or alcoholism or drug dependence parity protections under state and federal law; and   Describe how the department examines any provider or consumer complaints related to denials or restrictions for possible violations of this section, the MHPAEA, 42 U.S.C.  18031(j), and  56-7-2601 and 56-7-2602, including complaints regarding, but not limited to:  Denials of claims for residential treatment or other inpatient treatment on the grounds that such a level of care is not medically necessary;   Claims for residential treatment or other inpatient treatment that were approved but for a fewer number of days than requested;   Denials of claims for residential treatment or other inpatient treatment because the beneficiary had not first attempted outpatient treatment, medication, or a combination of outpatient treatment and medication;   Denials of claims for medications such as buprenorphine or naltrexone on the grounds that they are not medically necessary;   Step therapy requirements imposed before buprenorphine or naltrexone is approved; and   Prior authorization requirements imposed on claims for buprenorphine or naltrexone, including those imposed because of safety risks associated with buprenorphine.       The report issued pursuant to subsection (e) must be written in non-technical, readily understandable language and shall be made available to the public by posting the report on the department's website and by other means as the department finds appropriate. The name and identity of the health insurance carrier must be given confidential treatment, may not be made public by the commissioner or any other person, and shall not be subject to public inspection pursuant to  10-7-503.   Benefits under this section shall not be denied for care for confinement provided in a hospital owned or operated by this state that is especially intended for use in the diagnosis, care, and treatment of psychiatric, mental, or nervous disorders.   Nothing in this section applies to accident-only, specified disease, hospital indemnity, medicare supplement, long-term care, or other limited benefit hospital insurance policies.   The commissioner is authorized to promulgate rules to effectuate the purposes of this section. The rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   Nothing in this section shall be construed as requiring the disclosure of any information that would violate 42 U.S.C.  290dd-2 and regulations found at 42 CFR  2.1 through 42 CFR  2.67.   
  Every health benefit plan that provides coverage for prescription drugs or devices or services, or administers such a plan, including, but not limited to, health maintenance organizations, third party administrators for self insured plans and state administered plans, shall issue to each insured a card or other technology containing standardized pharmacy benefit identification information. The card shall contain at a minimum the following information:  The health benefit plan's name and issuer identifier;   The American National Standards Institute Issuer Identification Number assigned to the administrator or pharmacy benefit manager of the plan, when required for proper claims adjudication;   The processor control number, when required for proper claims adjudication;   The insured's group number, when required for proper claims adjudication;   The insured's identification number;   The insured's name; and    The names of all other persons included under the subscriber's coverage and individual identification number information if applicable and required for pharmacy claims processing; or   If a separate card is issued for each person included under the subscriber's coverage, the name of the covered person for whom the card is issued may be listed in lieu of the information required by subdivision (a)(7)(A).       This section does not require a health benefit plan to issue an identification card separate from any identification card issued to an enrollee to evidence coverage, under the health benefit plan, if the identification card contains the elements required by subsection (a).   The Health Insurance Portability and Accountability Act (HIPAA) adopted identifiers may be used in lieu of any element listed in subsection (a) at such time that use of such HIPAA identifier is adopted as the standard.   So as to ensure that insurance identification cards issued under this section contain accurate and updated information, each insurer shall provide each subscriber with a new insurance identification card within a reasonable time whenever the American National Standards Institute Issuer Identification Number, the group number or the processor control number is changed.   As used in this section, health benefit plan means an accident and health insurance policy or certificate, a nonprofit hospital or medical service corporation contract, a health maintenance organization subscriber contract or a plan provided by a multiple employer welfare arrangement. Without limitation, health benefit plan does not mean any of the following types of insurance:  Accident;   Credit;   Disability income;   Specified disease coverage issued as a supplement;   Dental or vision;   Coverage issued as a supplement to liability insurance;   Medical payments under automobile or homeowners;   Insurance under which benefits are payable with or without regard to fault and this is statutorily required to be contained in any liability policy or equivalent self-insurance;   Hospital income or indemnity; or   Long-term care.     
   If authorization is given and a pharmacy claim is adjudicated by a health insurer or its agent to any pharmacy services provider for care to be delivered to a covered beneficiary under any individual, franchise, blanket or group health insurance policy, medical service plan corporation contract, hospital service corporation contract, hospital and medical service corporation contract or fraternal benefit society, the health insurer acting directly or by delegation through an agent acting on behalf of the health insurer shall not subsequently rescind or modify that authorization or deny the authorized payment to the pharmacy services provider for the authorized service after the provider renders the authorized service in good faith and pursuant to the authorization, except for payments made as a result of the provider's misrepresentation or fraud.   If the bureau of TennCare provides notice to the health insurer or its agent that a person is eligible to participate in the TennCare program, and, if based on good faith reliance on the information, the health insurer makes a payment to a pharmacy provider for providing pharmacy services to the person enrolled in the TennCare program, and, if the bureau of TennCare later rescinds the eligibility for the person, then the bureau of TennCare shall remain liable to the health insurer for any amount the health insurer paid to the provider for the pharmacy services. The bureau of TennCare shall not be liable when the eligibility is rescinded in the case of fraud or death as defined in the contract. The bureau of TennCare shall not be liable due to an error or delay on the part of the managed care organization or its agents in processing eligibility information received from the bureau of TennCare.     Notwithstanding subsection (a), any organization may request the pharmacy to adjust or correct an adjudicated claim to correct incorrect data elements, including incorrect billing units, incorrect national drug code (NDC) numbers and incorrect prescriber identification numbers submitted in error and in good faith by the pharmacy. An organization shall provide the pharmacy an opportunity to correct claims submitted by the pharmacy in good faith. If the pharmacy does not correct the adjudicated claim requested within thirty (30) days of receipt of the request, then the organization may rescind, modify or recoup the funds paid on the requested claim and shall not be in violation of this section.   
  All individual and group health insurance policies providing coverage on an expense incurred basis, individual and group service contracts issued by a health maintenance organization, all self-insured group arrangements to the extent not preempted by federal law and all managed health care delivery entities of any type or description, that are delivered or issued on or after January 1, 2004, in this state shall include, or shall offer to prospective policyholders and existing policyholders on renewal, as an optional benefit, coverage for colorectal cancer examinations and laboratory tests specified in current American Cancer Society guidelines or federal Preventive Services Task Force guidelines for colorectal cancer screening of asymptomatic individuals.   The benefits required by this section shall be subject to the annual deductible and co-insurance established for all other similar benefits within the policy or contract; provided, that the annual deductible and co-insurance for the benefits required by this section are no greater than the annual deductible and co-insurance established for all other similar benefits within that policy or contract of insurance.   Nothing in this section shall apply to the TennCare program administered pursuant to the waivers approved by the federal department of health and human services, to accident-only, specified disease, hospital indemnity, medicare supplement, long-term care or other limited benefit health insurance policies, or to any health benefit that is individually underwritten.   
  Notwithstanding any other law to the contrary, any insurer providing individual, franchise, blanket or group policy of insurance issued pursuant to this title, medical service plan, contract, hospital service corporation contract, hospital and medical service corporation contract, fraternal benefit society, health maintenance organization, preferred provider organization or managed care organization, that provides hospital expense and surgical or medical expense insurance or that is entered into, delivered, issued for delivery or renewed in this state after January 1, 2004, may offer to provide reimbursement coverage for medication counseling the insured receives from a pharmacist pursuant to this section.    An insured who is prescribed and uses six (6) or more types of medication may be entitled to receive two (2) medication counseling sessions during the first year the patient begins the sessions, with a doctor of pharmacy licensed in accordance with title 63, chapter 10, part 4, who has received additional clinical training in the areas of medication management and counseling. The goal of the counseling shall be to reduce the number of unnecessary medications for patients, and to reduce the incidence of negative interactions among various medications a patient may be taking. The first medication counseling session shall consist of the following:  An examination of the patient's medical history;   An evaluation of the number and types of medications the patient uses, including over-the-counter medications;   A determination of the types of interactions among the medications;   A recommended medication therapy and thorough analysis of the benefit of the medication therapy;   An evaluation of the cost savings gained as a result of any changes made to the prescribed course of medication; and   A summary of expected outcomes and proposed follow-up examination dates.     A report and recommendation from the first counseling session shall be forwarded to the prescribing physician or physicians for review. The physician may implement the recommendations or may disapprove the recommendations.   The second medication counseling session shall be a follow-up session during which the patient's response to the medication therapy will be monitored.     Both the first and second counseling sessions during the first year may be reimbursable through the patient's insurance coverage. The patient or the pharmacist may request an additional counseling session upon providing verification to the insurer that the patient has developed a change in the patient's medical condition.   
  As used in this section, unless the context otherwise requires:  Health benefit plan means any hospital or medical expense policy, health, hospital or medical service corporation contract, a policy or agreement entered into by a health insurer or health maintenance organization contract offered by an employer, but does not include individually underwritten health insurance policies, or policies or certificates covering only accident, credit, dental, disability income, long-term care, hospital indemnity, medicare supplement as defined in  1882(g)(1) of the Social Security Act (42 U.S.C.  1395ss(g)(1)), specified disease, vision care, other limited benefit health insurance, coverage issued as a supplement to liability insurance, workers' compensation insurance, automobile medical payment insurance or insurance that is statutorily required to be contained in any liability insurance policy or equivalent self insurance;   Health insurer means any entity offering a health benefit plan; and   Routine patient care costs means the costs associated with the provision of health care services, including drugs, medical devices, and services that would otherwise be covered under the plan or contract, if those drugs, medical devices, and services were not provided in connection with an approved clinical trial program, including health care services that are:  Typically provided absent a clinical trial;   Required solely for the provision of the drug, medical device or service;   Required for the clinically appropriate monitoring of the drug, medical device, or service;   Provided for the prevention of complication arising from the provision of the drug, medical device, or service; and   Needed for the reasonable and necessary care arising from the provision of the drug, medical device, or service, including the diagnosis or treatment of the complications.       The subject of the trial must evaluate a drug, medical device or service that falls within a medicare benefit category and is not statutorily excluded from coverage. For purposes of this section, routine patient care costs does not include the costs associated with the provision of any of the following:  Drugs, medical devices, and services that have not been approved by the federal food and drug administration and that are associated with the clinical trial;   Services other than health care services, such as travel, housing, companion expenses, and other nonclinical expenses, that an enrollee may require as a result of the treatment being provided for purposes of the clinical trial;   Drugs, medical devices, and services that are provided solely to satisfy data collection and analysis needs, and that are not used in the clinical management of the patient;   Health care services that, except for the fact that they are being provided in a clinical trial, are otherwise specifically excluded from coverage under the enrollee's health plan;   Health care services customarily provided by the research sponsors free of charge for any enrollee in the trial; or   Drugs, medical devices, and services provided solely to determine trial eligibility.     For an enrollee diagnosed with cancer and accepted into a Phase I, Phase II, Phase III, or Phase IV clinical trial for cancer, every health benefit plan that is issued, amended, delivered, or renewed in this state, shall provide coverage for all routine patient care costs related to the clinical trials, if the enrollee's treating physician, who is providing covered health care services to the enrollee under the enrollee's health benefit plan contract, recommends participation in the clinical trial after determining that participation in the clinical trial has a meaningful potential benefit to the enrollee. For purposes of this section, the clinical trial's endpoints shall not be defined exclusively to test toxicity, but shall have a therapeutic intent.   The treatment shall be provided in a clinical trial that either:  Involves a drug that is exempt, under federal regulations, from new drug application; or   Is approved by one of the following:  One (1) of the national institutes of health;   The federal food and drug administration, in the form of an investigational new drug application;   The federal department of defense; or   The federal veteran's administration.       In the case of health care services provided by a participating provider, the payment rate shall be at the network negotiated rate, based on the member's plan design. In the case of a nonparticipating provider, the payment shall be at the rate that the member's plan would otherwise pay to a nonparticipating provider for the same services, less any applicable copayments and deductibles.   The provision of services, when required by this section, shall not, in itself, give rise to liability on the part of the health care service plan.   Nothing in this section shall be construed to limit, prohibit, or modify an enrollee's right to the independent review process available, or to the independent medical review system.   Nothing in this section shall be construed to otherwise limit or modify any existing requirements under this chapter, or to prevent application of copayment or deductible provisions in a plan.   Copayments and deductibles applied to services delivered in a clinical trial shall be the same as those applied to the same services, if not delivered in a clinical trial.   This section shall not apply to vision-only, dental-only, accident-only, specified disease, hospital indemnity, medicare supplement, CHAMPUS supplement, long-term care, individually underwritten policies, or disability income insurance; provided, that, for specified disease and hospital indemnity insurance, coverage for benefits under this section shall apply, but only to the extent that the benefits are covered under the general terms and conditions that apply to all other benefits under the policy. Nothing in this section shall be construed as imposing a new benefit mandate on specified disease, individually underwritten, or hospital indemnity insurance.   Nothing in this section shall be construed to require payment of costs associated with clinical trials that are not routine patient care costs, and that would not otherwise be covered by the health benefit plan, including, but not limited to, costs for services incurred that are related to or the result of the clinical trial.   This section does not require the payment of any patient care costs, routine or otherwise, that are billed by the provider to conduct the clinical trial.   Any entity seeking payment under this section must, at the time payment is sought, notify the health insurer in writing that the patient receiving the services for which payment is sought is the subject of a clinical trial. The notification shall include the patient's health insurance membership identification number. Failure to comply with this subsection (m) by the provider conducting the clinical trial shall relieve the health benefit plan and its enrollee from any obligation to reimburse the provider.   Notwithstanding any law to the contrary, any entity associated with the provision of medical services, as a part of a clinical trial pursuant to this part, shall, upon receipt of applicable payment by the health benefit plan, hold harmless, and relieve the enrollee involved, from any liability for services rendered by the provider, except for applicable copayment or coinsurance.   Nothing in this section shall be construed or interpreted as applying to the TennCare program under Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or any successor to the TennCare program administered pursuant to the federal medicaid laws. Health insurance entities that contract directly with the TennCare bureau, in the provision of services for TennCare recipients, are specifically excluded from this section, only for the products and services made by the health insurance entities on behalf of the bureau of TennCare.   
  Every insured or policy holder of a group policy of accident and sickness insurance offered for sale in this state, that provides coverage for hospital or medical expenses that also provides coverage to the spouse of the insured, shall provide at least thirty (30) days' prior notice of the termination of coverage to the covered spouse as a result of a divorce, a legal separation, or other separation. The notice shall be written, filed with the court that is hearing the divorce or legal separation prior to or at the final hearing, and served upon the spouse as provided by Tennessee Rules of Civil Procedure. If no divorce, legal separation or similar legal proceeding is pending, then the notice shall be transmitted by certified mail, return receipt requested, to the last known address of the spouse.    The notice shall advise the spouse who is to be terminated that, when the divorce is final, the spouse shall not be eligible for continued coverage under the policy. The notice shall also advise the spouse of the availability of the COBRA continuation provision and of the procedures for applying for COBRA coverage, including identifying who should be contacted to obtain coverage. The notice shall indicate that the spouse who is to be terminated will be without health insurance coverage from the insured's policy and that the spouse must obtain coverage under COBRA continuation, or a separate source of insurance, if the spouse wishes to retain health insurance coverage.   For the purposes of this subsection (b), COBRA continuation provision means any of the following:  Section 4980B of the Internal Revenue Code of 1986 (26 U.S.C.  4980B), other than subdivision (f)(1), insofar as it relates to pediatric vaccines;   The Employee Retirement Income Security Act (ERISA), Part 6 of Subtitle B of Title I (29 U.S.C.  1161 et seq.), other than  609 (29 U.S.C.  1169); or   Title XXII of the Public Health Service Act (42 U.S.C.  300bb-1 et seq.).       As an employer updates the plan summary, in the course of business, for any group policy of accident and sickness insurance that it may offer to its employees, the employer shall include a notice of the provisions of this section in the summary.   The attorney for the insured in any action for divorce shall advise the insured or policy holder of the obligation imposed by this section.   The administrative office of the courts shall develop a model notice to reflect this section.   
  As used in this section, autism spectrum disorders means neurological disorders, usually appearing in the first three (3) years of a person's life, that affect normal brain functions and are typically manifested by impairments in communication and social interaction, as well as restrictive, repetitive, and stereotyped behaviors.   A contract or policy of an insurer that provides benefits for neurological disorders, whether under an individual or group health insurance policy providing coverage on an expense-incurred basis, an individual or group service contract issued by a health maintenance organization, a self-insured group arrangement to the extent not preempted by federal law or a managed health care delivery entity of any type or description shall provide benefits and coverage for treatment of autism spectrum disorders that are at least as comprehensive as those provided for other neurological disorders. These benefits and coverage for treatment shall be provided to any person less than twelve (12) years of age.   Benefits provided for treatment of autism spectrum disorders shall be subject to deductible and copayment requirements and benefit limits that are no more stringent than those established for the treatment of other neurological disorders.   An insurer that provides benefits for neurological disorders shall not refuse to renew policies, reissue policies, or otherwise terminate or restrict services to a person solely because the person is diagnosed with an autism spectrum disorder.   This section shall not expand the type or scope of treatment beyond that authorized for any other diagnosed neurological disorder and shall be effective upon any contract, policy, or plan that is delivered, issued for delivery, amended or renewed on or after January 1, 2007.   Nothing in this section shall apply to accident-only, specified disease, hospital indemnity, medicare supplement, long-term care, or other limited benefit hospital insurance policies.   
  As used in this section, unless the context otherwise requires:  Child or children means any person under eighteen (18) years of age; and   Hearing aid means any wearable, nonexperimental, nondisposable instrument or device designed for the ear and used to aid or compensate for impaired human hearing, including earmolds and services necessary to select, fit, and adjust the hearing aid, but excluding batteries, cords, and other assistive listening devices such as FM systems.     Every individual or group health insurance policy providing coverage on an expense-incurred basis, every policy or contract issued by a hospital or medical service corporation, every individual or group service contract issued by a health maintenance organization, and every self-insured group arrangement to the extent not preempted by federal law, which is delivered, issued for delivery, or renewed in this state on or after January 1, 2012, shall provide coverage of up to one thousand dollars ($1,000) per individual hearing aid per ear, every three (3) years, for every child covered by such policy whether as a dependent of the policy holder or otherwise.   The insured may choose a hearing aid exceeding one thousand dollars ($1,000) and pay the difference in cost above the amount of coverage required by this section. Reimbursement shall be provided according to the respective principles and policies of the insurer.   The insurer may require the policyholder to provide a prescription by a licensed audiologist or physician or show proof through other suitable documentation of the need for a hearing aid, and this section shall not preclude the insurer from conducting managed care, medical necessity, or utilization review or prevent the operation of such policy provisions as deductibles, coinsurance, allowable charge limitations, coordination of benefits or provisions restricting coverage to services by licensed, certified or carrier-approved providers or facilities.   This section shall not apply to insurance coverage providing benefits for the following:  Hospital confinement indemnity;   Disability income;   Accident only;   Long-term care;   Medicare supplement;   Limited benefit health;   Specified disease indemnity;   Sickness or bodily injury or death by accident, or both; and   Other limited benefit policies.     This section shall not apply to TennCare or any successor program provided for in title 71, chapter 5.   
  Whenever any policy of insurance issued in this state provides for reimbursement for any service that is within the lawful scope of practice of a duly licensed optometrist, as defined in  63-8-102; a licensed psychologist designated as a health service provider, as provided by title 63, chapter 11; licensed psychological examiner; certified psychological assistant supervised, as provided by title 63, chapter 11; licensed senior psychological examiner; a duly licensed podiatrist, as defined in  63-3-101; a person duly licensed to engage in independent practice as a licensed clinical social worker in accordance with  63-23-105; a duly licensed marital and family therapist, as defined in  63-22-115; or a duly licensed professional counselor, as defined in  63-22-122, the insured or other person entitled to benefits under the policy shall be entitled to reimbursement for the services, whether the services are performed by a duly licensed physician; by a duly licensed optometrist; by a duly licensed podiatrist; by a duly licensed psychologist designated as a health service provider; by a duly licensed psychological examiner supervised, as provided by title 63, chapter 11; by a certified psychological assistant supervised, as provided by title 63, chapter 11; by a duly licensed senior psychological examiner; by a duly licensed independent practitioner of social work; by a duly licensed marital and family therapist; or by a duly licensed professional counselor, not to exceed the percentage of reimbursement provided for psychiatrists in the policy, notwithstanding any other provision in the policy.   Reimbursements shall be made in a timely manner.   The provisions of this section relating to podiatric services shall apply to all contracts, plans or policies issued or renewed on or after July 1, 1981.   As used in this section, licensed psychologist designated as a health service provider includes all psychologists previously licensed as clinical, school and counseling psychologists pursuant to title 63, chapter 11, prior to June 30, 1993, and who have been designated as health service providers.   
  Whenever any subscribers under any medical service plan or hospital service contract or hospital and medical service contract, as provided under Chapters 27 29 of this title or any similar statutes, or any other persons covered by the plan or contract, are entitled to reimbursement for any services that are within the lawful scope of practice of a duly licensed optometrist as defined in  63-8-102; a duly licensed podiatrist as defined in  63-3-101; a person duly licensed to engage in independent practice as a licensed clinical social worker in accordance with  63-23-105; the subscriber or other person shall be entitled to reimbursement for the services, whether the services are performed by a duly licensed physician; a duly licensed optometrist; a duly licensed podiatrist; or a person duly licensed to engage in independent  practice as a licensed clinical social worker, notwithstanding any provision to the contrary in any other statute or in the plan or contract; and duly licensed optometrists and podiatrists shall be entitled to participate in the plans or contracts providing for the services to the same extent and subject to the same limitations as duly licensed physicians.   The provisions of this section relating to podiatric services apply to all contracts, plans or policies issued or renewed on or after July 1, 1981.   
  Sections 56-7-2401 and 56-7-2402 are not applicable to any policy or policies of insurance issued in this state prior to June 1, 1965, nor shall any part of  56-7-2401 and 56-7-2402 be construed as enlarging the scope of practice of optometry or podiatry or the requiring of any insurance policy, medical service plan, hospital service contract or hospital and medical service contract to provide for visual care services or foot care services.   The provisions of this section relating to podiatric services apply to all contracts, plans or policies issued or renewed on or after July 1, 1981.   
   Whenever any policy of insurance issued in this state provides for reimbursement for any service that is within the lawful scope of practice of a duly licensed chiropractor, the insured or other person entitled to benefits under the policy shall be entitled to reimbursement for the services, whether the services are performed by a duly licensed medical physician or by a duly licensed chiropractor, notwithstanding any provision contained in the policy.   Whenever any insurance subscribers under any sickness and accident, medical service plan, hospital service contract or hospital and medical service contract, as provided under Chapters 26 29 of this title or any similar statutes, or any other persons covered by the plan or contract, are entitled to reimbursement for any services that are within the lawful scope of practice of a duly licensed chiropractor, the subscriber or other person shall be entitled to reimbursement for the services, whether the services are performed by a duly licensed medical physician or a duly licensed chiropractor, notwithstanding any provision to the contrary in any other statute or in the plan or contract; and duly licensed chiropractors shall be entitled to participate in the plans or contracts providing for the services to the same extent and subject to the same limitations as duly licensed medical physicians.     This section shall not be construed as enlarging the scope of practice of chiropractic or the requiring of any insurance policy, medical service plan, hospital service contract or hospital and medical service contract to provide for spinal, neurological or musculoskeletal care.   This section shall apply to all policies or plans issued or renewed on and after July 1, 1981.   
  Physician or doctor, whenever used in any group or individual health or accident insurance policy issued in this state or in a medical service plan or hospital service contract or hospital and medical service contract, as provided in Chapters 27 29 of this title or any similar statutes, providing for reimbursement or payment for surgical procedures or other medical or health care services that are specified in the policy, plan or contract, and are within the scope of practice of dentistry as defined in  63-5-108 or within the scope of practice of a podiatrist as defined in  63-3-101, shall be construed to include a duly licensed dentist or duly licensed podiatrist who performs the specified procedures or services, any  provision in any  policy, plan or contract to the contrary notwithstanding.   This section shall apply to all policies, plans and contracts issued, renewed or reinstated on and after July 1, 1974, and to all other policies, plans and contracts otherwise in existence on July 1, 1974, whenever there is a premium or rate change under the policies, plans and contracts.   The provisions of this section relating to podiatric services shall apply to all contracts, plans or policies issued or renewed on or after July 1, 1981.   
  Each managed care organization (MCO), preferred provider organization (PPO), health maintenance organization (HMO), and other health organizations shall provide, through direct contract with St. Jude Children's Research Hospital or otherwise, all enrollees in the health care organization with access to the health care services at St. Jude Children's Research Hospital to the extent access is practical and feasible and the services are medically appropriate.   Reimbursement to St. Jude Children's Research Hospital for the services provided pursuant to this section shall be no greater than the reimbursement rate a managed care organization would pay other entities providing similar services to its enrollees.   Any dispute regarding the application of this section shall be resolved by a committee composed of the commissioner of health, the commissioner of commerce and insurance and the commissioner of finance and administration.   
  Whenever any contract, plan, or policy of insurance issued in this state provides for reimbursement of any service that is within the lawful scope of practice of a nurse midwife, duly licensed by the state board of nursing as a registered nurse and also duly certified as a nurse midwife by the American College of Nurse-Midwives, the insured or other person entitled to benefits under the contract, plan, or policy shall be entitled to reimbursement for the services, whether the services are performed by a duly licensed physician or by a duly licensed and certified nurse midwife.   Reimbursements shall be made in a timely manner.   The provisions of this section relating to nurse midwife services shall apply to all contracts, plans, or policies issued or renewed on or after July 1, 1994.   
  Whenever any contract, plan, or policy of insurance issued in this state provides for reimbursement of any service that is within the lawful scope of practice of a nurse in advanced practice, the insured or other person entitled to benefits under the contract, plan, or policy shall be entitled to reimbursement for the services, whether the services are performed by a duly licensed physician or a duly licensed nurse in advanced practice. As used in this section, nurse in advanced practice means a registered nurse who is duly licensed by the state board of nursing and who is also a nationally certified nurse practitioner, a nationally certified registered nurse anesthetist, or a nationally certified clinical specialist.   Reimbursements shall be made in a timely manner.   The provisions of this section relating to the services of a nurse in advanced practice apply to all contracts, plans, or policies issued or renewed on or after July 1, 1996.   
  As used in this section:  Coinsurance means a percentage of the contractual fee schedule applicable to a particular health care provider that a covered person must pay for covered services rendered by that provider under the terms of a particular health insurance policy or plan;   Copayment means the specified dollar amount that a covered person must pay for covered services during a visit to a health care provider under the terms of a particular health insurance policy or plan;   Covered person has the same meaning as set forth in  56-7-110(a); and   Health insurance entity has the same meaning as set forth in  56-7-109, but does not include government insurance plans created by title 8, chapter 27.     A health insurance entity offering employer-based plans must offer to employers no less than one (1) plan option in which the copayment and coinsurance amounts for services rendered during an office visit to a chiropractic physician licensed under title 63, chapter 4, or to a physical therapist or occupational therapist licensed under title 63, chapter 13, are no greater than the copayment and coinsurance amounts for the services rendered during an office visit to a primary care physician licensed under title 63, chapter 6 or title 63, chapter 9.   Compliance with this section shall not be required with respect to a particular insurance plan if it is determined that compliance would cause that plan to lose its status as a grandfathered health plan within the meaning of  1251 of the federal Patient Protection and Affordable Care Act, P.L. 111-148, as amended, and  2301 of the federal Health Care and Education Reconciliation Act of 2010, P.L. 111-152, as amended, both compiled in 42 U.S.C.  18011.   Nothing in this section shall apply to accident-only, specified disease, hospital indemnity, Medicare supplement, disability income, long-term care, or other limited benefit hospital insurance policies, and any employer plan exempt from regulation under this title due to  514 of the federal Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1144).   
  As used in this section:  Coinsurance means a percentage of the contractual fee schedule applicable to a particular healthcare provider that a covered person must pay for covered services rendered by that provider under the terms of a particular health insurance policy or plan;   Copayment means the specified dollar amount that a covered person must pay for covered services during a visit to a healthcare provider under the terms of a particular health insurance policy or plan;   Covered person has the same meaning as set forth in  56-7-110(a); and   Health insurance entity has the same meaning as set forth in  56-7-109(a), but does not include the government insurance plans created pursuant to title 8, chapter 27, and title 71, chapter 5.     No health insurance entity shall impose on a covered person any copayment or coinsurance amount for services rendered during an office visit to a physician assistant licensed under title 63, chapter 19, and contracted or authorized as a primary care practitioner by that health insurance entity, that is greater than the copayment or coinsurance amount imposed on a covered person by that health insurance entity for the services rendered during an office visit to a physician licensed under title 63, chapter 6 or 9, and contracted or authorized by that health insurance entity as a primary care practitioner.   Nothing in this section shall prevent a health insurance entity from instituting measures designed to maintain quality and to control costs, including, but not limited to, imposing lower copayment or coinsurance amounts for services rendered by providers with proven clinical outcomes.   Nothing in this section shall apply to plans described in Section 1251 of the federal Patient Protection and Affordable Care Act (42 U.S.C.  18011) and Section 2301 of the federal Health Care and Education Reconciliation Act.   
  Any law to the contrary notwithstanding, no contract of insurance that provides coverage for sterilization operations or procedures may be entered into or renewed on or after July 1, 1971, if the contract imposes any disclaimer, restriction on, or limitation of coverage with respect to the insured's reason for sterilization. All such contracts entered into or renewed on or after July 1, 1971, shall be construed to be in compliance with this section and any provisions in any contract that are in conflict with this section shall be of no force or effect.   Any contract for a sterilization operation or procedure shall not be cancelled by the insurer unless the cancellation coincides with cancellation of the entire policy.   
  Any individual, franchise, blanket or group health insurance policy, medical service plan, contract, hospital service corporation contract, hospital and medical service corporation contract, fraternal benefit society, or health maintenance organization that provides coverage for surgical services for a mastectomy, and that is delivered, issued for delivery, amended or renewed on or after July 1, 1989, shall also provide coverage for mammography screening performed on dedicated equipment for diagnostic purposes on referral by a patient's physician according to the following guidelines:  A baseline mammogram for women thirty-five (35) to forty (40) years of age;   A mammogram every two (2) years, or more frequently based on the recommendation of the woman's physician, for women forty (40) to fifty (50) years of age; and   A mammogram every year for women fifty (50) years of age and over.     Any increase in expenditure requirements on a municipality or a county resulting from this section shall be appropriated from funds that the municipality or county receives from the state-shared taxes that are not earmarked by statute for a particular purpose.    This section shall not apply to medicare supplemental policies unless mammography is covered under medicare. This section shall not apply to policies that provide only hospital indemnity benefits or to policies that provide only benefits for specified accidents. Insurance policies that provide benefits only for specified diseases and that cover mastectomies shall be subject to the requirements of this section, unless the owner of the policy has other insurance that provides mammography coverage as guaranteed by this section.   The issuer of the specified disease policy has the burden of proving that the insured has other insurance that covers mammography to the extent guaranteed by this section.     
 Any law to the contrary notwithstanding, no policy of accident and sickness insurance may be entered into or renewed on or after July 1, 1974, if the policy by way of exclusion, definition, or otherwise denies coverage to an insured undergoing care and treatment in a facility for the care and treatment of persons with mental illness or intellectual disability, based upon the fact that the facility does not have organized facilities for operative surgery, if, in fact, the facility in question has, at the time a claim arises, a bona fide arrangement, by contract or otherwise, with an accredited hospital to perform the surgical procedures as may be required by the facility for persons with mental illness or intellectual disability.  
  In the event that coverage for the treatment of cancer by dose-intensive chemotherapy/autologous bone marrow transplants or stem cell transplants is provided for patients or enrollees included in the TennCare program, then each insurer proposing to issue individual or group accident and sickness insurance policies providing hospital, medical and surgical, or major medical coverage on an expense-incurred basis, each corporation providing individual or group accident and sickness subscription contracts, and each health maintenance organization providing a health care plan for health care services shall offer and make available the coverage, in the manner provided in subsection (b), under the policy, contract or plan delivered, issued for delivery or renewed in this state on and after January 1, 1996.   The coverage may be offered at an additional cost but the health care service shall not be subject to any greater deductible than any other health care service under the policy, contract or plan. Any required copayment shall not exceed the standard copayment required by the insured's policy, contract or plan for health care services.   This section shall not apply to short-term travel, long-term care, credit insurance, dental insurance, disability income, medical surgical supplemental insurance, vision insurance, hospital indemnity, accident-only limited or specified disease policies, or to short-term nonrenewable policies of not more than six (6) months' duration.   
  Any individual, franchise, blanket or group health insurance policy, medical service plan, contract, hospital service corporation contract, hospital and medical service corporation contract, fraternal benefit society, or health maintenance organization that provides hospital expense and surgical expense insurance and that is delivered, issued for delivery, amended or renewed on or after July 1, 1995, shall provide coverage for the treatment of phenylketonuria.   As used in this section, treatment means licensed professional medical services under the supervision of a physician and those special dietary formulas that are medically necessary for the therapeutic treatment of phenylketonuria.   
  This section shall be known and may be cited as the Bone Mass Measurement Coverage Act.   The general assembly finds that:  Osteoporosis affects twenty-five million (25,000,000) Americans and each year results in one million five hundred thousand (1,500,000) fractures of the hip, spine, wrist, and other bones, costing the nation at least eighteen billion dollars ($18,000,000,000);   Osteoporosis progresses silently, in most cases undiagnosed until a fracture occurs, and once a fracture occurs, the disease is already advanced, and the likelihood is high that another fracture will occur;   One (1) in two (2) women and one (1) in five (5) men will suffer a fracture due to osteoporosis in their lifetime;   Because osteoporosis progresses silently and currently has no cure, early diagnosis and treatment are key to reducing the prevalence and devastation of this disease;   Medical experts agree that osteoporosis is preventable and treatable; however, once the disease progresses to the point of fracture its associated consequences often lead to disability and institutionalization, and exact a heavy toll on the quality of life;   Given the current national focus on health care reform and the reduction of unnecessary health care expenditures through the use of health promotion programs, bone mass measurement, related to the early diagnosis and the timely treatment of osteoporosis, is a cost effective approach for this state to embrace;   Bone mass measurement is a reliable way to detect the presence of low bone mass and to ascertain the extent of bone loss to help assess the individual's risk for fracture, and this aids in selecting appropriate therapies and interventions. Ordinary x-rays are not sensitive enough to detect osteoporosis until twenty-five to forty percent (25-40%) of bone mass has been lost, and the disease is far advanced;   While there are currently available technologies for bone mass measurement, other technologies for measuring bone mass are under investigation and may become scientifically proven technologies in the future; and   Scientifically proven technologies for bone mass measurement and other services related to the diagnosis and treatment of osteoporosis can be used effectively to reduce the pain and financial burden that osteoporosis inflicts upon its victims.     The purpose of this section is to provide coverage to individuals with a condition or medical history for which bone mass measurement (bone density testing) is determined to be medically necessary for the individual's attending physician or primary care provider for the diagnosis and treatment of osteoporosis.    Any individual, franchise, blanket or group health insurance policy, medical service plan, contract, hospital service corporation contract, hospital and medical service corporation contract, fraternal benefit society, or health maintenance organization that provides coverage for accident and health services, and that is delivered, issued for delivery, amended or renewed on or after July 1, 1996, may also provide coverage for a qualified individual for scientifically proven bone mass measurement (bone density testing) for the diagnosis and treatment of osteoporosis.   Any increase in expenditure requirements on a municipality or a county resulting from this subsection (d) shall be appropriated from funds that the municipality or county receives from the state-shared taxes that are not earmarked by statute for a particular purpose.   This subsection (d) shall not apply to short-term travel, long-term care, credit insurance, dental insurance, disability income, medical surgical supplemental insurance, vision insurance, hospital indemnity, accident-only limited or specified disease policies, or to short-term nonrenewable policies of not more than six (6) months' duration.     As used in subsection (d):  Bone mass measurement means a radiologic or radioisotopic procedure or other scientifically proven technologies performed on an individual for the purpose of identifying bone mass or detecting bone loss; and   Qualified individual means a person with a condition for which bone mass measurement is determined to be medically necessary by the person's attending physician or primary care physician.     
   Any individual, franchise, blanket or group health insurance policy, medical service plan, contract, hospital service corporation contract, hospital and medical service corporation contract, fraternal benefit society, health maintenance organization, or managed care organization that provides coverage for mastectomy surgery shall provide coverage for all stages of reconstructive breast surgery on the diseased breast as a result of a mastectomy, but not including a lumpectomy, as well as any surgical procedure on the nondiseased breast deemed necessary to establish symmetry between the two (2) breasts in the manner chosen by the patient and physician. The surgical procedure performed on a nondiseased breast to establish symmetry with the diseased breast must occur within five (5) years of the date the reconstructive breast surgery was performed on a diseased breast.   Coverage for reconstructive breast surgery shall be subject to applicable copayments, coinsurance and deductibles.     This section applies to any policy, plan, or contract entered into or renewed on or after July 1, 1997.   
  Hearing screening or hearing screening test means a screening or test provided in accordance with current hearing screening standards established by a nationally recognized organization such as the Joint Committee on Infant Hearing Screening of the American Academy of Pediatrics.   Any individual, franchise, blanket or group health insurance policy, medical service plan contract, hospital service corporation contract, hospital and medical service corporation contract, managed health insurance issuer contract, fraternal benefits society plan, or health maintenance organization plan that provides coverage for hospital and surgical expense insurance and that is delivered, issued for delivery, amended or renewed in this state on or after July 1, 2008, shall provide coverage for infant hearing screening tests as provided in  68-5-904.   The coverage required by this section may be subject to annual deductible, co-pays, co-insurance and contractual requirements established for other similar benefits within the policy or contract; provided, that the annual deductible, co-pays, co-insurance and contractual requirements for the coverage required by this section are no greater or more restrictive than those established for other similar benefits within the policy or contract of insurance.   Nothing in this section shall apply to accident only, specified disease, hospital indemnity, medicare supplemental, long-term care, disability or other limited benefit insurance policies or to any employer plan exempt from regulation under this title due to  514 of the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.  1144).   
  As used in this section:  Annual limit means a dollar limitation on the total amount that may be paid for benefits in a twelve-month period under a health plan with respect to an individual or other coverage unit;   Clinical staff means an individual on the community mental health center staff who performs as a part of the treatment team diagnostic and/or counseling services and who holds at least a master's degree in either of the disciplines of psychology, nursing, or social work and any required license; and   Community mental health center means a private entity qualified as a tax exempt organization under  501(c)(3) of the Internal Revenue Code  (26 U.S.C.  501(c)(3)), or a public entity created by private act of the general assembly that:  Is primarily engaged in providing services for the diagnosis and treatment of emotionally disturbed and mentally ill persons, has a requirement that all mental health care be under a treatment plan approved and reviewed by a licensed physician or a licensed psychologist designated as a health care service provider, and has appropriate arrangements to assure that patients requiring medical services can be referred to a physician or hospital; and   Has been licensed as a mental health clinic facility by the department of mental health and substance abuse services, or by the licensing board of the state in which the community mental health center is located.       All other laws of this state notwithstanding, any individual, franchise, blanket or group policy of insurance issued pursuant to this title that provides hospital expense and surgical expense insurance and that is entered into, delivered, issued for delivery, or renewed, excepting individual insurance policy renewal, by agreement or otherwise, commencing on July 1, 1974, shall provide benefits for expense of residents of this state covered under the policy or plan, arising from psychiatric disorders, mental or nervous conditions, as described and defined in the Diagnostic Standard Manual of the American Psychiatric Association, alcoholism, drug dependence, both defined as mental illness in  33-1-101, or the medical complication of mental illness or intellectual disability, unless the policy or plan of insurance specifically excludes or reduces these benefits. This subsection (b) shall not apply to group policies or plans to which  56-7-2360 applies. The medical and hospital benefits and coverage provided for the disorders, conditions and complications, if any, shall not be denied because of confinement in a particular facility; provided, that the facility is either:  A hospital licensed under title 33, chapter 2 or title 68, chapter 11, part 2, and accredited by the joint commission on the accreditation of hospitals; or   A hospital owned or operated by the state that is especially intended for use in the diagnosis, care and treatment of psychiatric, mental or nervous disorders, nor shall the benefits and coverage be denied on the basis that physician's services were performed by physicians not on the staff of a particular facility, so long as those services were rendered while insureds were hospitalized in that facility.      After July 1, 1980, every insurer that proposes to issue a group hospital policy or a group major medical policy in this state and every nonprofit hospital and medical service plan corporation that proposes to issue group hospital, medical or major medical service plan contracts that provide coverage for the insured or the subscriber shall, in the case of outpatient expenses at a community mental health center, make available benefits as specified in this section for the care and treatment of mental, emotional or nervous disorders, alcoholism, drug dependence or the medical complication of mental illness or intellectual disability.   The benefits required to be made available by this subsection (c) shall be a part of each group policy or group contract described in this section, unless the policyholder or group contract subscriber rejects in writing the coverage.   When benefits as specified in this section are made available for treatment received at the community mental health center, the benefits that cover services rendered by a physician in accordance with the policy or service plan contract shall also be made available when services are rendered by a member of the clinical staff, so long as the community mental health center has in effect a plan for quality assurance approved by the department of mental health and substance abuse services and the treatment is supervised by a licensed physician or a licensed psychologist designated as a health service provider. However, nothing in this subsection (c) may be construed to affect the license of a physician or psychologist designated as a health service provider providing the service or supervision. The benefits shall be provided at the usual and customary rates established by the community mental health center for the services rendered. However, the benefits provided shall be subject to deductibles and coinsurance factors that are not less favorable than for physical illness generally, and in no event shall coverage be required to be made available for more than thirty (30) outpatient visits per year.     With respect to policies and contracts as described in subsection (c) that are delivered or issued for delivery in this state on or before July 1, 1980, each insurer and nonprofit hospital and medical service plan corporation shall notify the group policyholder or group contract holder of the availability of coverage described in subsection (c). The notification shall describe the benefits available and shall provide a means by which the policyholder or group contract holder may communicate acceptance or rejection of the coverage.   All group hospital and major medical policies delivered or issued for delivery in this state after July 1, 1980, and all group hospital, medical and major medical service plans commencing in this state after July 1, 1980, that provide benefits for expenses of residents of the state arising from psychiatric disorders, mental or nervous conditions, alcoholism, drug dependence or medical complication of mental illness or intellectual disability, shall reimburse for these benefits, if any, when the benefits are provided at a facility that is:  With respect to outpatient benefit, a community mental health center, or   With respect to inpatient benefits, a community mental health center that has facilities for inpatient care and that has received a certificate of need from the Tennessee health facilities commission certifying the necessity of the facility if required by law.     All individual, franchise, blanket, or group policies of insurance issued pursuant to this title that provide hospital expense and medical or surgical expense insurance and that are entered into, delivered, issued for delivery, or renewed, except individual insurance policy renewal, by agreement or otherwise, commencing on July 1, 1981, and that provide benefits for expenses of residents of the state arising from alcoholism, drug dependence or medical complication resulting from alcoholism, or drug dependence shall reimburse for these benefits, if any, when the benefits are provided at a facility that is a residential treatment facility licensed under title 33, chapter 2, part 4, and accredited by the joint commission on the accreditation of hospitals.   Subject to  56-7-2360, in general, with respect to group health plans issued by entities regulated pursuant to insurance law, for plan years beginning on or after January 1, 1998, certain mental health benefits are required as follows:  As to either aggregate lifetime limits or annual limits or both, for a group health plan providing both medical and surgical benefits and mental health benefits:  If the plan does not have a limit on substantially all medical and surgical benefits, the plan may not impose such a limit on mental health benefits;   If the plan has a limit on substantially all medical and surgical benefits, the plan shall either include mental health benefits under the limit applied to medical and surgical benefits or apply a separate limit to mental health benefits that is no less than the one applied to medical and surgical benefits; and   If the plan has varying limits on different medical or surgical benefits, the plan shall apply an average limit to mental health benefits with the average to be computed based on the weighted average of the varying limits;     No group health plan is required under this subsection (g) to provide mental health benefits;   This subsection (g) shall not affect the terms and conditions related to the amount, duration or scope of mental health benefits except for aggregate lifetime limits and annual limits;   This subsection (g) shall not apply to group health plans issued to small employers, defined as those with from two (2) to fifty (50) employees;   This subsection (g) shall not apply if its application results in an increase in the cost of the coverage of at least one percent (1%);   If the group health plan offers a participant two (2) or more benefit package options, this subsection (g) shall be applied separately to each option;   For purposes of this subsection (g), mental health benefits does not include benefits for the treatment of substance abuse or chemical dependency;   This subsection (g) shall not apply to benefits for services furnished on or after September 30, 2001; and   The commissioner may promulgate reasonable rules and regulations necessary for the proper administration of this subsection (g).     
  Purpose.  The purpose of this section is to encourage consumers to avail themselves of basic levels of benefits under group health insurance policies and contracts for the care and treatment of alcohol and other drug dependency, and to preserve the rights of the consumer to select the coverage according to the consumer's medical-economic needs.   Availability of Coverage for Alcohol and Other Drug Dependency.  Insurers, nonprofit hospitals and medical service plan corporations and health maintenance organizations transacting health insurance in this state shall offer and make available under group policies, contracts and plans providing hospital and medical coverage on an expense-incurred, service or prepaid basis, benefits for the necessary care and treatment of alcohol and other drug dependency that are not less favorable than for physical illness generally, subject to the same durational limits, dollar limits, deductibles and coinsurance factors, and that offer of benefits shall be subject to the right of the group policy or contract holder to reject the coverage or to select any alternative level of benefits if the right is offered by or negotiated with the insurer, service plan corporation or health maintenance organization.   Any benefits so provided shall be determined as if necessary care and treatment in an alcohol or other drug dependency treatment center were care and treatment in a hospital. For purposes of this section, alcohol or other drug dependency treatment center means a facility that provides a program for the treatment of alcohol or other drug dependency pursuant to a written treatment plan approved and monitored by a physician, and which facility is also:  Affiliated with a hospital under a contractual agreement with an established system for patient referral;   Licensed, certified or approved as an alcohol or other drug dependency treatment center by the department of mental health and substance abuse services; or   Accredited as such a facility by the joint commission on accreditation of hospitals.       Applicability.  This section shall apply to group policies or contracts delivered or issued for delivery in this state more than one hundred twenty (120) days after October 1, 1982; but shall not apply to blanket, short term travel, accident only, limited or specified disease, individual conversion policies or contracts, or to policies or contracts designed for issuance to persons eligible for coverage under Title XVIII of the Social Security Act, known as medicare (42 U.S.C.  1395 et seq.), or any other similar coverage under state or federal governmental plans.   
   Notwithstanding any other law to the contrary, any insurer providing individual, franchise, blanket or group policy of insurance issued pursuant to this title that provides hospital expense and surgical or medical expense insurance and/or that is entered into, delivered, issued for delivery or renewed in this state after January 1, 1989, shall offer to provide benefits for expense of residents of this state covered under the policy or plan arising from conditions or disorders of hearing or conditions or disorders of speech, voice, or language, so long as such conditions or disorders receive treatment from duly licensed audiologists or speech pathologists, as defined in  63-17-103.   This section is applicable to all health benefit policies, programs, or contracts offered by commercial insurance companies, nonprofit insurance companies, prepaid plans, i.e., health maintenance organizations, and to all health benefit programs provided state government employees.     Nothing in this section shall apply to any insurance policy that only provides coverage for specified diseases, hospital indemnity, medicare supplement or other limited benefit coverages.   Notwithstanding any provision of this section to the contrary, this section shall be construed to apply to the state and its political subdivisions.   
  After January 1, 1983, every insurer that proposes to issue a group policy or contract in this state and every nonprofit hospital and medical service plan corporation that proposes to issue a group service plan contract in this state that provides maternity benefits shall make available benefits for pediatric nursery care of newly born children. The additional benefit shall be for a specified number of nursery care days and maximum dollar limits as elected by the group policyholder or group contract holder.   With respect to policies and contracts, as described in subsection (a), that were delivered or issued for delivery in this state on or before January 1, 1983, each insurer and nonprofit hospital and medical service plan corporation shall notify the group policyholder or group contract holder of the availability of coverage described in subsection (a).   
  As used in this section:  Health insurance carrier means a company or other legal entity whose health benefit policies, programs, or contracts are subject to this section; and   Patient with diabetes means a person with elevated blood glucose levels that has been diagnosed as having diabetes by an appropriately licensed health care professional.     Notwithstanding any other law to the contrary, any individual, franchise, blanket, or group health insurance policy, medical service plan, contract, hospital service corporation contract, hospital and medical service corporation contract, fraternal benefit society, health maintenance organization, preferred provider organization or managed care organization that provides hospital, surgical, or medical expense insurance shall provide coverage for equipment, supplies, and outpatient self-management training and education, including medical nutrition counseling, when prescribed by a physician as medically necessary for the treatment of diabetes.   This section is applicable to all health benefit policies, programs, or contracts that are offered by commercial insurance companies, nonprofit insurance companies, health maintenance organizations, preferred provider organizations, and managed care organizations, and that are entered into, delivered, issued for delivery, amended, or renewed after January 1, 1998.    The following equipment and supplies for the treatment of diabetes must be included in the coverage provided pursuant to subsection (b), when prescribed by a physician as medically necessary for the care of an individual patient with diabetes:  Blood glucose monitors and blood glucose monitors for the legally blind;   Test strips for blood glucose monitors;   Visual reading and urine test strips;   Insulin;   Injection aids;   Syringes;   Lancets;   Insulin pumps, infusion devices, and appurtenances thereto;   Oral hypoglycemic agents;   Podiatric appliances for prevention of complications associated with diabetes; and   Glucagon emergency kits.     When test strips for blood glucose monitors are prescribed by a physician as medically necessary for a noninsulin using patient with diabetes, the coverage required by this part for the test strips for the patient shall be limited, in each calendar year, to twelve (12) bottles of fifty (50) test strips per bottle unless the health insurance carrier approves a larger quantity of test strips based upon a determination by the health insurance carrier that a larger quantity is medically necessary for the patient.      To ensure that patients with diabetes are educated as to the proper self-management and treatment of their diabetes, diabetes outpatient self-management training and educational services, including medical nutrition counseling, must be included in the coverage provided pursuant to subsection (b), when prescribed by a physician for the care of an individual patient with diabetes. Diabetes outpatient self-management training and educational services, including medical nutrition counseling, shall be provided by physicians licensed under title 63, chapter 6 or 9, or, upon referral by a physician, by registered nurses or dietitians licensed under title 63, chapter 7 or 25, pharmacists licensed under title 63, chapter 10, who have completed a diabetes patient management program offered by a provider recognized by the American Council on Pharmaceutical Education and the Tennessee board of pharmacy, or other health care professionals licensed in this state who have expertise in diabetes management as determined by the health insurance carrier. The coverage required by subsection (b) for diabetes outpatient self-management training and education shall be limited to the following:  Visits that are certified by a physician to be medically necessary upon the diagnosis of diabetes in a patient;   Visits that are certified by a physician to be medically necessary because of a significant change in a patient's symptoms or condition that necessitates changes in the patient's self-management; and   Visits that are certified by a physician to be medically necessary for re-education or refresher training.     Diabetes outpatient self-management training and educational services may be provided in group settings where practicable, and shall include home visits where medically necessary. A health insurance carrier may meet the requirements of this subsection (e) by providing outpatient self-management training and educational services through licensed health care professionals with expertise in diabetes management who are employed by or under contract with the health insurance carrier.     The benefits required by this section may be subject to the annual deductible and co-insurance established for all other similar benefits within a given policy, program, or contract of insurance, so long as the annual deductible and co-insurance for the benefits required by this section are no greater than the annual deductible and co-insurance established for all other similar benefits within that policy, program, or contract of insurance.   A health insurance carrier shall not reduce or eliminate coverage due to the requirements of this section.   Nothing in this section shall apply to accident-only, specified disease, hospital indemnity, medicare supplement, long-term care or other limited benefit health insurance policies.   
  The general assembly finds that chlamydia is a sexually transmitted disease that may cause serious complications in persons infected with it, including pelvic inflammatory disease, infertility, and ectopic pregnancy. Pregnant women infected with chlamydia may suffer from symptoms such as stillbirths, low birth weight babies, and other serious physical and mental complications for their infants. Chlamydia is often asymptomatic in women and cannot be detected except with special, though inexpensive, screening tests. Cure of chlamydia is usually both easy and inexpensive. The general assembly further finds that having health care insurance and managed care plan coverage of annual chlamydia screening tests for females in conjunction with covered pap smears in the age group most likely to be infected with chlamydia will encourage the testing and treatment needed to detect and cure this destructive disease and result in a marked improvement in the general health of the citizens of this state.   As used in this section, unless the context otherwise requires:  Chlamydia screening test means any laboratory test of the urogenital tract that specifically detects for infection by one (1) or more agents of chlamydia trachomatis and which test is approved for those purposes by the federal food and drug administration;   Insurer means an insurance benefit plan, a fraternal benefit society, a nonprofit hospital service corporation, a nonprofit medical service corporation, a health care plan, a health maintenance organization, a managed care organization, or any similar entity by whatever name called; and   Policy means a major medical accident and sickness insurance policy, health benefit plan, contract, or policy issued by an insurer, except a disability income policy, specified disease policy, hospital indemnity policy, credit insurance policy, accident only policy, or other limited benefit plan policy or contract.      Every insurer authorized to issue an individual or group accident and sickness insurance policy in this state that provides major medical insurance coverage and that includes coverage for any female shall make available on an optional basis as part of or as an endorsement to each such policy that is issued, delivered, issued for delivery, or renewed in this state on or after July 1, 1999, coverage for one (1) annual chlamydia screening test in conjunction with an annual pap smear for covered females who are not more than twenty-nine (29) years of age if the screening test is determined to be medically necessary.   The chlamydia screening test coverage may be subject to exclusions, reductions, or other limitations as to coverages, deductibles, or coinsurance provisions approved by the commissioner.   Nothing in this subsection (c) shall be construed to prohibit the issuance of accident and sickness insurance policies that provide benefits greater than or more favorable to the insured than those benefits established pursuant to subdivision (c)(1), nor to prohibit any managed care plan contract from providing benefits greater than or more favorable to the insured than those benefits established pursuant to subdivision (c)(1), from having cost-sharing arrangements or to otherwise change the contractual relations between an insurer and their insureds or covered persons by whatever name called.   Nothing contained in this subsection (c) shall be construed to prohibit any insurer from providing benefits greater than or more favorable to the covered females.   The requirements of this subsection (c) with respect to a group or blanket accident and sickness insurance benefit plan, policy, or contract shall be satisfied if the coverage specified in this subsection (c) is made available to the master policyholder of the plan, policy, or contract. Nothing in this subsection (c) shall be construed to require the group insurer, nonprofit corporation, health care plan, health maintenance organization, managed care organization, or master policyholder to provide or to make available the coverage to any certificate holder insured under the group policy, plan, or contract.   Nothing contained in this subsection (c) shall be deemed to prohibit the payment of different levels of benefits or having differences in coinsurance percentages applicable to benefit levels for services provided by preferred and nonpreferred providers in accordance with preferred provider arrangements.     The commissioner is authorized to promulgate rules and regulations to effectuate the purposes of this section. The rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.   
 This part shall be known and may be cited as the Genetic Information Nondiscrimination in Health Insurance Act of 1997.  
 As used in this part, unless the context otherwise requires:   Family member means with respect to an individual, another individual related by blood to that individual;   Genetic information means information derived from genetic testing to determine the presence or absence of variations or mutations, including carrier status, in an individual's genetic material or genes that are scientifically or medically believed to cause a disease, disorder or syndrome, or are associated with a statistically increased risk of developing a disease, disorder or syndrome, that is asymptomatic at the time of testing. The testing does not include either routine physical examinations or chemical, blood or urine analysis unless conducted purposefully to obtain genetic information or questions regarding family history;   Genetic services means health services to obtain, assess, and interpret genetic information for diagnostic and therapeutic purposes, and for genetic education and counseling;   Health insurance coverage means a contractual arrangement for the provision of a payment for health care, including:  A group health plan; and   Any other health insurance arrangement, including any arrangement consisting of a hospital or medical expense incurred policy or certificate, hospital or medical service plan contract, or health maintenance organization subscriber contract;     Insurance provider means an insurer or other entity providing health insurance coverage; and   Person includes a corporation, company, association, firm, partnership, society, and joint stock company, as well as an individual.   
 An insurance provider may not deny or cancel health insurance coverage, or vary the premiums, terms, or conditions for health insurance coverage, for an individual or a family member of an individual on the basis that the individual or family member of an individual has requested or received genetic services.  
  An insurance provider may not request or require an individual to whom the provider provides health insurance coverage, or an individual who desires the provider to provide health insurance coverage, to disclose to the provider genetic information about the individual or family member of the individual.   An insurance provider may not disclose genetic information about an individual without the prior written authorization of the individual or legal representative of the individual. The authorization is required for each disclosure and shall include an identification of the person to whom the disclosure would be made.   
 This part does not apply to the underwriting, denial of claims or issuance of a life insurance policy, disability income policy, long-term care policy, accident only policy, hospital indemnity or fixed indemnity policy, dental policy or vision policy or any other actions of an insurer directly related to a life insurance policy, disability income policy, long-term care policy, accident only policy, hospital indemnity or fixed indemnity policy, dental policy or vision policy.  
 Nothing in this part shall preclude a health insurer from obtaining a routine physical examination or chemical, blood or urine analysis, or from asking questions related to the health of an applicant or the applicant's family.  
 Nothing in this part shall require an insurance provider to provide coverage of genetic services, unless the coverage of genetic services is already included within the scope of benefits of the provider's health insurance coverage.  
 The commissioner may promulgate regulations necessary or appropriate to carry out this part in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 This part shall be known and may be cited as the Tennessee Health Insurance Portability, Availability and Renewability Act.  
 As used in this part, unless the context otherwise requires:   Affiliation period:  Means a period that, under the terms of the health insurance coverage offered by the health maintenance organization, must expire before the health insurance coverage becomes effective. The organization is not required to provide health care services or benefits during the affiliation period and no premium shall be charged to the participant or beneficiary for any coverage during the period;   The period shall begin on the enrollment date; and   An affiliation period under a plan shall run concurrently with any waiting period under the plan;     Beneficiary has the meaning given such term under  3(8) of ERISA (29 U.S.C.  1002(8));   Bona fide association means an association that satisfies the requirements of  56-26-204(a) and:  Does not condition membership in the association on any health status-related factor relating to an individual, including an employee of an employer or a dependent of an employee;   Makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to the members or individuals eligible for coverage through a member;   Does not make health insurance coverage offered through the association available other than in connection with a member of the association; and   Meets additional requirements established by the commissioner;     Church plan has the meaning given the term under  3(33) of ERISA (29 U.S.C.  1002(33));   COBRA continuation provision means any of the following:  Section 4980B of the Internal Revenue Code of 1986 (26 U.S.C.  4980B), other than subdivision (f)(1) of that section insofar as it relates to pediatric vaccines;   ERISA, Part 6 of Subtitle B of Title I (29 U.S.C.  1161 et seq.), other than  609 (29 U.S.C.  1169); or   Title XXII of the Public Health Service Act (42 U.S.C.  300bb-1 et seq.);      Creditable coverage means, with respect to an individual, coverage of the individual under any of the following:   A group health plan;   Health insurance coverage;   Title XVIII, Part A or Part B of the Social Security Act, known as medicare (42 U.S.C.  1395 et seq.);   Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), other than coverage consisting solely of benefits under  1928 (42 U.S.C.  300x-28);   United States Code, title 10, ch. 55 (10 U.S.C.  1071 et seq.);   A medical care program of the Indian Health Service or of a tribal organization;   A state health benefits risk pool;   A health plan offered under United States Code, title 5, ch. 89 (5 U.S.C.  8901 et seq.);   A public health plan; or   A health benefit plan under  5(e) of the Peace Corps Act (22 U.S.C.  2504(e));     Creditable coverage does not include coverage consisting solely of coverage of excepted benefits;     Employee has the meaning given the term under  3(6) of ERISA (29 U.S.C.  1002(6));   Employer has the meaning given the term under  3(5) of ERISA (29 U.S.C.  1002(5)), except that the term includes only employers of two (2) or more employees;   Enrollment date means, with respect to an individual covered under a group health plan or health insurance coverage, the date of enrollment of the individual in the plan or coverage or, if earlier, the first day of the waiting period for the enrollment;   Excepted benefits means benefits under one (1) or more, or any combination, of the following:  Benefits not subject to requirements:   Coverage only for accident or disability income insurance, or any combination of accident and disability income insurance;   Coverage issued as a supplement to liability insurance;   Liability insurance, including general liability insurance and automobile liability insurance;   Workers' compensation or similar insurance;   Automobile medical payment insurance;   Credit-only insurance;   Coverage for on-site medical clinics; or   Other similar insurance coverage, specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits;     Benefits not subject to requirements if offered separately:   Limited scope dental or vision benefits;   Benefits for long-term care, nursing home care, home health care, community-based care, or any combination of long-term care, nursing home care, home health care and community-based care; and   Other similar, limited benefits specified in regulations;     Benefits not subject to the requirements if offered as independent, noncoordinated benefits are coverage only for a specified disease or illness and hospital indemnity or other fixed indemnity insurance; and   Benefits not subject to the requirements if offered as a separate insurance policy are medicare supplement insurance, coverage supplemental to the coverage provided under United States Code, title 10, ch. 55 (10 U.S.C.  1071 et seq.), and similar supplemental coverage provided to coverage under a group health plan;     Federal governmental plan means a governmental plan established or maintained for its employees by the federal government or by any agency or instrumentality of the federal government;   Governmental plan has the meaning given the term under ERISA,  3(32) (29 U.S.C.  1002(32)), and any federal governmental plan;   Group health insurance coverage means, in connection with a group health plan, health insurance coverage offered in connection with the plan;   Group health plan means an employee welfare benefit plan, as defined in ERISA,  3(1) (29 U.S.C.  1002(1)), to the extent that the plan provides medical care and including items and services paid for as medical care to employees or their dependents, as defined under the terms of the plan, directly or through insurance, reimbursement, or otherwise. A program under which creditable coverage is provided shall be treated as a group health plan for the purposes of applying this part;   Health insurance coverage means benefits consisting of medical care, provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care, under any policy, certificate, or agreement offered by a health insurance issuer;   Health insurance issuer means an entity subject to the insurance laws of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide health insurance coverage, including, but not limited to, an insurance company, a health maintenance organization and a nonprofit hospital and medical service corporation. Health insurance issuer does not include a group health plan;   Health maintenance organization means:  A federally qualified health maintenance organization, as defined under federal law; or   An organization recognized under state law as a health maintenance organization;     Health status-related factor means any of the following factors:  Health status;   Medical condition, including both physical and mental illnesses;   Claims experience;   Receipt of health care;   Medical history;   Genetic information;   Evidence of insurability, including conditions arising out of acts of domestic violence; and   Disability;     Individual health insurance coverage means health insurance coverage offered to individuals in the individual market, but does not include short-term limited duration insurance;   Individual market means the market for health insurance coverage offered to individuals other than in connection with a group health plan. This includes coverage offered in connection with a group health plan that has fewer than two (2) participants as current employees on the first day of the plan year;   Large employer means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least fifty-one (51) employees on business days during the preceding calendar year and who employs at least two (2) employees on the first day of the plan year;   Large group market means the health insurance market under which individuals obtain health insurance coverage, directly or through any arrangement, on behalf of themselves and their dependents, through a group health plan maintained by a large employer;   Late enrollee means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during:  The first period in which the individual is eligible to enroll under the plan; or   A special enrollment period;     Medical care means amounts paid for:  The diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body;   Amounts paid for transportation primarily for and essential to medical care referred to in subdivision (24)(A); and   Amounts paid for insurance covering medical care referred to in subdivisions (24)(A) and (B);     Network plan means health insurance coverage of a health insurance issuer under which the financing and delivery of medical care, including items and services paid for as medical care, are provided, in whole or in part, through a defined set of providers under contract with the issuer;   Nonfederal governmental plan means a governmental plan that is not a federal governmental plan;   Participant has the meaning given the term under ERISA,  3(7) (29 U.S.C.  1002(7));   Placed for adoption, in connection with any placement for adoption of a child with any person, means the assumption and retention by the person of a legal obligation for total or partial support of the child in anticipation of adoption of the child. The child's placement with the person terminates upon the termination of the legal obligation;   Plan sponsor has the meaning given the term under  3(16)(B) of ERISA (29 U.S.C.  1002(16)(B));   Preexisting condition exclusion means, with respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for the coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before that date. Genetic information shall not be treated as a preexisting condition in the absence of a diagnosis of the condition related to such information;   Small employer means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employs an average of at least two (2) but no more than fifty (50) employees on business days during the preceding calendar year and who employs at least two (2) employees on the first day of the plan year;   Small group market means the health insurance market under which individuals obtain health insurance coverage, directly or through any arrangement, on behalf of themselves and their dependents, through a group health plan maintained by a small employer; and   Waiting period means, with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the plan.   
  A group health plan, and a health insurance issuer offering group health insurance coverage, may, with respect to a participant or beneficiary, impose a preexisting condition exclusion only if:  The exclusion relates to a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within the six-month period ending on the enrollment date;   The exclusion extends for a period of not more than twelve (12) months, or eighteen (18) months in the case of a late enrollee, after the enrollment date; and   The period of the preexisting condition exclusion is reduced by the aggregate of periods of creditable coverage applicable to the participant or beneficiary as of the enrollment date.     A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group health plan, if, after the period and before the enrollment date, there was a sixty-three-day period during all of which the individual was not covered under any creditable coverage.   Any period that an individual is in a waiting period for any coverage under a group health plan, or for group health insurance coverage, or is in an affiliation period shall not be taken into account in determining the continuous period under subsection (b).   Method of Crediting Coverage.  Standard Method.  Except as otherwise provided under subdivision (d)(2), a group health plan, and a health insurance issuer offering group health insurance coverage, shall count a period of creditable coverage without regard to the specific benefits covered during the period.   Election of Alternative Method.  A group health plan, or a health insurance issuer offering group health insurance, may elect to credit coverage based on coverage of benefits within each of several classes or categories of benefits specified in regulations rather than as provided under subdivision (d)(1). The election shall be made on a uniform basis for all participants and beneficiaries. Under the election a group health plan or issuer shall count a period of creditable coverage with respect to any class or category of benefits if any level of benefits is covered within the class or category.   In the case of an election with respect to a group health plan under subdivision (d)(2), whether or not health insurance coverage is provided in connection with the plan, the plan shall:  Prominently state in any disclosure statements concerning the plan, and state to each enrollee at the time of enrollment under the plan, that the plan has made the election; and   Include in the statements a description of the effect of this election.     Issuer Notice.  In the case of an election under subdivision (d)(2) with respect to health insurance coverage offered by an issuer in the small or large group market, the issuer:  Shall prominently state in any disclosure statements concerning the coverage, and to each employer at the time of the offer or sale of the coverage, that the issuer has made the election; and   Shall include in the statements a description of the effect of the election.       Establishment of Period.  Periods of creditable coverage with respect to an individual shall be established through presentation of certifications described in subsection (g) or in any other manner specified in regulations.   Exceptions.  Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of an individual who, as of the last day of the thirty-day period beginning with the date of birth, is covered under creditable coverage.   Subject to subdivision (f)(4), a group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining eighteen (18) years of age and who, as of the last day of the thirty-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. This subdivision (f)(2) shall not apply to coverage before the date of the adoption or placement for adoption.   A group health plan, and a health insurance issuer offering group health insurance coverage, may not impose any preexisting condition exclusion relating to pregnancy as a preexisting condition.   Subdivisions (f)(1) and (2) shall no longer apply to an individual after the end of the first sixty-three-day period during all of which the individual was not covered under any creditable coverage.     Certifications and Disclosures of Coverage.  A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certification described in subdivision (g)(2):  At the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision;   In the case of an individual becoming covered under a COBRA continuation provision, at the time the individual ceases to be covered under the provision; and   On request on behalf of an individual made not later than twenty-four (24) months after the date of cessation of the coverage described in subdivision (g)(1)(A) or (B), whichever is later. The certification under subdivision (g)(1)(A) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.     The certification described in this subsection (g) is a written certification of:  The period of creditable coverage of the individual under the plan and the coverage, if any, under the COBRA continuation provision; and   The waiting period, if any, and affiliation period, if applicable, imposed with respect to the individual for any coverage under the plan.     To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this subsection (g) if the health insurance issuer offering the coverage provides for the certification in accordance with this subsection (g).   Disclosure of Information on Previous Benefits.  In the case of an election described in subdivision (d)(2) by a group health plan or health insurance issuer, if the plan or issuer enrolls an individual for coverage under the plan and the individual provides a certification of coverage of the individual under subdivision (g)(1):  Upon request of the plan or issuer, the entity that issued the certification provided by the individual shall promptly disclose to the requesting plan or issuer information on coverage of classes and categories of health benefits available under the entity's plan or coverage; and   The entity may charge the requesting plan or issuer for the reasonable cost of disclosing the information.     Regulations.  The commissioner is authorized to establish rules to prevent an entity's failure to provide information with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage.     Special enrollment periods.  For Individuals Losing Other Coverage.  As used in this subsection (h), health insurance coverage includes the TennCare program as administered by the department of finance and administration.   A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan, or a dependent of the employee if the dependent is eligible but not enrolled for coverage under the terms, to enroll for coverage under the terms of the plan if each of the following conditions is met:  The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent;   The employee stated in writing at the time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer, if applicable, required the statement at the time and provided the employee with notice of the requirement, and the consequences of the requirement, at that time;   The employee's or dependent's coverage described in subdivision (h)(2)(A):       Was under a COBRA continuation provision and the coverage under the provision was exhausted; or  An HMO that offers health insurance coverage in connection with a group health plan and that does not impose any preexisting condition exclusion allowed under subsection (a) with respect to any particular coverage option may impose an affiliation period for the coverage option, but only if:  The period is applied uniformly without regard to any health status-related factors; and   The period does not exceed two (2) months, or three (3) months in the case of a late enrollee.     An HMO may use alternative methods from those described in subdivision (i)(1) to address adverse selection as approved by the commissioner.      Was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage, including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment, or employer contributions toward the coverage were terminated; and   Under the terms of the plan, the employee requests enrollment not later than thirty (30) days after one (1) of the events described in subdivision (h)(2)(C).   For Dependents.   In general, the group health plan shall provide for a dependent special enrollment period described in subdivision (h)(3)(B) during which the person, or, if not otherwise enrolled, the individual, may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if the spouse is otherwise eligible for coverage, if:   A group health plan makes coverage available with respect to a dependent of an individual;   The individual is a participant under the plan, or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and   A person becomes a dependent of the individual through marriage, birth, or adoption or placement for adoption.   Dependent Special Enrollment Period.  A dependent special enrollment period under this subsection (h) shall be a period of not less than thirty (30) days and shall begin on the later of:   The date dependent coverage is made available; or   The date of the marriage, birth, or adoption or placement for adoption, as the case may be, described in subdivision (h)(3)(A)(iii).   No Waiting Period.  If an individual seeks to enroll a dependent during the first thirty (30) days of a dependent special enrollment period, the coverage of the dependent shall become effective:   In the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received;   In the case of a dependent's birth, as of the date of birth; or   In the case of a dependent's adoption or placement for adoption, the date of the adoption or placement for adoption.   Use of Affiliation Period by HMOs as an Alternative to Preexisting Condition Exclusion.  
   Subject to subdivision (a)(2), a group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, may not establish rules for eligibility, including continued eligibility, of any individual to enroll under the terms of the plan based on any of the following health status-related factors in relation to the individual or a dependent of the individual:  Health status;   Medical condition, including both physical and mental illnesses;   Claims experience;   Receipt of health care;   Medical history;   Genetic information;   Evidence of insurability, including conditions arising out of acts of domestic violence; or   Disability.     To the extent consistent with other sections of this part, subdivision (a)(1) shall not be construed to:  Require a group health plan, or group health insurance coverage, to provide particular benefits other than those provided under the terms of the plan or coverage; or   Prevent the plan or coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage.     For purposes of subdivision (a)(1), rules for eligibility to enroll under a plan include rules defining any applicable waiting periods for enrollment.      A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, may not require any individual, as a condition of enrollment or continued enrollment under the plan, to pay a premium or contribution that is greater than the premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status-related factor in relation to the individual or to an individual enrolled under the plan as a dependent of the individual.   Nothing in subdivision (b)(1) shall be construed to:  Restrict the amount that an employer may be charged for coverage under a group health plan; or   Prevent a group health plan, and a health insurance issuer offering group health insurance coverage, from establishing premium discounts or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.       
  Issuance of Coverage in the Small Group Market.  Subject to subsections (b)-(e), each health insurance issuer that offers health insurance coverage in the small group market in this state must accept:  Every small employer in the state that applies for the coverage; and   For enrollment under the coverage every eligible individual who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health plan and may not place any restriction that is inconsistent with  56-7-2804 on an eligible individual being a participant or beneficiary.     Eligible Individual Defined.  As used in this section, eligible individual means, with respect to a health insurance issuer that offers health insurance coverage to a small employer in connection with a group health plan in the small group market, the individual in relation to the employer as shall be determined:  In accordance with the terms of the plan;   As provided by the issuer under rules of the issuer that are uniformly applicable in this state to small employers in the small group market; and   In accordance with all applicable state laws governing the issuer and the market.       Special Rules for Network Plans.  In the case of a health insurance issuer that offers health insurance coverage in the small group market through a network plan, the issuer may:  Limit the employers that may apply for the coverage to those with eligible individuals who live, work, or reside in the service area for the network plan; and   Within the service area of the plan, deny the coverage to the employers if the issuer has demonstrated to the commissioner that:   It will not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees; and   It is applying this subdivision (b)(1)(B) uniformly to all employers without regard to the claims experience of those employers and their employees and their dependents, or any health status-related factor relating to the employees and dependents.       An issuer, upon denying health insurance coverage in any service area in accordance with subdivision (b)(1)(B), may not offer coverage in the small group market within the service area for a period of one hundred eighty (180) days after the date the coverage is denied.     Application of Financial Capacity Limits.  A health insurance issuer may deny health insurance coverage in the small group market if the issuer has demonstrated to the commissioner that:  It does not have the financial reserves necessary to underwrite additional coverage; and   It is applying this subdivision (c)(1) uniformly to all employers in the small group market in this state consistent with applicable state law and without regard to the claims experience of those employers and their employees and their dependents, or any health status-related factor relating to the employees and dependents.     A health insurance issuer upon denying health insurance coverage in connection with group health plans in accordance with subdivision (c)(1) in this state may not offer coverage in connection with group health plans in the small group market in the state for a period of one hundred eighty (180) days after the date the coverage is denied or until the issuer has demonstrated to the commissioner that the issuer has sufficient financial reserves to underwrite additional coverage, whichever is later. The commissioner may provide for the application of this subsection (c) on a service-area-specific basis.     Exception to Requirement for Failure to Meet Certain Minimum Participation or Contribution Rules.  Subsection (a) shall not be construed to preclude a health insurance issuer from establishing employer contribution rules or group participation rules for the offering of health insurance coverage in connection with a health group plan in the small group market, as allowed under applicable state law.   As used in subdivision (d)(1):  Employer contribution rule means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and   Group participation rule means a requirement relating to the minimum number of participants or beneficiaries that must be enrolled in relation to a specified percentage or number of eligible individuals or employees of an employer.       Exception for Coverage Offered Only to Bona Fide Association Members.  Subsection (a) shall not apply to health insurance coverage offered by a health insurance issuer if the coverage is made available in the small group market only through one (1) or more bona fide associations.   In connection with the offering of any health insurance coverage to a small employer, a health insurance issuer:  Shall make a reasonable disclosure to the employer, as part of its solicitation and sales materials, of the availability of information described in subsection (g); and   Upon request of the small employer, provide such information.      Subject to subdivision (g)(3), with respect to a health insurance issuer offering health insurance coverage to a small employer, information described in this subsection (g) is information concerning:  The provisions of the coverage concerning issuer's right to change premium rates and the factors that may affect changes in premium rates;   The provisions of the coverage relating to renewability of coverage;   The provisions of the coverage relating to any preexisting condition exclusion; and   The benefits and premiums available under all health insurance coverage for which the employer is qualified.     Information under this subsection (g) shall be provided to small employers in a manner determined to be understandable by the average small employer, and shall be sufficient to reasonably inform small employers of their rights and obligations under the health insurance coverage.   An issuer is not required to disclose any information under subsection (f) that is proprietary and trade secret information under applicable law.     The requirements of this part addressing the small and large group markets shall not apply to any group health plan, and health insurance coverage offered in connection with a group health plan, for any plan year if, on the first day of the plan year, the plan has fewer than two (2) participants who are current employees.   Rules to be used in the determination of employer size are:  All persons treated as a single employer under  414(b), (c), (m), or (o) of the Internal Revenue Code of 1986 (26 U.S.C.  414(b), (c), (m), and (o)), shall be treated as one (1) employer;   In the case of an employer that was not in existence throughout the preceding calendar year, the determination of whether the employer is a small or large employer shall be based on the average number of employees that it is reasonably expected the employer will employ on business days in the current calendar year; and   Any reference in this subsection (i) to an employer shall include a reference to any predecessor of the employer.     
  If a health insurance issuer offers health insurance coverage in the small or large group market in connection with a group health plan, the issuer must renew or continue in force the coverage at the option of the plan sponsor of the plan except as provided in this section.   General Exceptions.  A health insurance issuer may nonrenew or discontinue health insurance coverage offered in connection with a group health plan in the small or large group market based only on one (1) or more of the following:  The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments;   The plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage;   The plan sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules, as permitted by this part or other applicable insurance law;   The issuer is ceasing to offer coverage in the market in accordance with subsection (c) and other applicable insurance law;   In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, there is no longer any enrollee in connection with the plan who lives, resides, or works in the service area of the issuer, or in the area for which the issuer is authorized to do business, and in the case of the small group market, the issuer would deny enrollment with respect to the plan under  56-7-2805(b)(1)(A); and   In the case of health insurance coverage that is made available in the small or large group market only through one (1) or more bona fide associations, the membership of an employer in the association, on the basis of which the coverage is provided, ceases, but only if the coverage is terminated under this subdivision (b)(6) uniformly without regard to any health status-related factor relating to any covered individual.     Requirements for Uniform Termination of Coverage.  In any case in which an issuer decides to discontinue offering a particular type of group health insurance coverage offered in the small or large group market, coverage of the type may be discontinued by the issuer in accordance with state law in the market only if:  The issuer provides notice to each plan sponsor provided coverage of this type in the market, and participants and beneficiaries covered under the coverage, of the discontinuation at least ninety (90) days prior to the date of the discontinuation of the coverage;   The issuer offers to each plan sponsor provided coverage of this type in the market the option to purchase all, or, in the case of the large group market, any, other health insurance coverage currently being offered by the issuer to a group health plan in the market; and   In exercising the option to discontinue coverage of this type and in offering the option of coverage under subdivision (c)(2)(B), the issuer acts uniformly without regard to the claims experience of those sponsors or any health status-related factor relating to any participants or beneficiaries covered or new participants or beneficiaries who may become eligible for the coverage.      In any case in which a health insurance issuer elects to discontinue offering all health insurance coverage in the small group market or the large group market, or both markets, in this state, health insurance coverage may be discontinued by the issuer only in accordance with applicable state law and if:   The issuer provides notice to the commissioner and to each plan sponsor, and participants and beneficiaries covered under the coverage, of the discontinuation at least one hundred eighty (180) days prior to the date of the discontinuation of the coverage; and   All health insurance issued or delivered for issuance in this state in the market or markets is discontinued and coverage under the health insurance coverage in the market or markets is not renewed.     In the case of a discontinuation under subdivision (c)(2)(A) in a market, the issuer may not provide for the issuance of any health insurance coverage in the market and this state during the five-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed.       Exception for Uniform Modification of Coverage.  At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a product offered to a group health plan:  In the large group market; or   In the small group market if, for coverage that is available in the market other than only through one (1) or more bona fide associations, the modification is consistent with state law and effective on a uniform basis among group health plans with that product.     Application to Coverage Offered Only through Associations.  In applying this section in the case of health insurance coverage that is made available by a health insurance issuer in the small or large group market to employers only through one (1) or more associations, a reference to plan sponsor is deemed, with respect to coverage provided to an employer member of the association, to include a reference to the employer.   
  Limitation on application of provisions relating to group health plans.  The requirements of this part shall apply with respect to group health plans only:  Subject to subdivision (a)(2), in the case of a plan that is a nonfederal governmental plan; and   With respect to health insurance coverage offered in connection with a group health plan, including a plan that is a church plan or a governmental plan.     Treatment of nonfederal governmental plans.  If the plan sponsor of a nonfederal governmental plan that is a group health plan to which this part otherwise applies makes an election under this subdivision (a)(2)(A) pursuant to regulations to be promulgated by the secretary of health and human services, then the requirements of this part insofar as it applies directly to group health plans, and not merely to group health insurance coverage, shall not apply to the governmental plans for the period except as provided in this subdivision (a)(2)(A).   An election under subdivision (a)(2)(A) shall apply:   For a single specified plan year; or   In the case of a plan provided pursuant to a collective bargaining agreement, for the term of the agreement. An election under subdivision (a)(2)(B)(i) may be extended through subsequent elections under this subdivision (a)(2)(B)(ii).     Under such an election, the plan shall provide for:   Notice to enrollees, on an annual basis and at the time of enrollment under the plan, of the fact and consequences of the election; and   Certification and disclosure of creditable coverage under the plan with respect to enrollees.         Exception for Certain Benefits.  The requirements of this part shall not apply to any group health plan or group health insurance coverage in relation to its provision of excepted benefits.   Exception for Certain Benefits if Certain Conditions Met.  Limited, Excepted Benefits.  The requirements of this part shall not apply to any group health plan and group health insurance coverage offered in connection with a group health plan in relation to its provision of excepted benefits, if the benefits:  Are provided under a separate policy, certificate or contract of insurance; or   Are otherwise not an integral part of the plan.     Noncoordinated, Excepted Benefits.  The requirements of this part shall not apply to any group health plan and group health insurance coverage offered in connection with a group health plan in relation to its provision of excepted benefits if all of the following conditions are met:  The benefits are provided under a separate policy, certificate, or contract of insurance;   There is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and   The benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor.     Supplemental Excepted Benefits.  The requirements of this part shall not apply to any group health plan and group health insurance coverage in relation to its provision of excepted benefits, if the benefits are provided under a separate policy, certificate or contract of insurance.     Treatment of Partnerships.  For purposes of this part:  Any plan, fund, or program that would not be, but for this subsection (d), an employee welfare benefit plan and that is established or maintained by a partnership, to the extent that the plan, fund, or program provides medical care, including items and services paid for as medical care, to present or former partners in the partnership or to their dependents, as defined under the terms of the plan, fund, or program, directly or through insurance, reimbursement, or otherwise, shall be treated, subject to subdivision (d)(2), as an employee welfare benefit plan that is a group health plan;   In the case of a group health plan, employer also includes the partnership in relation to any partner; and   Participants of Group Health Plans.  In the case of a group health plan, participant also includes:  In connection with a group health plan maintained by a partnership, an individual who is a partner in relation to the partnership; or   In connection with a group health plan maintained by a self-employed individual, under which one (1) or more employees are participants, the self-employed individual, if such individual is, or may become, eligible to receive a benefit under the plan or the individual's beneficiaries may be eligible to receive any such benefit.       
  Except as modified in this section, this part shall apply with respect to group health plans, and health insurance coverage offered in connection with group health plans, for plan years beginning after June 30, 1997.   Determination of creditable coverage.  Period of coverage.  Subject to subdivision (b)(1)(B), no period before July 1, 1996, shall be taken into account in determining creditable coverage.   The commissioner shall provide for a process whereby individuals who need to establish creditable coverage for periods before July 1, 1996, and who would have coverage credited, but for subdivision (b)(1)(A) may be given credit for creditable coverage for the periods through the presentation of documents or other means.     Certifications.  Subject to subdivisions (b)(2)(B) and (C), the provisions regarding certification shall apply to events occurring after June 30, 1996.   In no case is a certification required to be provided under this subdivision (b)(2) before June 1, 1997.   In the case of an event occurring after June 30, 1996, and before October 1, 1996, a certification is not required to be provided unless an individual, with respect to whom the certification is otherwise required to be made, requests the certification in writing.     Transitional Rule.  In the case of an individual who seeks to establish creditable coverage for any period for which certification is not required because it relates to an event occurring before June 30, 1996:  The individual may present other credible evidence of coverage in order to establish the period of creditable coverage; and   A group health plan and a health insurance issuer shall not be subject to any penalty or enforcement action with respect to the plan's or issuer's crediting or not crediting coverage if the plan or issuer has sought to comply in good faith with the applicable requirements under this section.        Except as provided in subdivision (b)(2), in the case of a group health plan maintained pursuant to one (1) or more collective bargaining agreements between employee representatives and one (1) or more employers ratified before April 30, 1997, this part shall not apply to plan years beginning before the later of the date on which the last of the collective bargaining agreements relating to the plan terminates, determined without regard to any extension of the collective bargaining agreements agreed to after April 30, 1997, or July 1, 1997.   Any plan amendment made pursuant to a collective bargaining agreement relating to the plan that amends the plan solely to conform to any requirement of this part shall not be treated as a termination of the collective bargaining agreement.     
  On and after July 1, 1997, each health insurance issuer that offers individual health insurance coverage in this state must offer to and accept for enrollment every eligible individual who applies for coverage without imposing any preexisting condition exclusion with respect to the coverage.   As used in this section, eligible individual means an individual:  For whom, as of the date on which the individual seeks coverage under this section, the aggregate of periods of creditable coverage is eighteen (18) or more months and whose most recent prior creditable coverage was under a group health plan, governmental plan, or church plan, or health insurance coverage offered in connection with the plan;   Who is not eligible for coverage under a group health plan, Title XVII of the Social Security Act, Part A or Part B (42 U.S.C.  1391 et seq.), or state coverage pursuant to Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), or any successor program, and does not have other health insurance coverage;   Whose most recent coverage within the coverage period described in subdivision (b)(1) was not terminated based on nonpayment of premiums or fraud; and   Who, if offered the option of continuation coverage, accepted the coverage and exhausted the coverage.     Alternative Coverage Permitted.  In General.  The health insurance issuer may elect to limit the coverage offered under subsection (a) so long as it offers at least two (2) different policy forms of health insurance coverage, both of which:   Are designed for, made generally available to, and actively marketed to, and enroll both eligible and other individuals by the issuer; and   Meet the requirement of subdivision (c)(2) or (c)(3), as elected by the issuer.     For purposes of this subsection (c), policy forms that have different cost-sharing arrangements or different riders shall be considered to be different policy forms.     Choice of Most Popular Policy Forms.  The requirement of this subdivision (c)(2) is met, for health insurance coverage policy forms offered by an issuer in the individual market, if the issuer offers the policy forms for individual health insurance coverage with the largest, and next to largest, premium volume of all the policy forms offered by the issuer in this state or applicable marketing or service area, as may be prescribed in regulation, by the issuer in the individual market in the period involved.   Choice of Two (2) Policy Forms with Representative Coverage.  The requirement of this subdivision (c)(3)(A) is met, for health insurance coverage policy forms offered by an issuer in the individual market, if the issuer offers a lower-level coverage policy form, as defined in subdivision (c)(3)(B), and a higher-level coverage policy form, as defined in subdivision (c)(3)(C), each of which includes benefits substantially similar to other individual health insurance coverage offered by the issuer in that state and each of which is covered under a mechanism that provides for risk adjustment, risk spreading or a risk spreading mechanism, among issuers or policies of an issuer, or otherwise provides for some financial subsidization for eligible individuals, including through assistance to participating issuers.   A lower-level of coverage policy form provides that the actuarial value of the benefits under the coverage is at least eighty-five percent (85%) but not greater than one hundred percent (100%) of a weighted average, described in subdivision (c)(3)(D).   A higher-level of coverage policy form provides that:   The actuarial value of the benefits under the coverage is at least fifteen percent (15%) greater than the actuarial value of the coverage described in subdivision (c)(3)(B) offered by the issuer in the area involved; and   The actuarial value of the benefits under the coverage is at least one hundred percent (100%) but not greater than one hundred twenty percent (120%) of a weighted average, described in subdivision (c)(3)(D).     For purposes of this subdivision (c)(3), the weighted average is the average actuarial value of the benefits provided by all the health insurance coverage issued, as elected by the issuer, either by that issuer or by all issuers in this state in the individual market during the previous year, not including coverage issued under this section, weighted by enrollment for the different coverage.     The issuer elections under subdivision (c)(1) shall apply uniformly to all eligible individuals in this state for that issuer. The election shall be made to the commissioner and shall be effective for no less than a two-year period. All elections shall be in a form and manner as prescribed by the commissioner.   For purposes of subdivision (c)(3), the actuarial value of benefits provided under individual health insurance coverage shall be calculated based on a standardized population and a set of standardized utilization and cost factors.     Special Rules for Network Plans.  In the case of a health insurance issuer that offers health insurance coverage in the individual market through a network plan, the issuer may:  Limit the individuals who may be enrolled under the coverage to those who live, reside, or work within the service area for the network plan; and   Within the service area of the plan, deny the coverage to the individuals if the issuer has demonstrated to the commissioner that it will not have the capacity to deliver services adequately to additional individual enrollees because of its obligations to existing group contract holders and enrollees and individual enrollees and it is applying this subdivision (d)(1)(B) uniformly to individuals without regard to any health status-related factor of the individuals and without regard to whether the individuals are eligible individuals.     An issuer, upon denying health insurance coverage in any service area in accordance with subdivision (d)(1)(B), may not offer coverage in the individual market within the service area for a period of one hundred eighty (180) days after the coverage is denied.     Application of Financial Capacity Limits.  A health insurance issuer may deny health insurance coverage in the individual market to an eligible individual if the issuer has demonstrated to the commissioner that:  It does not have the financial reserves necessary to underwrite additional coverage; and   It is applying this subdivision (e)(1) uniformly to all individuals in the individual market in the state and without regard to any health status-related factor of the individuals and without regard to whether the individuals are eligible individuals.     An issuer, upon denying individual health insurance coverage in accordance with subdivision (e)(1), may not offer the coverage in the individual market within the service area for a period of one hundred eighty (180) days after the date the coverage is denied or until the issuer has demonstrated to the commissioner that the issuer has sufficient financial reserves to underwrite additional coverage, whichever is later.   This subsection (e) may be applied on a service-area specific basis.     Subsection (a) shall not require a health insurance issuer offering health insurance coverage only in connection with group health plans or through bona fide associations to offer health insurance coverage in the individual market.   
  A health insurance issuer that provides individual health insurance coverage to an individual shall renew or continue in force the coverage at the option of the individual for all such coverage in effect on or after July 1, 1997, except as provided in this section.   A health insurance issuer may nonrenew or discontinue health insurance coverage of an individual in the individual market based only on one (1) or more of the following:  The individual has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments;   The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage;   The issuer is ceasing to offer coverage in the individual market in accordance with subsection (c) and other applicable insurance law;   In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, the individual no longer resides, lives, or works in the service area, or in an area for which the issuer is authorized to do business, but only if the coverage is terminated under this subdivision (b)(4) uniformly without regard to any health status-related factor of covered individuals; and   In the case of health insurance coverage that is made available in the individual market only through one (1) or more bona fide associations, the membership of the individual in the association, on the basis of which the coverage is provided, ceases, but only if the coverage is terminated under this subdivision (b)(5) uniformly without regard to any health status-related factor of covered individuals.     In any case in which an issuer decides to discontinue offering a particular type of health insurance coverage offered in the individual market, coverage of the type may be discontinued by the issuer only if:  The issuer provides notice to each covered individual provided coverage of this type in the market of the discontinuation at least ninety (90) days prior to the date of the discontinuation of the coverage;   The issuer offers to each individual in the individual market provided coverage of this type, the option to purchase any other individual health insurance coverage currently being offered by the issuer for individuals in the market; and   In exercising the option to discontinue coverage of this type and in offering the option of coverage under subdivision (c)(2), the issuer acts uniformly without regard to any health status-related factor of enrolled individuals or individuals who may become eligible for the coverage.      Subject to subdivision (d)(2), in any case in which a health insurance issuer elects to discontinue offering all health insurance coverage in the individual market in this state, health insurance coverage may be discontinued by the issuer only if:  The issuer provides notice to the commissioner and to each individual of the discontinuation at least one hundred eighty (180) days prior to the date of the expiration of the coverage; and   All health insurance issued or delivered for issuance in this state in the market is discontinued and coverage under the health insurance coverage in the market is not renewed.     In the case of a discontinuation under subdivision (d)(1)(A) in the individual market, the issuer may not provide for the issuance of any health insurance coverage in the individual market in the state during the five-year period beginning on this date of the discontinuation of the last health insurance coverage not so renewed.   The commissioner may waive subdivision (d)(2) upon written request by a health insurance issuer that demonstrates to the satisfaction of the commissioner that a waiver would benefit insurance consumers in this state and would strengthen the individual market.     At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a policy form offered to individuals in the individual market so long as the modification is consistent with state law and effective on a uniform basis among all individuals with that policy form.   In applying this section in the case of health insurance coverage that is made available by a health insurance issuer in the individual market to individuals only through one (1) or more associations, a reference to an individual is deemed to include a reference to the association of which the individual is a member.   
 The provisions for certification and disclosure of coverage shall apply to health insurance coverage offered by a health insurance issuer in the individual market in the same manner as it applies to health insurance coverage offered by a health insurance issuer in connection with a group health plan in the small or large group market.  
 The individual market requirements of this part shall not apply to any health insurance coverage in relation to its provision of excepted benefits described in  56-7-2802(10)(A) or to those described in  56-7-2802(10)(B), (C), or (D) if the benefits are provided under a separate policy, certificate or contract of insurance. A health insurance issuer offering health insurance coverage in connection with group health plans shall not be deemed to be a health insurance issuer offering individual health insurance coverage solely because the issuer offers a conversion policy.  
  This part is supplemental to any other laws of this state; however, to the extent that this part is in conflict with other insurance law, this part shall control.   No enforcement action shall be taken, pursuant to this part, against a group health plan or health insurance issuer with respect to a violation of a requirement imposed by this part before January 1, 1998, or, if later, the date of issuance of the federal regulations to be issued pursuant to the federal act if the plan or issuer has sought to comply in good faith with the requirements.   
 It is the intent of this part to meet the minimum standards established by the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) (42 U.S.C.  1320d et seq.), and the rules and regulations to be promulgated by federal authorities in connection with HIPAA. The commissioner is, therefore, authorized to promulgate rules and regulations according to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, as may be necessary to ensure compliance with the federal law as well as those rules necessary to carry out the proper administration of this part.  
 This part shall be known and may be cited as the Access Tennessee Act of 2006.  
 As used in this part, unless the context otherwise requires:   Access Tennessee means the nonprofit entity created pursuant to  56-7-2903(a);   Board means the Access Tennessee board of directors established pursuant to  56-7-2903(b);   Church plan has the meaning given the term under ERISA, in 29 U.S.C.  1002(33);   COBRA continuation coverage refers to continuation of coverage offered pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (42 U.S.C.  300bb-1 et seq.);   Commissioner means the commissioner of finance and administration;    Creditable coverage means, with respect to an individual, coverage of the individual that provides the minimum essential coverage required under 26 U.S.C.  5000A;   A period of creditable coverage shall not be counted, with respect to the enrollment of an individual who seeks coverage under this part, if, after the period and before the enrollment date, the individual experiences a significant break in coverage;     Department means the department of finance and administration;   ERISA means the Employee Retirement Income Security Act of 1974 (29 U.S.C.  1001 et seq.);   Federally defined eligible individual means an individual:  For whom, as of the date on which the individual seeks coverage under this part, the aggregate of the periods of creditable coverage is eighteen (18) or more months;   Whose most recent prior creditable coverage was under a group health plan, governmental plan, church plan, or plan described in  56-2-121(a), or health insurance coverage offered in connection with the plan;   Who is not eligible for coverage under a group health plan, medicare, medicaid, or any successor program, and who does not have other health insurance coverage;   With respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud;   Who, if offered the option of continuation of coverage under a COBRA continuation coverage provision or under a similar state program, elected the coverage; and   Who has exhausted the continuation coverage described in subdivision (9)(E);     Fund means the Access Tennessee health insurance program fund established by  56-7-2911(d);   Governmental plan has the meaning under ERISA, in 29 U.S.C.  1002(32);   Group health plan means an employee welfare benefit plan as defined in ERISA, in 29 U.S.C.  1002(1), to the extent that the plan provides medical care, as defined in subdivision (19), and including items and services paid for as medical care to employees or their dependents as defined under the terms of the plan directly or through insurance, reimbursement or otherwise;    Health insurance coverage means any hospital and medical expense incurred policy, nonprofit health care service plan contract, health maintenance organization subscriber contract, or any other health care plan or arrangement that pays for or furnishes medical or health care services, whether by insurance or otherwise;   Health insurance coverage shall not include one (1) or more, or any combination of, the following:   Coverage only for accident or disability income insurance, or any combination of accident and disability income insurance;   Coverage issued as a supplement to liability insurance;   Liability insurance, including general liability insurance and automobile liability insurance;   Workers' compensation or similar insurance;   Automobile medical payment insurance;   Credit-only insurance;   Coverage for on-site medical clinics; and   Other similar insurance coverage, specified in federal regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (42 U.S.C.  1320d et seq.), under which benefits for medical care are secondary or incidental to other insurance benefits;     Health insurance coverage shall not include the following benefits, if they are provided under a separate policy, certificate or contract of insurance or are otherwise not an integral part of the coverage:   Limited scope dental or vision benefits;   Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or   Other similar, limited benefits specified in federal regulations issued pursuant to HIPAA;     Health insurance coverage shall not include the following benefits, if the benefits are provided under a separate policy, certificate or contract of insurance, there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor, and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor:   Coverage only for a specified disease or illness; or   Hospital indemnity or other fixed indemnity insurance; and     Health insurance coverage shall not include the following, if offered as a separate policy, certificate or contract of insurance:   Medicare supplemental health insurance, as defined under  1882(g)(1) of the Social Security Act (42 U.S.C.  1395ss(g)(1));   Coverage supplemental to the coverage provided under the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) (10 U.S.C.  1071 et seq.); or   Similar supplemental coverage provided to coverage under a group health plan;       Health maintenance organization means an organization as defined in  56-32-102;   Hospital means a licensed public or private institution as defined in  68-11-201;   Insurance arrangement means, to the extent permitted by ERISA, any plan, program, contract or other arrangement under which one (1) or more employers, unions or other organizations provide to their employees or members, either directly or indirectly through a trust or third party administration, health care services or benefits other than through an insurer, and shall include any plan described in  56-2-121(a);   Insurer means any entity that provides health insurance coverage in this state. For the purposes of this part, insurer includes, but is not limited to, an insurance company, a health maintenance organization, a preferred provider organization, a hospital and medical service corporation, a surplus lines insurer, an insurer providing stop-loss or excess loss insurance to a group health plan, a reinsurer reinsuring health insurance in this state, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation;   Medicaid means the federal- and state-financed, state-run program of medical assistance established pursuant to Title XIX of the Social Security Act (42 U.S.C.  1396 et seq.), and any waivers thereof;   Medical care means:  The diagnosis, care, mitigation, treatment, or prevention of disease;   Transportation primarily for and essential to medical care referred to in subdivision (19)(A); and   Insurance covering medical care referred to in subdivisions (19)(A) and (B);     Medicare means coverage under Parts A and/or B of Title XVIII of the Social Security Act (42 U.S.C.  1395 et seq.);   Plan of operation means the articles, bylaws, and operating rules and procedures adopted by the board pursuant to  56-7-2903(i);   Program means the Access Tennessee health insurance program, created in  56-7-2903(a);   Resident means an individual who is legally domiciled in Tennessee;   Significant break in coverage means a period of sixty-three (63) consecutive days during all of which the individual does not have any creditable coverage, except that neither a waiting period nor an affiliation period is taken into account in determining a significant break in coverage;   Third party administrator means any entity that, on behalf of an insurer or insurance arrangement, provides health insurance coverage to individuals in this state, receives or collects charges, contributions or premiums for, or adjudicates, processes or settles claims in connection with, any type of health benefit provided in or as an alternative to health insurance coverage; and   Unfair referral means a referral to the program described in  56-7-2908(h).   
  There is created a nonprofit entity known as Access Tennessee to operate a program to provide health insurance coverage pursuant to this part. The program shall be known as the Access Tennessee health insurance program.   Access Tennessee shall operate the program subject to the supervision and control of a board of directors composed of fourteen (14) members. The commissioner shall, within ninety (90) days after July 1, 2006, give notice to all insurers of the time and place for the initial organizational meeting of the board. The board shall consist of the following members:  The commissioner of finance and administration or the commissioner's designee;   The commissioner of health or the commissioner's designee;   The commissioner of mental health and substance abuse services or the commissioner's designee;   One (1) representative of the Tennessee Hospital Association, selected by the commissioner;   One (1) representative of the Tennessee Medical Association, selected by the commissioner;   One (1) member involved primarily as a producer in the business of health insurance, selected by the commissioner;   One (1) member of the general public, selected by the commissioner;   One (1) member selected by the speaker of the house of representatives;   One (1) member selected by the speaker of the senate;   One (1) representative of an employer of greater than or equal to five hundred (500) employees that is self-insured, selected by the commissioner;   One (1) representative of an employer of less than five hundred (500) employees that is commercially insured, selected by the commissioner;   One (1) representative of a hospital medical service corporation, selected by the commissioner, unless, pursuant to subsection (d), no such representative is able to serve, in which case this position shall be filled by a representative of another insurer;   One (1) representative of an insurer other than a hospital medical service corporation, selected by the commissioner, unless, pursuant to subsection (d), no such representative is able to serve, in which case this position shall be filled by a representative of another insurer; and   The commissioner of intellectual and developmental disabilities or the commissioner's designee.     The commissioner and the speakers of the senate and the house of representatives, in making appointments to the board, shall strive to ensure that the membership of the board is representative of the state's geographic and demographic composition, with appropriate attention to the representation of women and minorities.   No individual representing an entity selected to administer the program, pursuant to  56-7-2909, or its affiliates shall serve on the board. Any appointed board member who represents an entity or affiliate that has the intention of serving as administrator of the program shall be prohibited from serving as the administrator, unless the board member provides written notice to the board of the entity's or affiliate's intent to bid on the contract for administrator. The notice shall be delivered to the board at least six (6) months prior to the release of any request for proposal (RFP) seeking to select or renew an administrator. In the event the notice is delivered, the board member shall simultaneously resign the board member's membership on the board.   The commissioner shall, on an annual basis, designate one (1) member of the board to serve as chair and one (1) member of the board to serve as vice chair.   The board members selected pursuant to subdivisions (b)(4), (5) and (6) shall serve for an original term of one (1) year. The board members selected pursuant to subdivisions (b)(8), (9), (12) and (13) shall serve for an original term of two (2) years. The board members selected pursuant to subdivisions (b)(7), (10) and (11) shall serve for an original term of three (3) years. Thereafter, all board members selected pursuant to subdivisions (b)(4) - (11) shall serve for a term of three (3) years. Board members appointed pursuant to subdivisions (b)(12) and (13) shall not be appointed to the board until after Access Tennessee awards an initial contract to an administrator of the program.   Board members shall receive no compensation, but shall be reimbursed for all travel expenses in accordance with state travel regulations.   Vacancies in the board shall be filled by the appropriate appointing authority. Board members may be removed by their respective appointing authority for cause.   In order to assist the board, there shall be an advisory committee consisting of five (5) representatives of insurers that offer health insurance coverage in this state who shall be selected by the commissioner. The advisory committee may provide advice on insurance related issues, including, but not limited to, benefit design and market impact of the plans created and offered by Access Tennessee.   The board, on an annual basis, shall submit to the commissioner and the comptroller of the treasury a funding plan and a plan for operation of the program and any amendments necessary or suitable to assure the fair, reasonable and efficient administration of the program and its financial solvency, based upon timely and accurate actuarial assumptions. The plan of operation shall become effective upon approval, in writing, by the commissioner and the comptroller of the treasury.   The commissioner and the comptroller of the treasury shall approve the funding plan and the plan of operation, if they determine that the plans assure the financial solvency of the program, the efficient administration of the program, and otherwise are in compliance with this part.   If the board fails to submit a suitable plan of operation within one hundred eighty (180) days after the appointment of the board or at any time thereafter fails to submit suitable amendments to the plan of operation, the commissioner may initiate actions necessary or advisable to effectuate this part. The actions shall continue in effect until modified by the commissioner or superseded by a plan of operation submitted by the board and approved by the commissioner and the comptroller. To the extent that the actions include the promulgation of rules to effectuate this part, the rules shall be promulgated as emergency rules pursuant to  4-5-208.   The plan of operation shall:  Establish procedures for operation of the program;   Establish procedures for selecting an administrator, in accordance with  56-7-2909;   Establish procedures to create a fund, under management of the board, for administrative expenses;   Establish procedures for the handling, accounting, and auditing of assets, moneys and claims of the program and the program administrator;   Develop and implement a program to publicize the existence of the program, the eligibility requirements, and procedures for enrollment, and to maintain public awareness of the program;   Establish procedures under which applicants and participants may have grievances reviewed by a grievance committee appointed by the board. The grievances shall be reported to the board after completion of the review. The board shall retain all written complaints regarding the plan for at least three (3) years;   Establish procedures to implement the requirements of  56-7-2909(g); and   Provide for other matters as may be necessary and proper for the execution of the board's powers, duties and obligations under this part.     The funding plan shall:  Establish premium rates for the upcoming year, pursuant to  56-7-2911(a);   Establish an assessment rate for insurers and insurance arrangements, pursuant to  56-7-2911(a)(2); provided, however, that the total amount of the assessments authorized under  56-7-2911(a)(2) for a fiscal year shall not exceed the amount appropriated by the state to the program for that same fiscal year; and   Identify other available funds for the program, including any legislative appropriations and federal funding.     There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner or the board members, or any of their employees or agents, for any omission or any action taken by them within the scope of their duties arising from this part, except for willful, malicious or criminal acts or omissions done for personal gain.   
 Access Tennessee has the general powers and authority granted under the laws of this state to insurance companies licensed to transact the kinds of insurance defined under  56-2-201. In addition, Access Tennessee has the specific power to:   Enter into contracts as are necessary or proper to carry out the provisions and purposes of this part, including the authority, with the approval of the commissioner, to enter into contracts with similar programs in other states for the joint performance of common administrative functions, or with persons, other organizations or other state agencies for the performance of administrative functions;    Sue or be sued, including taking any legal actions necessary or proper to:   Avoid the payment of improper claims against the program or the coverage provided by or through the program;   Recover any amounts erroneously or improperly paid by the program;   Recover any amounts paid by the program as a result of mistake of fact or law; or   Recover other amounts due the program.     For purposes of subdivision (2)(A), as well as for legal representation of Access Tennessee, Access Tennessee is considered to be an instrumentality of the state for the purpose of being represented by the attorney general and reporter, pursuant to  8-6-109;     Establish and modify, from time to time as appropriate, rates, rate schedules, rate adjustments, expense allowances, agent referral fees, claim reserve formulas and any other actuarial function appropriate to the operation of the program. Rates shall be determined in relation to the coverage provided, the risk experience, and expenses of providing coverage. Rates and risk schedules may be adjusted for age, tobacco use and weight and shall take into consideration appropriate factors in accordance with established actuarial and underwriting practices;   Establish a program to provide premium assistance to low income individuals eligible to participate in the program;   Purchase or issue policies of insurance in accordance with the requirements of this part;   Appoint appropriate legal, actuarial and other committees as necessary, including advisory committees of external experts, to provide technical assistance in the operation of the program, policy and other contract design, and assistance with any other function within the authority of Access Tennessee;   Request an annual audit by the comptroller of the treasury, as otherwise provided by law, or, with the prior written approval of the comptroller of the treasury, contract with an independent public accountant for the audit;   Determine the eligibility requirements for program participants, in accordance with this part;   Establish at least two (2) coverage options, pursuant to  56-7-2910;   Employ and set the compensation of, or contract with, any persons or entities necessary to assist Access Tennessee in carrying out its responsibilities and functions;   Provide for reinsurance of risks incurred by the program;   Issue additional types of health insurance policies to provide optional coverage;   Provide for and employ cost containment measures and requirements, including, but not limited to, preadmission screening, second surgical opinion, concurrent utilization review, disease management and individual case management, for the purpose of making the program more cost effective;   Design, utilize, contract or otherwise arrange for the delivery of cost effective health care services, including establishing or contracting with preferred provider organizations, health maintenance organizations and other limited network provider arrangements; and   Adopt bylaws, policies, procedures and a plan document detailing program benefits as may be necessary or convenient for the implementation of this part and the operation of the program.   
 Beginning by October 1, 2007, Access Tennessee shall make an annual report to the governor and comptroller of the treasury, to be submitted by October 1 of each year. The report shall be in a form approved by the commissioner and shall summarize the activities of Access Tennessee in the preceding calendar year, including the net written and earned premiums, enrollment, the expense of administration, and the paid and incurred losses. The report shall also include an evaluation of the ability of low income individuals to participate in the program.  
 The commissioner may, by rule, establish additional powers and duties of Access Tennessee and may adopt rules necessary and proper to implement this part. The rules shall be promulgated as emergency rules pursuant to  4-5-208. The rules shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 The commissioner and the comptroller of the treasury have the authority to review and audit the expenditure of funds made under this part. Nothing in this section shall limit the authority of the commissioner to ensure that program expenditures are maintained within legislative appropriations.  
  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.   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.   To the extent allowed under federal law, the board may establish eligibility criteria to provide program coverage for individuals not specified in subsection (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:   A requirement that an individual be a resident of Tennessee for at least six (6) months;   A requirement that an individual not have had health insurance coverage in the previous six (6) months;   A requirement that an individual not have access to health insurance coverage at the time of application to the program;   A requirement that an individual exhaust any option of continuation coverage under a group or individual health insurance plan, including COBRA continuation coverage; and   A requirement that the person not have coverage pursuant to  56-7-2809.     The board shall establish procedures to verify that the criteria in subdivisions (c)(1)(A)(i)-(v) have been met.     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.   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 list of medical or health conditions for which a person shall be eligible for program coverage without applying for health insurance;   A requirement that an individual be uninsured for a specified period of time prior to obtaining program coverage;   Minimum residency requirements;   Citizenship requirements; or   Any other eligibility criteria that the board deems appropriate that are not in conflict with this part.       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.    A person shall not be eligible for coverage through the program, if:  The person is determined to be eligible for health benefits under medicaid;   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;   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   The person has had prior coverage with the program terminated for fraud.     The board may establish additional criteria disqualifying individuals for program coverage; provided, that the criteria do not apply to federally defined eligible individuals.     Program coverage shall cease:  On the date a person is no longer a resident of Tennessee;   On the date a person requests coverage to end;   Upon the death of the covered person;   On the date state law requires cancellation of the policy;   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;   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   On the date a person becomes eligible for coverage by another plan through the person's spouse or dependent.     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.   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).   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.   
  The board shall provide for administration of the program by electing, in its plan of operation, to have the program administered in either or both of the following manners:  By the commissioner; or   By using a competitive procurement process to select one (1) or more insurers or third party administrators to administer the program.     If the board elects to use a competitive procurement process to select an insurer or administrator, the board shall evaluate proposals submitted based on criteria established by the board, which shall include, but need not be limited to:  The insurer's or administrator's demonstrated ability to handle health insurance coverage for individuals;   The efficiency and timeliness of the insurer's or administrator's claim processing and payment procedures;   The fees proposed to discharge the insurer's or administrator's responsibility;   The insurer's or administrator's ability to apply effective cost containment programs and procedures and to administer the program in a cost-efficient manner;   The insurer's or administrator's ability to implement effective disease and/or case management programs;   The availability of a network of providers for the program; and   The financial condition and stability of the insurer or administrator.     A contracted insurer or administrator shall serve for a period specified in the contract between Access Tennessee and the selected insurer or administrator, subject to removal for cause and subject to any terms, conditions, and limitations of the contract.   At least one (1) year prior to the expiration of each period of service by a selected insurer or administrator, the board shall invite eligible entities, including the current insurer or administrator, to submit proposals to serve for the succeeding period. Selection of the succeeding insurer or administrator shall be made at least six (6) months prior to the end of the current period.   An insurer or administrator shall perform functions relating to the program that may be assigned to it, including:  Determination of eligibility and collection of information regarding unfair referrals;   Payment of claims based on rates established by the insurer or administrator;   Establishment of a premium billing procedure for collection of premiums from persons covered under the program;   Making available information relating to the proper manner of submitting a claim for payments and distribution forms upon which submission shall be made; and   Performance of other functions necessary to assure timely payment of benefits to providers of services to persons covered under the program.     An insurer or administrator shall submit regular reports to Access Tennessee, as required by the board regarding the operation of the program. The frequency, content, and form of the report shall be specified in the contract between Access Tennessee and the insurer or administrator.   Following the close of each calendar year, the insurer or administrator shall determine net written and earned premiums, other state or federal funding received by the program, the expense of administration, and the paid and incurred losses for the year, taking into account investment income and other appropriate gains and losses. The administrator shall report this information to the board, the department and the comptroller of the treasury on a form prescribed by the commissioner.   A contracted insurer or administrator shall be paid as provided in the contract between Access Tennessee and the contractor.   
  The program shall offer at least one (1) form of coverage to each eligible person. Coverage may be modeled after one (1) of the healthcare options offered to state employees pursuant to  8-27-201, [repealed and reenacted; See Compiler's Notes.] or may combine a health savings account with a high deductible health plan. Coverage may also be obtained through the commercial market. The board may adopt other coverage options as appropriate.   The board, with the approval of the commissioner, shall establish:  The coverage to be provided by each option;   The applicable schedule of benefits; and   Any exclusions to coverage and other limitations.     In establishing subsection (b), the board shall take into consideration the levels of health insurance coverage provided in the state and medical economic factors as may be deemed appropriate, and shall promulgate benefit levels, deductibles, coinsurance factors, exclusions, and limitations determined to be generally reflective of and commensurate with health insurance coverage provided through a representative number of large employers in Tennessee.   The coverage options offered by the program shall not be required to provide the mandated coverage or the mandated offers of coverage required pursuant to part 23, 24, 25 or 26 of this chapter.   Program coverage may exclude charges or expenses incurred during a period of time not to exceed twelve (12) months following the effective date of coverage, as to any condition that, during a period not to exceed six (6) months immediately preceding the effective date of coverage, had manifested itself in such a manner as would cause an ordinarily prudent person to seek diagnosis, care or treatment or for which medical advice, care or treatment was recommended or received as to the condition. The preexisting condition exclusion shall be waived to the extent to which similar exclusions, if any, have been satisfied under any prior health insurance coverage that was involuntarily terminated, if the application for program coverage is made not later than sixty-three (63) days following the involuntary termination. In that case, coverage in the program shall be effective from the date on which the prior coverage was terminated. The exclusions may not be applied to a federally defined eligible individual.   Access Tennessee shall have a cause of action against an eligible person for the recovery of the amount of benefits paid that are not for covered expenses. Benefits due from the program may be reduced or refused as a set-off against any amount recoverable under this subsection (f).   Nothing in this part shall be construed to prohibit Access Tennessee from issuing additional types of health insurance policies with different types of benefits that, in the opinion of the board, may be of benefit to those individuals otherwise eligible for coverage.   Notwithstanding this part to the contrary, no person shall be eligible for coverage through the program who is not already enrolled in the program prior to April 22, 2015.   
  The program shall be funded in the manner set forth as follows:  Premiums.  The board shall establish premium rates for program coverage as provided in subdivision (1)(B). Separate schedules of premium rates based on age, tobacco use and weight may apply for individual risks. Premium rates and schedules shall be submitted to the commissioner for approval prior to use.   The board, with the assistance of the commissioner, shall determine a standard risk rate by considering the premium rates charged by other insurers offering health insurance coverage to individuals. The standard risk rate shall be established using reasonable actuarial techniques, and shall reflect anticipated experience and expenses for the coverage. Initial rates for program coverage shall not be less than one hundred fifty percent (150%) of rates established as applicable for individual standard risks. Subject to the limits provided in this subdivision (a)(1)(B), subsequent rates shall be established to provide fully for the expected costs of claims, including recovery of prior losses, expenses of operation, investment income of claim reserves, and any other cost factors subject to the limitations described herein. In no event shall program rates exceed two hundred percent (200%) of rates applicable to individual standard risks.   Following the close of each fiscal year, the commissioner shall prepare a report analyzing the program's projected revenues and expenditures and funding requirements. The commissioner shall present this report, together with the board's comments, to the governor with a recommendation for the funding of the program.     Sources of Additional Revenue.  The deficit incurred by the program, reported by the insurer or administrator pursuant to  56-7-2909(g), shall be funded through state appropriations and an assessment on insurers, insurance arrangements and third party administrators.   The board is authorized to determine the amount and allocation of any assessments and advance interim assessments on insurers, insurance arrangements and third party administrators in accordance with this section and subject to approval by the commissioner. The commissioner shall have the authority to assess insurers, insurance arrangements, and third party administrators, and to make advance interim assessments as may be reasonable and necessary for the program's organizational and interim operating expenses. Any interim assessments are to be credited as offsets against any regular assessments due following the close of the fiscal year. The assessments must be presented to the department of commerce and insurance to advise whether the assessment will create a hazardous operational or financial condition for the insurer, insurance arrangement, or third party administrator.   The assessment for each individual insurer, insurance arrangement and third party administrator shall be determined by multiplying the total assessment of all insurers, insurance arrangements and third party administrators as determined in subdivision (a)(2)(B) by a fraction, the numerator of which equals the number of individuals in Tennessee covered by each individual insurer, insurance arrangement and third party administrator, and the denominator of which equals the total number of all individuals in Tennessee covered by insurers, insurance arrangements and third party administrators, all determined as of the end of the prior calendar year.   The board shall make reasonable efforts designed to ensure that each individual covered by insurers, insurance arrangements and third party administrators is counted only once with respect to any assessment. For that purpose, the board shall:   Require each insurer and insurance arrangement that obtains excess or stop loss insurance to include in its count of insured individuals all individuals whose coverage is reinsured, including by way of excess or stop loss coverage, in whole or part;   Require each insurer and insurance arrangement that contracts with a third party administrator to include in its count of insured individuals all individuals whose coverage is administered in whole or part by a third party administrator;   Require each insurer that is an excess or stop loss insurer to include in its count of insured individuals all individuals covered through an insurance arrangement;   Require each third party administrator to include in its count of insured individuals all individuals covered through an insurance arrangement;   Permit an insurer who is an excess or stop loss insurer to exclude from its number of insured individuals those who have been counted by the primary insurer or by the primary reinsurer or primary excess or stop loss insurer for the purpose of determining its assessment under this subdivision (a)(2);   Permit a third party administrator to exclude from its number of insured individuals those who have been counted by an insurer; and   Permit an insurance arrangement to exclude from its number of insured individuals those who have been counted by an excess or stop loss insurer or third party administrator.     The amount of the assessment of each insurer, insurance arrangement or third party administrator shall be determined by the board based on annual statements and other reports deemed to be necessary by the board and filed by the participating insurer with the board or through other reporting mechanisms established by the department of commerce and insurance. The board may use any reasonable method of estimating the number of individuals covered by an insurer or insurance arrangement if the specific number is unknown. With respect to insurers that are reinsurers or excess or stop loss insurers, the board may use any reasonable method of estimating the number of persons insured by each reinsurer or excess or stop loss insurer. The commissioner shall approve and may make modifications to the board's determination of amounts and allocations of the assessments, and shall have the authority to issue and collect the assessments.   An insurer, insurance arrangement or third party administrator may petition the commissioner for an abatement or deferment of all or part of an assessment imposed pursuant to this section. The commissioner, in consultation with the commissioner of commerce and insurance, may abate or defer, in whole or in part, the assessment if, in the opinion of the commissioner, payments of the assessment would endanger the ability of the insurer, insurance arrangement or third party administrator to fulfill its contractual obligations. In the event an assessment against an insurer, insurance arrangement or third party administrator is abated or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other insurers, insurance arrangements and third party administrators in a manner consistent with the basis for assessments set forth in this subsection (a). The insurer, insurance arrangement or third party administrator receiving the abatement or deferment shall remain liable to the program for the deficiency for four (4) years.       The board shall operate the program in a manner so that the estimated cost of providing health insurance coverage during any fiscal year will not exceed total income the program expects to receive from policy premiums, assessments, funds appropriated by the state legislature, and moneys received under subsection (c). After determining the amount of funds appropriated to it for a fiscal year, the board shall estimate the number of new policies it believes the program has the financial capacity to insure during that year so that costs do not exceed income. The board shall take steps necessary to assure that program enrollment does not exceed the number of residents it has estimated it has the financial capacity to insure.   The board may make application for any federal grants or other federal sources under which the program may be eligible to receive moneys.   Program Fund.  The Access Tennessee health insurance program fund shall be established as a separate account in the state treasury.   Moneys in the fund, including interest earned on the moneys, shall be invested by the state treasurer, pursuant to  9-4-602 and 9-4-603 for the sole benefit of the fund.   Any moneys remaining in the fund at the end of the fiscal year shall not revert to the general fund, but shall be brought forward to the next fiscal year for the exclusive benefit of the fund's payment of future expenses.   The fund shall be subject to audit by the comptroller of the treasury.     
 The office of inspector general, created pursuant to  71-5-2502, shall have the authority to investigate civil and criminal fraud and abuse of Access Tennessee, or any other violations of state criminal law related to the operation of the program. The powers of the office of inspector general set forth in  71-5-2501  72-5-2512 relating to the investigation of fraud and abuse in the TennCare program shall also be applicable to its investigation of fraud and abuse of Access Tennessee.  
 Notwithstanding any law to the contrary, if the state determines not to apply for or accept federal funding for the purposes of this part, any provisions of this part, including any eligibility requirements regarding federally defined eligible individuals as set forth in  56-7-2908 of this part, would not be subject to nor would the state or board have to comply with any federal requirements mandated as a result of the acceptance of the federal funds.  
 This part shall be reviewed annually by the commerce and labor committee of the senate, the insurance committee of the house of representatives, the finance, ways and means committee of the senate and the finance, ways and means committee of the house of representatives, and these committees shall recommend necessary changes to the governor and the general assembly.  
 This part shall be repealed on June 30, 2025.  
 Every life insurance company shall submit to the commissioner for approval the words required in  56-7-2310, to be printed on each policy, together with sample copy of every kind or class of policies offered for sale in this state, and every life insurance company shall print on each of its policies sold to citizens of this state the words the commissioner approves.  
 The license of any insurance company doing business in this state may be revoked by the commissioner for violating  56-7-305 or  56-7-2310.  
 The policies of a life insurance company not organized under the laws of this state may, if approved by the commissioner of this state, contain any provision that the law of the state, territory, district, or country under which the company is organized prescribes shall be in the policies when issued in this state, and the policies of a life insurance company organized under the laws of this state may, when issued or delivered in any other state, territory, district, or country, contain any provision required by the laws of the state, territory, district, or country in which they are issued, anything in  56-7-309  56-7-311, 56-7-2307, 56-7-2308, and 56-7-2311 to the contrary notwithstanding.  
  This section applies only to policies of life insurance issued prior to the operative date of  56-7-401, the Standard Nonforfeiture Law.   Policies may be issued in this state providing for not more than one-year preliminary term insurance by the incorporation in the policy of a clause on the face of the policy distinctly specifying that the first year's insurance is term insurance.   If the premium charged for term insurance under a limited payment life or endowment preliminary term policy, providing for the payment of all premiums in less than twenty (20) years from the date of the policy, exceeds that charged for like insurance under twenty (20) pay life preliminary term policies of the same company at the same age, the reserve at the end of any year, including the first, shall not be less than the reserve on a twenty (20) pay life preliminary term policy issued in the same year and at the same age, together with an amount equivalent to the accumulation of a net level premium sufficient to provide for a pure endowment at the end of the premium payment period equal to the difference between the value at the end of the period for the twenty (20) pay life preliminary term policy and the full reserve at the time of the limited payment life or endowment policy.   
 Sections 56-7-308, 56-7-309, 56-7-2307 and 56-7-2308, do not apply to annuities, industrial policies, or to corporations or associations operating on the assessment or fraternal plan.  
 As used in  56-7-308, 56-7-309, 56-7-2307, 56-7-2308 and 56-7-2311, company includes corporations and associations.  
  This section applies only to policies of life insurance issued prior to the operative date of  56-7-401, the Standard Nonforfeiture Law.   In the event of default in the payment of any premium due on any policy, there shall be secured to the owner of the policy a stipulated form of insurance as may be specified in the policy, the net value of which shall be at least equal to the reserve at the date of default on the policy and on any dividend additions thereto according to the mortality table and the rate of interest for computing the reserve as specified in the policy, less a sum of not more than two and one half percent (212%) of the amount insured by the policy and of any existing dividend additions thereto and less any existing indebtedness to the company on the policy at the time of default; provided, that not less than three (3) full years' premiums shall have been paid; and provided, further, that the policy shall not be continued in force by virtue of any automatic loan provision in the policy.   There shall also be secured to the owner of the policy the right to surrender the policy to the company at its home office within one (1) month from the date of default for a specified cash value at least equal to the sum that would otherwise be available for the purchase of insurance, and the payment of which cash value by the company shall not be deferred for more than six (6) months after application for the payment is made.   
 No agreement between the company and the policyholder or applicant for insurance shall be held to waive  56-2-115, 56-7-312, 56-7-401 and 56-7-2309.  
 If an organization described in either  170(c) or  501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C.  170(c) and 501(c)(3)), respectively, purchases or receives by assignment, before or after April 23, 1992, life insurance on an insured who consents in writing to the purchase or assignment, the organization is deemed to have or to have had an insurable interest in the insured person's life on the date of purchase or assignment. This section does not limit or abridge any insurable interest on April 23, 1992, at common law or by statute.  
 An insurer of a life insurance policy or annuity issued for delivery in this state, with respect to a claim for benefits by reason of the death of the insured or annuitant, shall pay interest beginning on the fifteenth day following the date of death of the insured or annuitant, with the interest compounded annually for a period not to exceed three (3) years from that date. The rate of interest payable shall not be less than the interest currently paid by the insurer with respect to proceeds left on deposit.  
 Pharmacy benefits managers shall, and contracts for pharmacy benefits management must, comply with the requirements of this part.  
 As used in this part, unless the context otherwise requires:   Covered entity means a health insurance issuer, managed health insurance issuer as defined in  56-32-128(a), nonprofit hospital, medication service organization, insurer, health coverage plan, health maintenance organization licensed to practice pursuant to this title, a health program administered by the state or its political subdivisions, including the TennCare programs administered pursuant to the waivers approved by the United States department of health and human services, nonprofit insurance companies, prepaid plans, self-insured entities, and all other corporations, entities or persons, or an employer, labor union, or other group of persons organized in the state that provides health coverage to covered individuals who are employed or reside in the state. Covered entity does not include a health plan that provides coverage only for accidental injury, specified disease, hospital indemnity, medicare supplement, disability income, or other long-term care;   Maximum allowable cost means the maximum amount that a pharmacy benefits manager or covered entity will reimburse a pharmacy for the cost of a drug or a medical product or device;   Maximum allowable cost list means a list of drugs, medical products or devices, or both medical products and devices, for which a maximum allowable cost has been established by a pharmacy benefits manager or covered entity;   Pharmacist and pharmacy have the same meanings as those terms are defined in  63-10-204;   Pharmacy benefits manager means a person, business or other entity and any wholly or partially owned subsidiary of the entity, that administers the medication and/or device portion of pharmacy benefits coverage provided by a covered entity. Pharmacy benefits manager includes, but is not limited to, a health insurance issuer, managed health insurance issuer as defined in  56-32-128(a), nonprofit hospital, medication service organization, insurer, health coverage plan, health maintenance organization licensed to practice pursuant to this title, a health program administered by the state or its political subdivisions, including the TennCare programs administered pursuant to the waivers approved by the United States department of health and human services, nonprofit insurance companies, prepaid plans, self-insured entities, and all other corporations, entities or persons acting for a pharmacy benefits manager in a contractual or employment relationship in the performance of pharmacy benefits management for a covered entity and includes, but is not limited to, a mail order pharmacy; and   Pharmacy services administrative organization means an entity that provides contracting and other administrative services to pharmacies to assist them in their interaction with third-party payers, pharmacy benefits managers, drug wholesalers, and other entities.   
  When an audit of records of a pharmacist or pharmacy is conducted by a covered entity, a pharmacy benefits manager, the state or its political subdivisions, or any other entity representing the same, it shall be conducted in the following manner:  Written notice shall be given to the pharmacist or pharmacy at least two (2) weeks prior to conducting the initial on-site audit for each audit cycle;   Any audit performed under this section that involves clinical or professional judgment shall be conducted in consultation with a pharmacist who has knowledge of the Tennessee Pharmacy Practice Act, compiled in title 63, chapter 10, parts 2-4;   Any clerical or recordkeeping error identified during an audit, such as a typographical error, scrivener's error, omission, or computer error, does not, in and of itself, constitute fraud or intentional misrepresentation and must not be the basis of a recoupment unless the error results in an actual overpayment to the pharmacy or the wrong medication being dispensed to the patient. Notwithstanding any other law to the contrary, no such claim is subject to criminal penalties without proof of intent to commit fraud;   A pharmacist or pharmacy may use the records of a hospital, physician, or other authorized practitioner of the healing arts for drugs or medical supplies written or transmitted by any means of communication for purposes of validating pharmacy records with respect to orders or refills of a legend or narcotic drug;   A finding of overpayment or underpayment may be a projection based on the number of patients served having a similar diagnosis or on the number of similar orders or refills for similar drugs; however, recoupment of claims must be based on the actual overpayment or underpayment, unless the projection for overpayment or underpayment is part of a settlement as agreed to by the pharmacist or pharmacy;   Each pharmacist or pharmacy shall be audited under the standards and parameters as other similarly situated pharmacists or pharmacies audited by a covered entity, a pharmacy benefits manager, the state or its political subdivisions, or any other entity representing the same;   A pharmacist or pharmacy must be allowed the length of time described in the pharmacist's or pharmacy's contract or provider manual, whichever is applicable, which must not be less than thirty (30) days, following receipt of the preliminary audit report in which to produce documentation to address any discrepancy found during an audit. A pharmacist or pharmacy may correct a clerical or recordkeeping error by submitting an amended claim during the designated time frame if the prescription was dispensed according to the requirements of state and federal law. If the pharmacist's or pharmacy's contract or provider manual does not specify the allowed length of time for the pharmacist or pharmacy to address any discrepancy found in the audit following receipt of the preliminary report, then that pharmacist or pharmacy must be allowed no less than thirty (30) days following receipt of the preliminary audit report to respond and produce documentation;   The period covered by an audit may not exceed two (2) years from the date the claim was submitted to or adjudicated by a covered entity, a pharmacy benefits manager, the state or its political subdivisions, or any other entity representing the same, except this subdivision (a)(8) shall not apply where a longer period is required by any federal rule or law;   An audit shall not be initiated or scheduled during the first seven (7) calendar days of any month due to the high volume of prescriptions filled during that time, unless otherwise consented to by the pharmacist or pharmacy;   The preliminary audit report must be delivered to the pharmacist or pharmacy within one hundred twenty (120) days after conclusion of the audit. A final audit report shall be delivered to the pharmacist or pharmacy within six (6) months after receipt of the preliminary audit report or final appeal, whichever is later;   Notwithstanding any other law to the contrary, any audit of a pharmacist or pharmacy shall not use the accounting practice of extrapolation in calculating recoupments or penalties for audits; and   Any recoupment related to clerical or recordkeeping errors must not include the cost of the drug or dispensed product, except in cases of the following:  Fraud or other intentional and willful misrepresentation;   Dispensing in excess of the pharmacy benefits contract established by the plan sponsor; or   Prescriptions not filled in accordance with the prescriber's order.       Recoupments of any disputed funds shall only occur after final internal disposition of the audit, including the appeal process as set forth in subsection (c).   Each pharmacy benefits manager, as defined in  56-7-3102, conducting an audit shall establish an appeals process under which a pharmacist or pharmacy may appeal an unfavorable preliminary audit report to the pharmacy benefits manager on whose behalf the audit was conducted. The pharmacy benefits manager conducting any audit shall provide to the pharmacist or pharmacy, before or at the time of delivery of the preliminary audit report, a written explanation of the appeals process, including the name, address and telephone number of the person to whom an appeal should be addressed. If, following the appeal, it is determined that an unfavorable audit report or any portion of the audit report is unsubstantiated, the audit report or the portion shall be dismissed without the necessity of further proceedings.   A pharmacy provider may use any prescription that meets the requirements of being a legal prescription as defined by applicable Tennessee law to validate claims submitted for reimbursement for dispensing of original and refill prescriptions, or changes made to prescriptions.   Auditors are permitted to enter the prescription department when accompanied by or authorized by a member of the pharmacy staff. During the auditing process, auditors shall not disrupt the provision of services to the pharmacy's customers.   A demand for recoupment, repayment or offset against future reimbursement for an overpayment on a claim for dispensing of an original or refill prescription shall not include the dispensing fee, unless the prescription that is the subject of the claim was not actually dispensed, was not valid, was fraudulent, or was outside the contract. This subsection (f) shall not apply where a pharmacy is requested, pursuant to a contractual provision or to  56-7-2362(b) or  56-32-138(b), to correct an error in a claim submitted in good faith.   Audit information from an audit conducted by one pharmacy benefits manager shall not be shared with or utilized by another pharmacy benefits manager. This subsection (g) shall not apply to an investigative audit that is believed by the pharmacy benefits manager to involve fraud or willful misrepresentation.   Unless otherwise agreed to by contract, no audit finding or demand for recoupment, repayment or offset against future reimbursement shall be made for any claim for dispensing of an original or refill prescription for the reason of information missing from a prescription or for information not placed in a particular location on a prescription when the information or location of the information is not required or specified by federal or state law.   In the event the actual quantity dispensed on a valid prescription for a covered beneficiary exceeds the allowable maximum days supply of the product as defined in the applicable pharmacy benefit provider agreement, the amount allowed to be recouped, repaid or offset against future reimbursement shall be limited to an amount that is calculated based on the quantity of the product dispensed found to be in excess of the allowed days supply quantity and using the cost of the product as reflected on the original claim.   A pharmacy provider shall be allowed to dispense and shall be reimbursed for the full quantity of the smallest available commercially packaged product, including, but not limited to, eye drops, insulin, and topical products, which contains the total amount that is required to be dispensed to meet the days supply ordered by the prescriber, even if the full quantity of the commercially prepared package exceeds the maximum days supply allowed.   The highest daily total dose which may be utilized by the patient pursuant to the prescriber's directions shall be used to make a determination of the days supply. For prescriptions having a titrated dose schedule, the schedule shall be used to determine the days supply.   Subsections (d)-(k) shall not apply to any investigative audit that involves allegations of fraud or willful misrepresentation.   
  Reimbursement by a pharmacy benefits manager under a contract to a pharmacist or pharmacy for prescription drugs and other products and supplies that is calculated according to a formula that uses a nationally recognized reference in the pricing calculation shall use the most current nationally recognized reference price or amount in the actual or constructive possession of the pharmacy benefits manager or its agent.   For purposes of compliance with this section, pharmacy benefits managers shall be required to update the nationally recognized reference prices or amounts used for calculation of reimbursement for prescription drugs and other products and supplies no less than every three (3) business days.   
 No contract entered into or amended on or after July 1, 2007, shall contain provisions in violation of this part.  
  Before a pharmacy benefits manager or covered entity may place a drug on a maximum allowable cost list, the pharmacy benefits manager or covered entity must find that the drug is generally available for purchase by pharmacies in this state from a national or regional wholesaler.   If a drug that has been placed on a maximum allowable cost list no longer meets the requirements of subsection (a), the drug shall be removed from the maximum allowable cost list by the pharmacy benefits manager or covered entity within five (5) business days after the date that the pharmacy benefits manager or covered entity becomes aware that the drug no longer meets the requirements of subsection (a).   Nothing in this part shall be construed as preventing a pharmacy benefits manager or covered entity from reimbursing claims for a generic drug at the previously determined maximum allowable cost even if the pharmacy benefits manager or covered entity reimburses for the equivalent brand name drug at the contracted brand rate after confirmation by a national or regional wholesaler and by the manufacturer that the generic drug is generally unavailable for purchase from a national or regional wholesaler.   
  A pharmacy benefits manager or covered entity shall make available to each pharmacy with which the pharmacy benefits manager or covered entity has a contract and to each pharmacy included in a network of pharmacies served by a pharmacy services administrative organization with which the pharmacy benefits manager or covered entity has a contract, at the beginning of the term of a contract and upon renewal of a contract:  The sources used to determine the maximum allowable costs for the drugs and medical products and devices on each maximum allowable cost list;   Every maximum allowable cost for individual drugs used by that pharmacy benefits manager or covered entity for patients served by that contracted pharmacy; and   Upon request, every maximum allowable cost list used by that pharmacy benefits manager or covered entity for patients served by that contracted pharmacy.     A pharmacy benefits manager or covered entity shall:  Update each maximum allowable cost list at least every three (3) business days, as required by  56-7-3104(b);   Make the updated lists available to every pharmacy with which the pharmacy benefits manager or covered entity has a contract and to every pharmacy included in a network of pharmacies served by a pharmacy services administrative organization with which the pharmacy benefits manager or covered entity has a contract, in a readily accessible, secure and usable web-based format or other comparable format or process; and   Utilize the updated maximum allowable costs to calculate the payments made to the contracted pharmacies within five (5) business days.     
  A pharmacy benefits manager or covered entity shall establish a clearly defined process through which a pharmacy may contest the listed maximum allowable cost for a particular drug or medical product or device. If a pharmacy chooses to contest the listed maximum allowable cost for a particular drug or medical product or device, the pharmacy shall have the right to designate a pharmacy services administrative organization or other agent to file and handle its appeal of the maximum allowable cost of the drug or medical product or device.   A pharmacy may base its appeal on one (1) or more of the following:  The maximum allowable cost established for a particular drug or medical product or device is below the cost at which the drug or medical product or device is generally available for purchase by pharmacies in this state from national or regional wholesalers; or   The pharmacy benefits manager or covered entity has placed a drug on the list without properly determining that the requirements of  56-7-3106 have been met.     The pharmacy must file its appeal within seven (7) business days of its submission of the initial claim for reimbursement for the drug or medical product or device. The pharmacy benefits manager or covered entity must make a final determination resolving the pharmacy's appeal within seven (7) business days of the pharmacy benefits manager or covered entity's receipt of the appeal.   If the final determination is a denial of the pharmacy's appeal, the pharmacy benefits manager or covered entity must state the reason for the denial and provide the national drug code of an equivalent drug that is generally available for purchase by pharmacies in this state from national or regional wholesalers at a price which is equal to or less than the maximum allowable cost for that drug.    If a pharmacy's appeal is determined to be valid by the pharmacy benefits manager or covered entity, the pharmacy benefits manager or covered entity shall adjust the maximum allowable cost of the drug or medical product or device for the appealing pharmacy. The adjustment for the appealing pharmacy shall be effective from the date the pharmacy's appeal was filed, and the pharmacy benefits manager or covered entity shall provide reimbursement to the appealing pharmacy and may require the appealing pharmacy to reverse and rebill the claim in question in order to receive the corrected reimbursement.   Once an appealing pharmacy's appeal is determined to be valid by the pharmacy benefits manager or covered entity, the pharmacy benefits manager or covered entity shall adjust the maximum allowable cost of the drug or medical product or device to which the maximum allowable cost applies for all similar pharmacies in the network as determined by the pharmacy benefits manager within three (3) business days for claims submitted in the next payment cycle.     A pharmacy benefits manager or covered entity shall make available on its secure web site information about the appeals process, including, but not limited to, a telephone number or process that a pharmacy may use to submit maximum allowable cost appeals.   
 The medical products and devices subject to the requirements of this part are limited to the medical products and devices included as a pharmacy benefit under the pharmacy benefits contract.  
 A violation of this part may subject the pharmacy benefits manager or covered entity to any of the sanctions described in  56-2-305.  
 A pharmacy shall not disclose to any third party the maximum allowable cost lists and any related information it receives from a pharmacy benefits manager or covered entity; provided, however, a pharmacy may share such lists and related information with a pharmacy services administrative organization or similar entity with which the pharmacy has a contract to provide administrative services for that pharmacy. If a pharmacy shares this information with a pharmacy services administrative organization or similar entity, that organization or entity shall not disclose the information to any third party.  
  This section shall be known and may be cited as the Fair Disclosure of State Funded Payments for Pharmacists' Services Act.   As used in this section:  Pharmacist means a pharmacist as defined in  63-10-204;   Pharmacist services means products, goods, or services provided as a part of the practice of pharmacy as defined in  63-10-204 to individuals who reside or are employed in this state;   Pharmacy means the same as defined in  63-10-204;   Pharmacy benefits manager or PBM means an entity that administers or manages a pharmacy benefits plan or program; and   Pharmacy benefits plan or program means any plan or program that is funded by state dollars to furnish, cover the cost of, or otherwise provide for pharmacist services to individuals who reside or are employed in this state.     A PBM, when seeking payment or reimbursement for pharmacist services provided in connection with a pharmacy benefits plan or program or reporting expenditures for pharmacist services provided in connection with a pharmacy benefits plan or program, shall itemize by individual claim:  The amount actually paid or to be paid to the pharmacy or pharmacist for the pharmacist services;   The identity of the pharmacy or pharmacist actually paid or to be paid; and   The prescription number or other identifier of the pharmacist services.     A PBM shall pay the amounts it receives for pharmacist services provided in connection with a pharmacy benefits plan or program to the pharmacies or pharmacists that provided the pharmacist services.   This section does not:  Require a PBM to set specific fees, rates, or schedules for payment for pharmacist services;   Prohibit a PBM from charging for any services in addition to pharmacist services; or   Require a PBM to pay a pharmacy or pharmacist more on any claim than the amount disclosed under subdivision (c)(1).     A violation of this section is an unfair trade practice under the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title.   All documents containing individual claim and payment information specified in subsections (c) and (d) shall be confidential records and not subject to the requirements of title 10, chapter 7, relating to public inspection of records.   A state agency administering a PBM contract may provide the information described in subsections (c) and (d) to a qualified independent auditor in accordance with  4-3-1021; provided, the information is relevant to an audit authorized under  4-3-1021, and the independent auditor has agreed to maintain the confidentiality of the information.   
  No person or entity shall administer the medication or device portion of pharmacy benefits coverage provided by a covered entity or otherwise act as a pharmacy benefits manager in this state unless the person or entity has obtained licensure through the department of commerce and insurance.   To obtain licensure as a pharmacy benefits manager, the person or entity must demonstrate to the department that the person or entity:  Is authorized to transact business in this state;   Is financially responsible, as determined by the department; and   Has not had a prior license to be a pharmacy benefits manager denied for cause or revoked by the department within five (5) years of the date on which licensure is sought.      In addition to the showing required by subsection (b), a person or entity seeking licensure as a pharmacy benefits manager shall also provide the following information to the department:  The person or entity's name, address, telephone number, email address, and website address; and   If the licensure is sought for an entity, the name, address, telephone number, and email address for a contact person.     Any material changes in the information described in this subsection (c) shall be filed with the department within sixty (60) days of the change.     A person or entity's license as a pharmacy benefits manager shall be renewed biennially.    Any person or entity seeking licensure as a pharmacy benefits manager shall pay a fee in the amount of one hundred dollars ($100) to the department to obtain the license. Any person or entity seeking renewal of a license as a pharmacy benefits manager shall pay a fee in the amount of fifty dollars ($50) to renew the license.   All fees paid pursuant to this section shall be used by the department for purposes of administering this section.      Failure to obtain licensure or renew a license pursuant to this section while acting as a pharmacy benefits manager in this state shall constitute a violation of this section and shall be punishable by a fine of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).   Any person or entity assessed a fine pursuant to this section or denied a license or renewal of a license may appeal the fine or denial pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.     
 A pharmacy or pharmacist has the right to provide an insured information regarding the amount of the insured's cost share for a prescription drug. Neither a pharmacy nor a pharmacist shall be penalized by a pharmacy benefits manager for discussing any information described in this section or for selling a lower priced drug to the insured if one is available.  
 A covered entity or pharmacy benefits manager shall not charge a pharmacist or a pharmacy a fee related to a claim unless it is apparent at the time of claim processing and is reported on the remittance advice of an adjudicated claim. This section does not prohibit a covered entity or pharmacy benefits manager from entering into an agreement with a pharmacy or pharmacist which includes prospective performance-based incentives and increases payment to pharmacies or pharmacists.  
 A covered entity or pharmacy benefits manager shall not include any term or condition in a contract with a pharmacy or pharmacist that requires a pharmacist to dispense a drug or other product to a patient contrary to a pharmacist's professional judgment.  
 A covered entity or pharmacy benefits manager shall disclose to a pharmacy or pharmacist in its network, at least thirty (30) days before the date the change becomes effective, any material change to a contract provision that affects the terms of reimbursement, the process for verifying benefits and eligibility, the dispute resolution procedure, the procedure for verifying drugs included in the formulary, and the procedure for contract termination. Nothing in this section prohibits a covered entity or pharmacy benefits manager from taking action without notice against a pharmacy or pharmacist in its network for a fraudulent claim or service.  
  Each contract between a covered entity or pharmacy benefits manager and a pharmacist or pharmacy must be mutually agreed upon and must outline the terms and conditions for the provision of pharmacy services.   A covered entity or pharmacy benefits manager shall not cause or knowingly permit the use of any advertisement, promotion, solicitation, representation, proposal, or offer that is untrue, deceptive, or misleading.   Removal of a pharmacy or a pharmacist from the network of a covered entity or pharmacy benefits manager does not release the covered entity or pharmacy benefits manager from the obligation to make any payment due to the pharmacy or pharmacist for services that have been properly rendered prior to the pharmacy being removed from the network. Properly rendered services do not include any services related to a fraudulent claim or intentional misrepresentation.   A covered entity or pharmacy benefits manager shall not engage in a pattern or practice of reimbursing pharmacies or pharmacists in this state less than the amount that the pharmacy benefits manager reimburses a pharmacy benefits manager affiliate for providing the same drug or dispensed product or service.   
 As used in this part, unless the context otherwise requires:   Actual reimbursement means the total amount that a covered entity or pharmacy benefits manager determines that a pharmacy or other dispenser will receive consistent with the provider agreement, and is the sum of the amount the covered entity or pharmacy benefits manager will pay directly to the pharmacy or other dispenser plus any applicable patient out-of-pocket cost paid directly by the patient to the pharmacy or other dispenser, for dispensing of a particular prescription or providing a covered service;   Covered entity means a covered entity as defined in  56-7-3102; and   Pharmacy benefits manager means a pharmacy benefits manager as defined in  56-7-3102.   
  When a patient's out-of-pocket cost for a prescription or covered service is percentage-based, the covered entity or pharmacy benefits manager shall calculate the out-of-pocket cost such that when the out-of-pocket cost is added to the amount that the covered entity or pharmacy benefits manager will directly pay to the pharmacy or other dispenser the sum will equal the actual reimbursement.   The requirements of subsection (a) shall not apply when patient out-of-pocket cost for a prescription or covered service is percentage-based for only a specified portion or predefined subset of drug tiers or specialty drug categories and the remainder of the covered drug prescriptions or services available to the patient are associated with predefined and specific out-of-pocket costs.   
 A covered entity or pharmacy benefits manager shall not in any way restrict, by contract or otherwise, any pharmacy or other dispenser from disclosing to the patient or authorized representative of the patient the actual reimbursement for a particular prescription or covered service. A pharmacy or other dispenser may disclose the actual reimbursement either orally or in writing on any document, including, but not limited to, a receipt, patient profile and summary of the patient's expenditures for prescriptions or covered services.  
 The requirements of this part shall only be construed to apply to policies, contracts and certificates executed, delivered, issued for delivery or renewed in this state on or after January 1, 2010.  
 As used in this part, unless the context otherwise requires:   Health care provider or provider means any person or entity performing services regulated pursuant to title 63 or title 68, chapter 11, with whom the health insurance entity has an express and valid network provider agreement or contract;   Health insurance entity has the same meaning as in  56-7-109; and   Reasonably accurate means information determined through application by the health insurance entity of contract rates, fee schedules and reimbursement rules and policies in effect as of the date inquiry is made by the provider.   
   A health insurance entity shall provide notice to a healthcare provider of any material change made in the sole discretion of the insurance entity to the entity's previously released provider manual or a reimbursement rule and policy at least sixty (60) days prior to the effective date of the change, and the health insurance entity shall ensure that any such material change is clearly identified in the following manner:  Disclosing or identifying the change in the provider manual through the use of bold print or a font, or both, with the bold print or font being the same or larger size as the font generally used throughout the policy or manual; and   Disclosing or identifying the change in the reimbursement rules and policies and the effective date of the change through the use of a separately categorized communication to the provider.     Any disclosures required under this subsection (a) may be distributed by either:  An internet web-accessible section associated with a web-accessible current version of the provider manual or reimbursement rules and policies; or   Written communication sent to a dedicated email address or as stipulated in the contract between the provider and the health insurance entity. The provider shall submit to the health insurance entity a dedicated email address to receive the disclosures required by this subsection (a).       Notwithstanding any law to the contrary, nothing in this part shall apply to the TennCare program or any successor Medicaid program provided for in title 71, chapter 5; the CoverKids Act of 2006, compiled in title 71, chapter 3, part 11; the Access Tennessee Act of 2006, compiled in part 29 of this chapter; any other plan managed by the health care finance administration division of the department of finance and administration or any successor division or department; or the group insurance plans offered under title 8, chapter 27; or a contract between a healthcare provider and the state or federal government or their agencies for health services provided through Medicare.   
  By July 1, 2010, a health insurance entity shall establish and maintain an Internet web site, which shall be accessible to health care providers with whom the health insurance entity has an express and a valid network provider agreement or contract.    Excluding inpatient claims, every health insurance entity shall make available on the Internet web site established pursuant to subsection (a) a web-based preadjudication tool to be used by a health care provider prior to the provider's submitting either a clean claim as defined in  56-7-109 or a claim combination to the claims adjudication system utilized by the health insurance entity. The preadjudication tool shall be designed in such a manner as to be capable of:  Providing reasonably accurate information to a health care provider regarding the manner in which the health insurance entity's claim system will adjudicate claims for specific billing codes or combinations of codes; and   Providing reasonably accurate information to a health care provider regarding the allowed amount for those claims submitted pursuant to this subdivision (b)(1) based on the health care provider's fee schedule and contract with the health insurance entity for which the claim will be submitted if the claim is determined to be a clean claim.     Nothing in this subsection (b) shall be construed as requiring the preadjudication tool to reflect the effects of coverage terms and conditions unrelated to application of contract rates, fee schedules and reimbursement rules and policies, including, without limitation, eligibility for coverage, deductibles and copayments, coordination of benefits and coverage limitations and exclusions; and nothing in this subsection (b) shall be construed as requiring the preadjudication tool to respond to a provider when the data submitted by the provider is insufficient to provide the information required by subdivisions (b)(1)(A) and (B).     Health insurance entity policies affecting the information available to a provider pursuant to subsection (b) shall be easily accessible by a health care provider on the web site established by the health insurance entity pursuant to subsection (a).   
 This part shall not apply to a contract between a health care provider and the state or federal government or their agencies for health care services provided through a program for medicare; the state group insurance program; TennCare or any successor program provided for in title 71, chapter 5; the CoverKids Act of 2006 provided for in title 71, chapter 3, part 11; the Cover Tennessee Act of 2006 provided for in chapter 7, part 30 of this title [repealed]; or the Access Tennessee Act of 2006 provided for in chapter 7, part 29 of this title.  
 This part shall be known as the Unclaimed Life Insurance Benefits Act.  
 Nothing in this part shall supersede the Uniform Unclaimed Property Act, compiled in title 66, chapter 29, part 1.  
 As used in this part:   Account owner means the owner of a retained asset account who is a resident of this state;   Annuity means any active annuity contract issued in this state other than an annuity used to fund an employment-based retirement plan or program where the insurer is not committed by terms of the annuity contract to pay death benefits to the beneficiaries of specific plan participants or that is used to fund a pre-need funeral contract as defined in  62-5-403;   Asymmetric conduct means an insurer's use of the DMF prior to July 1, 2015, in connection with searching for information regarding whether annuitants under the insurer's annuities might be deceased, but not in connection with whether the insureds under its policies might be deceased;   Beneficiary means an individual or other entity entitled to benefits under a policy or annuity;   Death master file or DMF means the death master file from the United States social security administration or any other database or service that an insurer may determine is substantially as inclusive as the death master file for determining that a person has reportedly died;   Death master file match or DMF match means a search of a DMF that results in a match of a person's social security number or name and date of birth;   Insurer means any insurance company authorized to transact life insurance business in this state;   Person means the policy insured, annuity owner, annuitant, or account owner, as applicable under the policy, annuity, or retained asset account subject to this part;   Policy means any policy or certificate of life insurance issued in this state, but does not include any policy or certificate of life insurance that provides a death benefit under:  An employee benefit plan subject to the Employee Retirement Income Security Act of 1974, as periodically amended, compiled at 29 U.S.C.  1002 et seq.;   Any federal employee benefit program;   Government plans or church plans as defined in the Employee Retirement Income Security Act of 1974, as periodically amended, compiled at 29 U.S.C.  1002 et seq.;   A policy or certificate of life insurance that is used to fund a pre-need funeral contract as defined in  62-5-403; or   A policy or certificate of credit life or accident and health insurance;     Record keeping services means those circumstances under which the insurer has agreed with a group life insurance policyholder to be responsible for obtaining, maintaining, and administering in its own systems information about each individual insured under the policyholder's group life insurance contract at least the following information:  Individual insured's social security number or name and date of birth;   Beneficiary designation information;   Coverage eligibility;   Benefit amount; and   Premium payment status.     
   To the extent that an insurer's records of its in-force policies, annuities, and account owners are available electronically, an insurer shall perform a comparison of such in-force policies, annuities, and account owners against a death master file, on a semi-annual basis, to identify potential death master file matches. To the extent that an insurer's records of its in-force policies, annuities, and account owners are not available electronically, an insurer shall perform a comparison of such in-force policies, annuities, and account owners against a death master file, on a semi-annual basis, to identify potential death master file matches, using the records most easily accessible by the insurer.   This section shall not apply to policies or annuities for which the insurer has received premiums from outside the policy value, by check, bank draft, payroll deduction, or any other similar method of active premium payment, within the eighteen (18) months immediately preceding the death master file comparison.   An insurer may comply with the requirements of this section by using the full death master file once and thereafter using the death master file update files for future comparisons.   An insurer that has not engaged in asymmetric conduct prior to July 1, 2015, shall not be required to comply with the requirements of this section with respect to any policies, annuities or retained asset accounts issued or delivered prior to July 1, 2015; provided, however, that an insurer, regardless of whether it has engaged in asymmetric conduct, shall comply with the requirements of this section for all policies, annuities, or retained asset accounts issued after July 1, 2015.   The comparison required by this section shall not be applicable to group life insurance policies for which the insurer does not perform record keeping services.     If an insurer learns of the possible death of a person, through a DMF match or otherwise, then the insurer shall within ninety (90) days complete a good faith effort, which shall be documented by the insurer, to:  Confirm the death of such person against other available records and information;   Review its records to determine whether such deceased person had purchased any other products with the insurer;   Determine whether benefits may be due in accordance with any applicable policy, annuity, or retained asset account;   Locate the beneficiary or beneficiaries; and   Provide the appropriate claims forms or instructions to the beneficiary to make a claim, and notify the beneficiary of the actions necessary to submit a valid claim.     Except as prohibited by law, an insurer may disclose only the minimum necessary identifying personal information about such an insured, annuitant, account owner or beneficiary to a person who the insurer reasonably believes may be able to assist the insurer in locating the beneficiary or a person otherwise entitled to payment of the claims proceeds.   In the event an insurer is unable to confirm the death of a person following a DMF match, an insurer may determine that no further good faith efforts, as described in subsection (b), are required of it with respect to such policy, annuity or retained asset account.   An insurer or its service provider shall not charge any beneficiary or other person who may be entitled to benefits any fees or costs associated with a DMF search or the verification of a DMF match conducted pursuant to this section.   The benefits from life insurance policies, annuities or retained asset accounts, plus any applicable accrued contractual interest, shall first be payable to the beneficiaries or account owners as provided for in such policies, annuities or retained asset accounts, and in the event said beneficiaries or account owners cannot be found, shall escheat to the state as unclaimed property under title 66, chapter 29, part 1.   The commissioner may exempt an insurer from the DMF comparisons required under subsection (a) if the insurer demonstrates to the commissioner's satisfaction that compliance would result in hardship to the insurer.   Nothing in this section limits an insurer from requiring a valid death certificate as part of any claims validation process or otherwise requiring compliance with the terms and conditions of the policy or annuity relative to filing and payment of claims.   
 A pattern of failures to meet the requirements of this part may constitute an unfair claims settlement practice under the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8 of this title. Nothing in this part shall be construed to create or imply a private cause of action for a violation of this part.  
  An insurer is authorized in its discretion, but is not required, to report and remit the proceeds of an unclaimed policy, annuity, or retained asset account to the appropriate state when the insurer, through good faith efforts as evidenced by appropriate documentation, has:  Identified a person as deceased through a DMF match through a search described in  56-7-3404, or other information source;   Validated such information through a secondary information source;   Conducted reasonable search efforts for the beneficiary within ninety (90) days after the insurer's validation of the DMF match; and   Determined that no beneficiary can be located within one (1) year of the conclusion of search efforts described in subdivision (a)(3).     By remitting the proceeds of an unclaimed policy, annuity or retained asset account to the state pursuant to this section or pursuant to title 66, chapter 29, part 1, an insurer shall be relieved from all liability to any person relating to such proceeds. This relief from liability shall be in addition to any other protections provided by law.   An insurer shall pay unclaimed proceeds of a policy, annuity, or retained asset account not later than the last day of the period prescribed for such payment under title 66, chapter 29, part 1; provided, that an insurer may pay the unclaimed proceeds of a policy, annuity, or retained asset account prior to the end of such period.   
  In the case of policies issued on and after the operative date of this section, as defined in subsection (n), no policy of life insurance, except as stated in subdivision (a)(1), shall be delivered or issued for delivery in this state, unless it contains in substance the following provisions, or corresponding provisions, which, in the opinion of the commissioner, are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this subsection (a), and are essentially in compliance with subsection (k):  That, in the event of default in any premium payment, the company will grant, upon proper request not later than sixty (60) paid-up days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, of the amount that may be specified in this section. In lieu of the stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than sixty (60) days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit that provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits;   That, upon surrender of the policy within sixty (60) days after the due date of any premium payment in default after premiums have been paid for at least three (3) full years, the company will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of the amount that may be specified in this section;   That a stipulated paid-up nonforfeiture benefit shall become effective as specified in the policy, unless the person entitled to make the election elects another available option not later than sixty (60) days after the due date of the premium in default;   That, if the policy becomes paid-up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit that became effective on or after the third policy anniversary, the company will pay, upon surrender of the policy within thirty (30) days after any policy anniversary, a cash surrender value of the amount that may be specified in this section;   In the case of policies that cause, on a basis guaranteed in the policy, unscheduled changes in benefits or premiums, or that provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate, and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. In the case of all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first twenty (20) policy years or during the term of the policy, whichever is shorter, the values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions created to the policy and that there is no indebtedness to the company on the policy; and   A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the company on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated in the policy, a statement that the method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which the values and benefits are consecutively shown in the policy.     Any of subsection (a) or portions of subsection (a) that are not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The company shall reserve the right to defer the payment of any cash surrender value for a period of six (6) months after demand for the payment with surrender of the policy.    Subject to subdivisions (c)(2) and (3), any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required in subsection (a), shall be an amount not less than the excess, if any, of the present value, on the anniversary of the future guaranteed benefits that would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of:  The then present value of the adjusted premiums as defined in subsections (e)-(h), corresponding to premiums that would have fallen due on and after the anniversary; and   The amount of any indebtedness to the company on the policy.     For any policy issued on or after the operative date of subsection (h), as defined in subsection (h), that provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value, referred to in subdivision (c)(1) shall be an amount not less than the sum of the cash surrender value, as defined in subdivision (c)(1), for an otherwise similar policy issued at the same age without the rider or supplemental policy provision and the cash surrender value, as defined in subdivision (c)(1), for a policy that provides only the benefits otherwise provided by the rider or supplemental policy provision.   For any family policy issued on or after the operative date of subsection (h) as defined in subsection (h), that defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouse's age seventy-one (71), the cash surrender value referred to in subdivision (c)(1) shall be an amount not less than the sum of the cash surrender value, as defined in subdivision (c)(1), for an otherwise similar policy issued at the same age without the term insurance on the life of the spouse and the cash surrender value, as defined in subdivision (c)(1), for a policy that provides only the benefits otherwise provided by the term insurance on the life of the spouse.   Any cash surrender value available within thirty (30) days after any policy anniversary under any policy paid-up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by subsection (a), shall be an amount not less than the present value, on the anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the company on the policy.     Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of the anniversary shall be at least equal to the cash surrender value then provided for by the policy, or if none is provided for, that cash surrender value that would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specified period.    This subsection (e) does not apply to policies issued on or after the operative date of subsection (h) as defined in subsection (h). Except as provided in subdivision (e)(3), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding any extra premiums charged because of impairments or special hazards, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:  The then present value of the future guaranteed benefits provided for by the policy;   Two percent (2%) of the amount of insurance, if the insurance is uniform in amount, or of the equivalent uniform amount, if the amount of insurance varies with duration of the policy;   Forty percent (40%) of the adjusted premium, for the first policy year; and   Twenty-five percent (25%) of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less;  provided, that in applying the percentages specified in subdivisions (e)(1)(C) and (D), no adjusted premium shall be deemed to exceed four percent (4%) of the amount of insurance or level amount equivalent thereto. The date of issue of a policy for the purpose of this subsection (e) shall be the date as of which the rated age of the insured is determined.      In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of this subsection (e) shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy; provided, that in the case of a policy providing a varying amount of insurance issued on the life of a child under ten (10) years of age, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of ten (10) years of age were the amount provided by the policy at ten (10) years of age, or at expiry, if earlier.   The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provisions shall be equal to:  The adjusted premiums for an otherwise similar policy issued at the same age without the term insurance benefits;   Increased during the period for which premiums for the term insurance benefits are payable, by the adjusted premiums for the term insurance.  Subdivisions (e)(3)(A) and (B) being calculated separately and as specified in subdivisions (e)(1) and (2), except that, for the purposes of subdivisions (e)(1)(B), (C) and (D), the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in subdivision (e)(3)(B) shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in subdivision (e)(3)(A).      Except as otherwise provided in subsections (f) and (g), all adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table; provided, that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than three (3) years younger than the actual age of the insured, and the calculations for all policies of industrial insurance shall be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest, not exceeding three and one half percent (3.5%) per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. However, in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred thirty percent (130%) of the rates of mortality according to the applicable table. Further, for insurance issued on a substandard basis, the calculation of the adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.      This subsection (f) does not apply to ordinary policies issued on or after the operative date of subsection (h) as defined in subsection (h). In the case of ordinary policies issued on or after the operative date of this subsection (f) as defined in this subsection (f), all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table, and the rate of interest specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; provided, that the rate of interest shall not exceed three and one half percent (3.5%) per annum, except that a rate of interest not exceeding four percent (4%) per annum may be used for policies issued on or after May 6, 1973, and prior to March 27, 1978, and a rate of interest not exceeding five and one half percent (5.5%) per annum may be used for policies issued on or after March 27, 1978; and provided, further, that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than six (6) years younger than the actual age of the insured. However, in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1958 Extended Term Insurance Table. For insurance issued on a substandard basis, the calculation of the adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.   After February 3, 1961, any company may file with the commissioner a written notice of its election to comply with this subsection (f) after a specified date before January 1, 1966. After the filing of the notice, then upon the specified date, which shall be the operative date of this subsection (f) for the company, this subsection (f) shall become operative with respect to the ordinary policies thereafter issued by the company. If a company makes no election, the operative date of this subsection (f) for the company shall be January 1, 1966.      This subsection (g) does not apply to industrial policies issued on or after the operative date of subsection (h) as defined in subsection (h). In the case of industrial policies issued on or after the operative date of this subsection (g), as defined in this subsection (g), all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table and the rate of insurance specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; provided, that the rate of interest shall not exceed three and one half percent (3.5%) per annum, except that a rate of interest not exceeding four percent (4%) per annum may be used for policies issued on or after May 6, 1973, and prior to March 27, 1978, and a rate of interest not exceeding five and one half percent (5.5%) per annum may be used for policies issued on or after March 27, 1978; provided, that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1961 Industrial Extended Term Insurance Table; and provided, further, that for insurance issued on a substandard basis, the calculations of the adjusted premiums and present values may be based on such other table of mortality as may be specified by the company and approved by the commissioner.   After March 27, 1978, any company may file with the commissioner a written notice of its election to comply with this subsection (g) after a specified date before January 1, 1968. After the filing of the notice, then upon the specified date, which shall be the operative date of this subsection (g) for the company, this subsection (g) shall become operative with respect to the industrial policies thereafter issued by the company. If a company makes no  election, the operative date of this section for the company shall be January 1, 1968.      This subsection (h) applies to all policies issued on or after the operative date of this subsection (h) as defined in this subsection (h). Except as provided in subdivision (h)(7), the adjusted premiums for any policy shall be calculated on an annual basis and shall be the uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums shall be equal to the sum of:  The then present value of the future guaranteed benefits provided for by the policy;   One percent (1%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and   One hundred twenty-five percent (125%) of the nonforfeiture net level premium;  provided, that in applying the percentage specified in subdivision (h)(1)(C), no nonforfeiture net level premium shall be deemed to exceed four percent (4%) of either the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years. The date of issue of a policy for the purpose of this subsection (h) is the date as of which the rated age of the insured is determined.      The nonforfeiture net level premium shall be equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one (1) per annum payable on the date of issue of the policy and on each anniversary of the policy on which a premium falls due.   In the case of policies that cause, on a basis guaranteed in the policy, unscheduled changes in benefits or premiums, or that provide an option for changes in benefits or premiums other than a change to a new policy, the adjusted premiums and present values shall initially be calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of the change in the benefits or premiums, the future adjusted premiums, nonforfeiture net level premiums and present values shall be recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change.   Except as otherwise provided in subdivision (h)(7), the recalculated future adjusted premiums for the policy shall be the uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all the future adjusted premiums shall be equal to the excess of:  The sum of:       The then present value of the then future guaranteed benefits provided for by the policy; and  The commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by subsections (a)-(h);   The commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and   The cash surrender values and paid-up nonforfeiture benefits provided by the plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for Life Insurance, as determined by regulations promulgated by the commissioner.     Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (c)-(h) may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the amounts used to provide the additions. Notwithstanding subsection (c), additional benefits payable in the circumstances in subdivisions (j)(1)-(6) shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section, and no additional benefits shall be required to be included in any paid-up nonforfeiture benefits:  In the event of death or dismemberment by accident or accidental means;   In the event of total and permanent disability;   As reversionary annuity or deferred reversionary annuity benefits;   As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply;   As term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child, if the term insurance expires before the child is twenty-six (26) years of age, is uniform in amount after the child is one (1) year of age, and has not become paid-up by reason of the death of a parent of the child; and   As other policy benefits additional to life insurance and endowment benefits, and premiums for all the additional benefits.      This subsection (k), in addition to all other applicable subsections, applies to all policies issued on or after January 1, 1986. Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary shall be in an amount that does not differ by more than two tenths of one percent (0.2%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years, from the sum of:  The greater of zero (0) and the basic cash value specified in subdivision (k)(2); and   The present value of any existing paid-up additions less the amount of any indebtedness to the company under the policy.     The basic cash value shall be equal to the present value, on the anniversary, of the future guaranteed benefits that would have been provided for by the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the company, if there had been no default, less the then present value of the nonforfeiture factors, corresponding to premiums that would have fallen due on and after the anniversary; provided, that the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in subsection (c) or (e), whichever is applicable, shall be the same as are the effects specified in subsection (c) or (e), whichever is applicable on the cash surrender values defined in that subsection.   The nonforfeiture factor for each policy year shall be an amount equal to a percentage of the adjusted premium for the policy year, as defined in subsection (e) or (h), whichever is applicable. Except as is required by the next succeeding sentence of this subdivision (k)(3), such percentage:  Must be the same percentage for each policy year between the second policy anniversary and the later of:   The fifth policy anniversary; and   The first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two tenths of one percent (0.2%) of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten (10) policy years; and     Must be such that no percentage after the later of the two (2) policy anniversaries specified in subdivision (k)(3)(A) may apply to fewer than five (5) consecutive policy years;  provided, that no basic cash value may be less than the value that would be obtained if the adjusted premiums for the policy, as defined in subsection (e) or (h), whichever is applicable, were substituted for the nonforfeiture factors in the calculation of the basic cash value.      All adjusted premiums and present values referred to in this section shall for a particular policy be calculated on the same mortality and interest bases as are used in demonstrating the policy's compliance with the other subsections of this section. The cash surrender values referred to in this section include any endowment benefits provided for by the policy.   Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment shall be determined in manners consistent with the manners specified for determining the analogous minimum amounts in subsections (a)-(d), (h) and (j). The amounts of any cash surrender values and of any paid-up nonforfeiture benefits granted in connection with additional benefits, such as those listed as subdivisions (j)(1)-(6), shall conform with the principles of this subsection (k).      This section does not apply to any of the following:  Reinsurance;   Group insurance;   Pure endowment;   Annuity or reversionary annuity contract;   Any term policy of uniform amount that provides no guaranteed nonforfeiture or endowment benefits, or renewal of the policy, of twenty (20) years or less expiring before the insured is seventy-one (71) years of age, for which uniform premiums are payable during the entire term of the policy;   Any term policy of decreasing amount that provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in subsections (e), (f), (g) and (h), is less than the adjusted premium so calculated, on a term policy of uniform amount, renewal of the policy, that provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of twenty (20) years or less expiring before the insured is seventy-one (71) years of age, for which uniform premiums are payable during the entire term for the policy;   Any policy that provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in subsections (c), (d), (e), (f), (g) and (h), exceeds two and one half percent (2.5%) of the amount of insurance at the beginning of the same policy year; or   Any policy that is delivered outside this state through an agent or other representative of the company issuing the policy.     For purposes of determining the applicability of this section, the age at expiry for a joint term life insurance policy shall be the age at expiry of the oldest life.     Nothing in this section shall be held to prohibit a company from continuing a policy in force by virtue of an automatic loan provision in the policy.   Except as provided in subsections (f) and (g), any company may file with the commissioner a written notice of its election to comply with this section after a certain date, which shall be specified in the notice. After the filing of the notice, then upon the specified date, which shall be the operative date for the company, this section shall become operative with respect to the policies thereafter issued by the company. If a company has not made such an election, the operative date of this section for the company shall be January 1, 1962.   Operative date of the valuation manual means the January 1 of the first calendar year that the valuation manual is effective as defined in  56-1-914.    The additional expense allowance, if any; over   The then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under the policy.   The additional expense allowance, at the time of the change to the newly defined benefits or premiums, shall be the sum of:   One percent (1%) of the excess, if positive, of the average amount of insurance at the beginning of each of the first ten (10) policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first ten (10) policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and   One hundred twenty-five percent (125%) of the increase, if positive, in the nonforfeiture net level premium.   The recalculated nonforfeiture net level premium shall be equal to the result obtained by dividing A by B, where A equals the sum of the nonforfeiture net level premium applicable prior to the change times the present value of an annuity of one (1) per annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred; and the present value of the increase in future guaranteed benefits provided for by the policy; and B equals the present value of an annuity of one (1) per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due.   Notwithstanding any other provisions of this subsection (h) to the contrary, in the case of a policy issued on a substandard basis that provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis that provides higher uniform amounts of insurance, adjusted premiums and present values for the substandard policy may be calculated as if it were issued to provide the higher uniform amounts of insurance on the standard basis.   (A)  Subject to subdivision (h)(8)(B), all adjusted premiums and present values referred to in this section shall:   For all policies of ordinary insurance be calculated on the basis of:   The Commissioners 1980 Standard Ordinary Mortality Table; or   At the election of the company for any one (1) or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors;   For all policies of industrial insurance be calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table; and   For all policies issued in a particular calendar year be calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this subsection (h) for policies issued in that calendar year.   (i)  At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this subsection (h), for policies issued in the immediately preceding calendar year.   Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by subsection (a), shall be calculated on the basis of the mortality table and rate of interest used in determining the amount of the paid-up nonforfeiture benefit and paid-up dividend additions, if any.   A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit, including any paid-up additions under the policy, on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values.   In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance.   For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on appropriate modifications of the tables mentioned in subdivision (h)(8)(B)(iv).   For policies issued prior to the operative date of the valuation manual, any commissioners' standard ordinary mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual the valuation manual shall provide the commissioners' standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the commissioner approves by regulation any commissioners' standard ordinary mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.   For policies issued prior to the operative date of the valuation manual, any commissioners' standard industrial mortality tables, adopted after 1980 by the National Association of Insurance Commissioners, that are approved by regulation promulgated by the commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. For policies issued on or after the operative date of the valuation manual the valuation manual shall provide the commissioners' standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the commissioner approves by regulation any commissioners' standard industrial mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual.   (A)  For policies issued prior to the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred twenty-five percent (125%) of the calendar year statutory valuation interest rate for such policy as defined in the Standard Valuation Law, rounded to the nearer one quarter of one percent (0.25%).   For policies issued on or after the operative date of the valuation manual the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be provided by the valuation manual.   Notwithstanding any other provision in this code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form that involves only a change in the interest rate or mortality table used to compute nonforfeiture values shall not require refiling of any other provisions of that policy form.   After April 1, 1982, any company may file with the commissioner a written notice of its election to comply, with respect to any plan of insurance, with this subsection (h) after a specified date before January 1, 1989, which shall be the operative date of this subsection (h) for that plan of insurance for the company. If a company makes no election with respect to any plan of insurance, the operative date of this subsection (h) for that plan of insurance issued by the company shall be January 1, 1989.   In the case of any plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or in the case of any plan of life insurance that is of such a nature that minimum values cannot be determined by the methods described in subsections (a)-(h), then:  
 No life insurance company, fraternal benefit society, order or association authorized to do business in this state shall hereafter be permitted to issue policies, certificates or contracts to policyholders or members providing for the establishment of its policyholders or members into divisions and classes for the purpose of providing for the payment of benefits from special funds created for that purpose to the oldest member of the division and class or to the member of the division and class whose policy has been in force the longest period of time, upon the death of a member in the division and class; provided, that any life insurance company, fraternal benefit society, order or association heretofore issuing policies, certificates, or contracts on this plan in this state may continue so to do on condition that the life insurance company, fraternal benefit society, order or association shall not hereafter establish its policyholders or members into divisions or classes, other than the divisions or classes actually containing subsisting policies or certificates on February 23, 1939. No division of any class shall contain more than twenty-six (26) policyholders. No additional policyholder or policyholders shall ever be added to any of the divisions in this state because of vacancy or vacancies created by lapsed policies, death or otherwise, and no policyholder or policyholders shall be added in this state to any of the divisions under any circumstances.  
  No agent or organizer of any life insurance company, fraternal benefit society, order or association referred to in  56-7-501 shall promise any particular number or position in class or division to any existing policyholder of contingent or mortality endowment contracts, as described in  56-7-501.   For violation of this section, agents shall be subject to revocation of license or shall pay a fine of fifty dollars ($50.00) on each individual violation, following a hearing before the commissioner; and, in the commissioner's discretion, the company that the agent represents shall be liable, following repeated violations by its agents operating in this state, to a fine not exceeding a total of two hundred fifty dollars ($250) in the commissioner's discretion following a hearing.   
 The commissioner has authority, upon examination and investigation of any companies writing the contracts referred to in  56-7-501, to make orders the commissioner finds necessary from time to time to carry out the duties imposed upon the commissioner by law and by this part; but the orders shall not include authority to order the company to return premiums collected during the period and prior to the order.  
 This part shall be known and may be cited as the Tennessee Right to Shop Act.  
 As used in this part:   Allowed amount means the contractually agreed upon payment amount between a carrier and a healthcare entity participating in the carrier's network, excluding any member deductible, co-pay, or other obligation;   Commissioner means the commissioner of commerce and insurance;   Comparable healthcare service includes, but is not limited to:  Physical and occupational therapy services;   Radiology and imaging services;   Laboratory services; and   Infusion therapy;     Department means the department of commerce and insurance;   Health plan means health insurance coverage as defined in  56-7-109;   Healthcare entity means:  Any healthcare facility licensed under title 33 or 68; and   Any healthcare provider licensed under title 63 or 68;     Insurance carrier or carrier means a health insurance entity as defined in  56-7-109; and   Shopping and decision support program means the program established by a carrier pursuant to this part.   
   Beginning upon approval of the next health insurance rate filing on or after January 1, 2021, a carrier offering a health plan in this state shall implement a shopping and decision support program that provides shopping capabilities and decision support services for enrollees in a health plan. Beginning on January 1, 2021, a carrier may provide incentives for enrollees in a health plan who elect to receive a comparable healthcare service from a network provider that is covered by the health plan and that is paid less than the average allowed amount paid by that carrier to network providers for that comparable healthcare service before and after an enrollee's out-of-pocket limit has been met.   Incentives, effective January 1, 2021, may be calculated as a percentage of the difference between the amount actually paid by the carrier for a given comparable healthcare service and the average allowed amount for that service. Incentives may be provided as a cash payment to the enrollee, a credit toward the enrollee's annual in-network deductible and out-of-pocket limit, or a credit or reduction of a premium, a copayment, cost sharing, or a deductible.   The shopping and decision support program may provide each enrollee with at least fifty percent (50%) of the carrier's saved costs for each comparable healthcare service. However, the shopping and decision support program may exclude incentive payments, credits, or reductions for services where the savings to the carrier is fifty dollars ($50.00) or less.   The average allowed amount must be based on the actual allowed amounts paid to network providers under the enrollee's health plan within a reasonable timeframe, not to exceed one (1) year.   Annually, at enrollment or renewal, a carrier shall provide, at a minimum, notice to enrollees of the right to obtain information described in subdivision (a)(4) and the process for obtaining the information, and a description of how to earn any incentives. A carrier shall provide this notice on the carrier's website and in health plan materials provided to enrollees.     An insurance carrier shall make the shopping and decision support program available as a component of all health plans offered by the carrier in this state.   Prior to offering the shopping and decision support program to any enrollee, a carrier shall file a description of the shopping and decision support program established by the carrier pursuant to this section with the department. The insurance carrier has discretion as to the appropriate format for providing the information required and may customize the format in order to provide the most relevant information necessary to permit the department to determine compliance. The department may review the filing made by the carrier to determine if the carrier's shopping and decision support program complies with this section.    Beginning January 1, 2022, a carrier shall annually file with the department for the most recent calendar year the total number of comparable healthcare service incentive payments made pursuant to this section, the use of comparable healthcare services by category of service for which comparable healthcare service incentive payments were made, the total incentive payments made to enrollees, the average amount of incentive payments made by service for the transactions, and the total number and percentage of a carrier's enrollees that participated in the transactions.   Beginning in 2022 and by April 1 of each year thereafter, the commissioner shall submit an aggregate report for all carriers filing the information required by this subsection (d) to the commerce and labor committee of the senate and the insurance committee of the house of representatives. The commissioner may set reasonable limits on the annual reporting requirements on carriers to focus on the more popular comparable healthcare services.     
   Except as provided in subdivision (a)(2), beginning upon approval of the next health insurance rate filing on or after January 1, 2020, a carrier offering a health plan in this state shall comply with this section.   On and after December 1, 2020, a carrier offering a health plan in this state shall make available the interactive member portal described in subsection (b), and may make available the toll-free phone number described in subsection (b).      A carrier shall make available an interactive member portal or a toll-free phone number that enables an enrollee to request and obtain from the carrier information on out-of-pocket costs to the enrollee for the comparable healthcare services or on the average payments made by the carrier to network entities or providers for comparable healthcare services, as well as quality data for those providers, to the extent available.   The member portal or toll-free phone number must allow an enrollee seeking information about the cost of a particular healthcare service to estimate out-of-pocket costs applicable to that enrollee and compare the average allowed amount paid to a network provider for the procedure or service under the enrollee's health plan within a reasonable timeframe not to exceed one (1) year.   The out-of-pocket estimate must provide a good faith estimate based on the information provided by the enrollee or the enrollee's provider of the amount the enrollee will be responsible to pay out-of-pocket for a proposed non-emergency procedure or service that is determined by the carrier to be a medically necessary covered benefit from a carrier's network provider, including any copayment, deductible, coinsurance, or other out-of-pocket amount for any covered benefit, based on the information available to the carrier at the time the request is made, and subject to further medical necessity review by the carrier. A carrier may contract with a third-party vendor to comply with this subsection (b).   A carrier shall provide the information described in this subsection (b) by the carrier's member portal or toll-free phone number even if the enrollee requesting the information has exceeded the enrollee's deductible or out-of-pocket costs according to the enrollee's health plan. Existing transparency mechanisms or programs that estimate out-of-pocket costs for enrollees still within their deductible qualify under this section as long as those mechanisms or programs continue to disclose the estimated average allowed amount even after an enrollee has exceeded the enrollee's deductible as well as any estimated out-of-pocket cost.     Nothing in this section prohibits a carrier from imposing cost-sharing requirements disclosed in the enrollee's policy, contract, or certificate of coverage for unforeseen healthcare services that arise out of the non-emergency procedure or service or for a procedure or service provided to an enrollee that was not included in the original estimate.   A carrier shall notify an enrollee that the provided costs are estimated costs, and that the actual amount the enrollee will be responsible to pay may vary due to unforeseen services that arise out of the proposed non-emergency procedure or service.   
 At the request of a patient, a healthcare provider licensed under title 63 or 68 shall provide a copy of an order for a comparable healthcare service within two (2) business days of the request.  
 The state insurance committee, created by  8-27-201, shall publish a report no later than January 1, 2020, on examples of shared savings incentive programs that directly incentivize current enrollees and retirees to shop for lower cost care in other states and consider implementation of such a program in this state. The state insurance committee may implement such a program as part of the next open enrollment period if it is believed to be cost effective. The state insurance committee shall share the report in writing to the government operations committees in both the senate and house of representatives.  
 The commissioner is authorized to promulgate rules as necessary to implement this part. The rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 Except for  56-7-3506, and notwithstanding  56-7-1005, this part does not apply to:   Any managed care organization contracting with the state to provide insurance through the TennCare program or the CoverKids program; or   Any plan described in Section 1251 of the federal Patient Protection and Affordable Care Act (42 U.S.C.  18011) and Section 2301 of the federal Health Care and Education Reconciliation Act.   
 Notwithstanding this part, the total value of incentives offered to any one (1) enrollee must not exceed five hundred ninety-nine dollars ($599) in any year.  
  The Tennessee advisory commission on intergovernmental relations (TACIR) is directed to perform a study of any cost savings realized by enrollees with health plans, including private health plans and state funded health plans, in states that have adopted legislation or programs that require carriers offering health plans in those states to offer incentive programs to enrollees for shopping for healthcare services at lower costs, commonly referred to as Right to Shop legislation or programs. The study shall include, at a minimum, an examination of savings realized by such programs in Maine, New Hampshire, Florida, Arizona, and Kentucky.   All appropriate state departments and agencies shall provide assistance to TACIR.   TACIR shall report its findings to the general assembly no later than December 2020.   
 Industrial life insurance, as used in  56-7-702  56-7-704, means that form of life insurance, the policies for which include the words industrial policy as part of the descriptive matter; and:   Under which the premiums are payable weekly; or   Under which the premiums are payable monthly or more often, but less often than weekly, if the face amount of the insurance provided in the policy is one thousand dollars ($1,000) or less.   
  Definitions.  As used in this section:  Insurer means any person, firm, corporation, partnership, association, trust, or other entity of any type engaged as a principal in the business of insurance in this state;   Policyowner, absent any policy provision to the contrary, means the person who, according to the insurer's records, has the right to change the beneficiary under the policy; provided, that nothing in this section shall be construed to limit the rights of any assignee of a small insurance policy to enforce any assignment pursuant to its terms, or to prohibit an insurer from recognizing the assignment according to its terms; and   Small policy, small insurance policy, or small insurance means any life insurance policy issued after April 1, 1980, that meets the definition of industrial life insurance in  56-7-701. For the purposes of this subdivision (a)(3), face amount does not include payments contingent upon:  Time elapsing before the insured's death;   Cause of the insured's death; or   Circumstances of the insured's death.       Small Insurance Policy Law of 1979.  After April 1, 1980, except the provisions required by subdivision (b)(15), all industrial life insurance policies delivered or issued for delivery in this state shall contain provisions not less favorable to the policyowner than the following:  A provision that the insured is entitled to a grace period of four (4) weeks within which the payment of any premium after the first may be made, except that in policies for which premiums are payable monthly, the period of grace shall be either one (1) month or thirty (30) days; during which period of grace the policy shall continue in full force; but in case the policy becomes a claim within the grace period before the overdue premiums are paid, the amount of the overdue premiums may be deducted in any settlement under the policy;   A provision that the policy constitutes the entire contract between the parties, or a provision that the policy and the application for the policy constitute the entire contract between the parties; and in the latter case the policy must contain a provision that all statements made by the insured shall, in the absence of fraud, be deemed to be representations and not warranties. No statement in the application shall be used to avoid the policy unless a copy of the application has been attached to and made a part of the policy when issued;   A provision that the policy shall be incontestable after it has been in force during the lifetime of the insured for a specified period, not more than two (2) years from its date except for nonpayment of premiums and except for violations of conditions of the policy relating to naval and military services in time of war;   A provision that if it is found that the age of the person insured, or the age of any other person considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium paid would have purchased at the correct age or ages;   If a participating policy, a provision indicating the conditions under which the company shall periodically ascertain and apportion any divisible surplus accruing on the policy;   A provision that will provide for a stipulated form of insurance in the event of default of premium payments after premiums have been paid for three (3) full years; and a provision that, in the event of default in premium payments after premiums have been paid for three (3) full years, there shall be a specified cash surrender value available in lieu of the stipulated form of insurance, and the amount of which stipulated cash value shall not be less than the reserve on the policy and any dividend additions thereto, if any, at the end of the last completed quarter of the policy year for which premiums have been paid, the policy to specify a mortality table, rate of interest and method of valuation adopted to compute such reserve, exclusive of any reserve on disability benefits and accidental death benefits, less a maximum percentage of not more than two and one half percent (2.5%) of the maximum cash amount insured by the policy and dividend addition thereto, if any, when the issue age is under ten (10) years, and less a maximum percentage of not more than two and one half percent (2.5%) of the current cash amount insured by the policy and dividend additions thereto, if any, if the issue age is ten (10) years or older, and less any existing indebtedness to the company on or secured by the policy;   A provision, if the policy provides for more than one (1) stipulated form of insurance, for a period of not less than sixty (60) days from date of defaulted premium within which the insured shall be entitled to notify the company in writing of the insured's election of an option, it being expressly stated as to which option will automatically apply in the event of the insured's failure to notify the company of the selection within the stipulated period;   A provision that the policy may be surrendered to the company at its home office within a period of not less than sixty (60) days after the due date of the defaulted premium for the specified cash value; provided, that the insurer may defer payment for not more than six (6) months after the application for the payment is made;   A provision that if, in the event of default in premium payments, the value of the policy shall be applied to the purchase of other insurance; and if the insurance is in force and the original policy has not been surrendered to the company and cancelled, the policy may be reinstated within three (3) years from the default upon evidence of insurability satisfactory to the company and payment of arrears of premiums, with interest;   A table showing in figures the nonforfeiture options and loan values available under the policy every year upon default in payment of premiums during at least the first twenty (20) years of the policy, the table to begin with the year in which the values become available, and a provision that the company will furnish upon request an extension of the table beyond the years shown in the policy;   A provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and not later than two (2) months after receipt of proof;   A title on the face of the policy briefly describing its form;   A provision that no agent shall have the power or authority to waive, change or alter any of the terms or conditions of any contract delivered or issued for delivery;   A space on the front or back page of the policy for the name of the beneficiary designated, with a reservation of the right to designate or change the beneficiary after the issuance of the policy. The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured. The policy may also contain a provision that if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than thirty (30) days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured or is not legally competent to give valid release, then the insurer may make payment under the policy to the executor or administrator of the insured, or to any of the insured's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled to the payment by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention or burial of the insured;   A provision in policies issued after July 1, 1980, that after three (3) full years' premiums have been paid the company at any time while the policy is in force will advance on proper assignment of the policy and on the sole security of the policy, at a specified rate of interest, a sum equal to, or, at the option of the policyowner, less than the amount required by  56-7-2309 under the conditions specified by  56-7-2309; and that the company will deduct from the loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year; provided, that nothing in this subdivision (b)(15) shall require a policy loan in an amount less than twenty-five dollars ($25.00). It shall be further stipulated in the policy that failure to repay the advance or to pay interest shall not void the policy unless the total indebtedness on the policy to the company equals or exceeds the loan value at the time of the failure, nor until one (1) month after written notice has been mailed or otherwise delivered by the company to the last known address of the policyowner and of the assignee, if any. No condition other than as provided in this subdivision (b)(15) or in  56-7-2309 shall be exacted as a prerequisite to the advance. This provision shall not be required in term insurances;   A provision that all premiums shall be payable in advance either at the home office of the company or to any agent of the company upon delivery of a receipt signed by one (1) or more of the officers who shall be named in the policy;   A provision stating clearly, understandably and conspicuously in substance that the policyowner shall be permitted to return it within a period of not less than ten (10) days of its delivery to the policyowner and to have the premium paid by the policyowner refunded if the policyowner so elects. If the policyowner returns the policy to the insurer, the policy shall be void from the beginning, the parties shall be in the same position as if no policy had been issued and the insurer shall promptly refund any premiums collected in connection with the policy;    One (1) of the following provisions:   That if the policyowner pays in one (1) sum premiums in advance of their due date by not fewer than fifty-two (52) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures a refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; or   That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least fifty-two (52) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that the insurer shall determine not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than fifty-two (52) weeks;     One (1) of the following provisions:   That if the policyowner pays in one (1) sum premiums in advance of the due date of the premiums by not fewer than twenty-six (26) weeks from the due date, the insurer shall provide a discount at a rate that the insurer shall determine not less frequently than annually; provided, that if the policyowner secures refund of any portion of the premiums within the period in which they are prepaid, the insurer may set off against the refund an amount not in excess of the amount of the discount; and provided, further, that nothing in this subsection (b) shall require the insurer to provide any discount in an amount of less than four dollars ($4.00); or   That if the policyowner has paid in one (1) sum premiums in advance of the due date of the premiums for a period of at least twenty-six (26) weeks from the due date, the insurer shall provide a refund in cash or in premium credit, as the policyowner may elect, at the end of that period at a rate that shall be determined by the insurer not less frequently than annually, which rate the insurer shall make available to its policyowners upon request, if the premiums have not been withdrawn by the policyowner during the period of not fewer than twenty-six (26) weeks; provided, that nothing in this subsection (b) shall require the insurer to provide any refund in an amount less than four dollars ($4.00).         Requirements and Prohibitions.  No insurer shall offer, sell, issue, or deliver within this state any small insurance policy unless and until there has been compliance as to the policy with each provision of this section and the regulations adopted pursuant to this section;    No small insurance policy shall contain any of the provisions prohibited by  56-7-2308;   No small insurance policy shall exclude or restrict the payment of the face amount by reason of the fact that the death of the insured occurred due to the act of another;     Every small insurance policy shall be subject to the requirements of  56-7-2311, and as a part of the approval, the insurer shall be required to sustain the burden of satisfying the commissioner that the policy complies with this section. The commissioner shall disapprove any form if it contains provisions that are misleading, deceptive or encourage misrepresentation of the coverage or are contrary to this title or of any rule or regulation promulgated under this title;   Each of the optional benefits and charges provided under a small insurance policy shall be separately priced, and the prices shall be set forth in the policy in a clear, conspicuous and understandable manner;   No small insurance policy shall be delivered or issued for delivery in this state, nor shall any endorsement, rider, or application be used in connection with the policy until a copy of the form and of the premium rates for the policy have been filed with the commissioner;   No insurer shall deliver a small policy in this state unless the company has first taken the written application of the insured or proposed policyowner on an application form theretofore approved by the commissioner. The application shall contain an acknowledgment by the applicant that the applicant has reviewed the life insurance program, disclosures by the applicant of the total face amount of insurance and the number of policies on the life of the applicant and the proposed insured, if the proposed insured is a person other than the applicant, and an acknowledgment that the applicant is aware of the relationship of the cost of the insurance program to the applicant's total income.     Enforcement.  Any insurer who fails to comply with any requirement imposed under this section with respect to any person is liable to the person, in a private right of action, in an amount equal to the sum of:  Any actual damage sustained by the person as a result of the failure; and   The court may grant equitable and declaratory relief necessary to enforce the requirements of this section;     In addition to other applicable provisions, compliance with this section shall also be enforced by the commissioner. A violation of this section shall be punishable by a civil penalty not to exceed five hundred dollars ($500) for each offense;   The failure of an insurer to comply with this section shall not invalidate the policy, and the violation shall not provide a defense to the insurer as to any claim brought by the holder.     Miscellaneous Provisions.  Approvals heretofore granted all small insurance policies filed and approved under  56-7-2311, or any predecessor, shall be withdrawn on April 1, 1980, and no policy form shall be issued after that date unless the policy has first been filed and approved in accordance with law;   When any small insurance policy provides for weekly premium payments, there may be a provision that upon proper notice to the insurer, while premiums on the policy are not in default beyond the grace period, of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for the purpose, the insurer will, at the end of each period of a year from the due date of the first premium so paid, for which period the premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount that fairly represents the savings in collection expense.     
 The requirements of  56-7-702 shall not be applicable as follows:   When an industrial life insurance policy is issued providing for accident and/or health benefits, in addition to natural death benefits, the requirements of  56-7-702 shall apply only to the life insurance portion of the policy;   Any of  56-7-702(a) not applicable to nonparticipating or term policies shall to that extent not be incorporated into the policies. Section 56-7-702(a) does not apply to policies issued or granted pursuant to the nonforfeiture provisions described in  56-7-702(b)(6)-(8); and in the case of any company that elects to comply with  56-7-401 and 56-7-702(b)(6)-(8) and (10) shall apply only to policies issued prior to the operative date of  56-7-401. Furthermore, in the case of term insurance policies of twenty (20) years or less that are not subject to  56-7-401 and 56-7-702(b)(6)-(8) shall not be required, but the term policies shall specify the mortality table, rate of interest, and method of valuation for computing reserves;   The provisions of  56-7-702 are in addition to, and not in lieu of, other provisions that may now or hereafter be contained in policies delivered or issued for delivery in this state, unless the provisions are wholly inconsistent with and repugnant to the provisions set out in  56-7-702.   
 Any industrial life insurance contracts may be delivered or issued for delivery in this state, which contracts contain provisions more favorable to the policyholder than those required by  56-7-701  56-7-704, and nothing in  56-7-701  56-7-704 shall be construed as prohibiting more favorable provisions.  
 No insurance company or association transacting an industrial life, health, or accident business in this state, and no officer, director, or agent thereof, shall knowingly issue, circulate, or cause to be issued or circulated, any estimate, illustration, circular, or statement of any sort misrepresenting the terms of any policy issued by it, or the benefits or advantages promised by the policy, or dividends or shares or surplus to be received on the policy, or shall use any name or title of any policy or class of policies that misrepresent the true nature of the policy; provided, that industrial insurance, as used in this section, means insurance on which the premiums are payable in weekly installments.  
 No officer, director, or agent of an insurance company or association transacting an industrial insurance business in this state shall knowingly and willfully receive any premium or assessment on behalf of any industrial insurance company or association or fraternal organization, knowing at the time of receipt of the premium or assessment that the company or association is insolvent according to the laws of the state of the organization of the company, without giving notice to the person paying the premium or assessment.  
 No officer, director, agent, physician, or other person shall, with intent to defraud, knowingly issue or cause to be issued or aid in issuing an industrial policy or benefit certificate to any infirm or unhealthy person who is not in insurable condition, nor aid in reinstating in membership or policy standing any infirm or unhealthy person.  
 No person shall knowingly or willfully make or aid in making any false or fraudulent statement of any material fact or thing in any written statement or certificate for the purpose of procuring or attempting to procure the payment of any false or fraudulent claim against any industrial insurance company or fraternal or benefit association, and no person shall make any false or fraudulent statement in any application for insurance, or as to the death or disability of the policy or certificate holder for the purpose of obtaining any money or benefit from the industrial insurance company or fraternal or benefit association licensed to do business in this state.  
 Any violation of   56-7-705  56-7-708 is a Class C misdemeanor.  
  Within ninety (90) days after making or writing any contract of fire insurance on any building or structure in this state, the company, its designee or agent, shall cause the building or structure to be inspected.   No company, agent or insurance producer shall knowingly issue, negotiate, continue or renew, or cause or permit to be issued, negotiated, continued or renewed any fire insurance policy upon property or interests in the property within this state of an amount that, with any existing insurance on the property, exceeds the fair value of the property.   
 If buildings within the state insured against loss by fire are totally destroyed by fire, the company shall not be liable beyond the actual value of the insured property at the time of the loss or damage; and if it appears that the insured has paid premiums on an amount in excess of the actual value, the insured shall be reimbursed the proportionate excess or premiums paid on the difference between the amount named in the policy and the actual value, with interest at six percent (6%) per annum from the date of issue; and the excess of premiums, and interest on the premiums, shall be allowed the insured from the time any companies carrying the insurance at the time of the loss have continuously carried the insurance on the destroyed buildings, whether under policies existing at the time of the loss or under previous policies in the same companies.  
 If the company, its designee or agent, fails to place a reasonable value on any insured property within the ninety-day period provided in  56-7-801, and that is agreed to by the insured, and a loss occurs, then the value as shown by the policy or application is conclusively presumed to be reasonable, and settlement shall be made on that basis.  
 When any person, as trustee, mortgagee, assignee, or otherwise, possesses or has any fire insurance policy on realty made payable to the person, or other person as that person's interest may appear, then the insurance as to the interest of the trustee, mortgagee, assignee or other person named in the policy shall not be invalidated by an act or neglect of the mortgagor owner of the property so insured, nor by any foreclosure or other proceedings or notice of sale relating to the property, nor by change in title or ownership of the property, nor by occupation of the premises for purposes more hazardous than are permitted by the policy; provided, that, in case the mortgagor or owner neglects to pay any premium due under the policy, the mortgagee, trustee, assignee, or other person shall on demand, pay the premium; and provided, further, that the mortgagee, trustee, assignee, or other person shall notify the insurance company of any change of ownership or occupancy or increase of hazard that comes to the knowledge of the mortgagee, trustee, assignee, or other person, and, unless permitted by the policy, it shall be noted on the policy, and the mortgagee, trustee, assignee, or other person shall, on demand, pay the premium for the increased hazard for the term of the use of the property, or otherwise the policy shall be null and void; and provided, further, that in the event the insurer concludes to cancel its policy under its terms, then ten (10) days' notice of the determination shall be given to the mortgagee, trustee, assignee, or other person so interested.  
  Application of Law.  All accident and health insurance for a term of ten (10) years or less in connection with loans or credit transactions shall be subject to this section, except insurance in connection with a loan or other credit transaction of more than fifteen (15) years' duration; nor shall insurance be subject to this section where the issuance of the insurance is an isolated transaction on the part of the insurer not related to an agreement or a plan for insuring debtors of the creditor.   Filing of Forms.  All policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders delivered or issued for delivery in this state, and the schedules of premium rates pertaining to the policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders, shall be filed with the commissioner.   Disapproval by Commissioner.  The commissioner shall, within sixty (60) days after the filing of the policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements, riders and rates, disapprove the rate or form if the benefits provided in the rate or form are not reasonable in relation to the premium charge, or if the rate or form contains provisions that are unjust, unfair, inequitable, misleading, deceptive, or encourage misrepresentation of the coverage or are contrary to this title or any rule or regulation promulgated under this title.   Effect of Disapproval Hearing.  If the commissioner notifies the insurer that the form or rate is disapproved, it shall be unlawful thereafter for the insurer to issue or use the form or rate. In the notice, the commissioner shall specify the reason for disapproval and state that a hearing will be granted within twenty (20) days after request in writing by the insurer. The policy, certificate of insurance, notice of proposed insurance, and any application, endorsement, rider, or rate may be issued or used after the expiration of sixty (60) days from the date it has been so filed, unless the commissioner has issued prior written disapproval within the sixty-day period.   Withdrawal of Approval.  The commissioner may, at any time after a hearing held not less than twenty (20) days after written notice to the insurer, withdraw approval of the form or rate on any ground set forth in subsection (c). The written notice of the hearing shall state the reason for the proposed withdrawal. It is unlawful for the insurer to issue or use the form or rate after the effective date of the withdrawal.   Group Insurance.  The insurer shall be required to file only the group certificate and notice of proposed insurance delivered or issued for delivery in this state as specified in regulations, if any, issued by the commissioner, and the forms shall be approved by the commissioner if they conform with the requirements specified in the regulations, if any, and if the schedules of premium rates applicable to the insurance evidenced by the certificate or notice are not in excess of the insurer's schedules of premium rates filed with the commissioner; provided, that the premium rate in effect on existing group policies may be continued until the first policy anniversary date following July 1, 1968, if a group policy of credit accident and health insurance:  Has been delivered in this state before July 1, 1968; or   Has been or is delivered in another state before or after July 1, 1968.     Judicial Review.  Any order or final determination of the commissioner under this section shall be subject to judicial review.   Insurers Must Be Authorized.  All forms shall be delivered or issued for delivery in this state only by an insurer authorized to do an insurance business therein, and shall be issued only through holders of licenses or authorizations issued by the commissioner.   Enforcement.  The commissioner may, after notice and hearing, issue rules and regulations the commissioner deems appropriate for the supervision of this section.   
   As used in this section:  Compensation includes commissions, dividends, except where they are the distribution of earnings to stockholders of an insurance company or insurance holding company, retrospective rate credits, service fees, expense allowances or reimbursements, underwriting participations, gifts or any other form of compensation. A distribution of earnings to a stockholder of an insurance company or insurance holding company does not constitute compensation for purposes of this section, even though the stockholder receives compensation in a capacity other than that of stockholder; and   Creditor means the lender of money or vendor or lessor of goods, services, or property rights, or privileges, for which payment is arranged through a credit transaction, or any successor to the right, title, or interest of any lender, vendor, or lessor, or an affiliate, associate or subsidiary of any of them, or any director, officer or employee of any of them, or any other person in any way associated with them.     All other terms used in this section have the meanings generally ascribed to them in the insurance industry.     No insurer shall pay or propose to pay, directly or indirectly, to any creditor as compensation for that creditor, total compensation in excess of forty percent (40%) of premiums earned, except that if provision is made for refund of unearned commissions in the event of termination of coverage, commissions may be paid in one (1) sum at the time the single premium policy or certificate is written.   
 All life insurance policies and certificates issued in connection with loans or credit transactions for a duration of fifteen (15) years or less shall be subject to  56-7-902  56-7-912, except in connection with a loan or other credit transaction where the period of coverage on the debtor determined at date of issuance of the coverage is of more than ten (10) years' duration. Insurance shall not be subject to  56-7-902  56-7-912 where the issuance of the insurance is an isolated transaction on the part of the insurer not related to an agreement or a plan for insuring debtors of the creditor.  
 As used in  56-7-903, this section and  56-7-905  56-7-912, unless the context otherwise requires:   Claims means benefits payable on death or disability, excluding loss adjustment expense, claims settlement costs, or other additions of any kind;   Claims incurred means claims actually paid during the reporting year, plus the reserves at the end of the year for reported claims in the process of settlement and for claims incurred but not reported, less the corresponding reserves at the end of the preceding year. All reserves shall be determined in a consistent manner from year to year;   Credit life insurance means insurance on the life of a debtor for a period of ten (10) years or less in connection with a specific loan or other credit transaction of fifteen (15) years duration or less to provide payment to a creditor in the event of the death of a debtor;   Creditor means the lender of money or vendor or lessor of goods, services, or property, rights, or privileges, for which payment is arranged through a credit transaction, or any successor to the right, title, or interest of the lender, vendor, or lessor, or an affiliate, associate or subsidiary of any of them, or any director, officer or employee of any of them, or any other person in any way associated with them;   Debtor means a borrower of money or a purchaser or lessee of goods, services, property, rights or privileges for which payment is arranged through a credit transaction;   Identifiable charge means the amount a creditor charges a debtor or collects from the debtor for credit life insurance in addition to any other stated charges, including interest or discount, permitted by law. A differential in interest rates between insured and uninsured loans is an identifiable charge;   Indebtedness means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction;   Insurer means an insurance company licensed to write credit life insurance;   Joint life coverage means credit life insurance covering two (2) or more lives, either on a level or decreasing term basis where the entire sum insured becomes payable upon the death of the first insured debtor to die while the insurance is in force; and    Premiums earned means the total gross premiums that become due the insurer, without reduction of any kind, except:   Premiums refunded or adjusted on account of termination of coverage; and   Adjustments to reflect changes in gross unearned premiums in force upon a pro rata basis or a sum of the digits basis, where applicable;     Where premiums are payable monthly on the basis of outstanding insured balances, premiums earned means the total premiums paid the insurer during the reporting year, plus premiums due the insurer but unpaid at the end of that year, less premiums due the insurer but unpaid at the end of the previous year;   As defined under either system, premiums earned shall be determined without reduction of any kind except for the premium refunds and adjustments;   This definition shall not control the preparation of financial statements, but shall be used when  56-7-903  56-7-912 specifically refer to premiums earned.     
  Credit life insurance policies that provide benefits differing in kind or character from the following shall not be permitted:  Individual policies of credit life insurance issued to debtors on the term plan;   Group policies of credit life insurance issued to creditors providing insurance upon the lives of debtors on the term plan; and   Other arrangements providing credit life insurance as may be approved by the commissioner.     No insurer shall issue a policy or certificate of credit life insurance covering a resident of this state unless:  The insurer is authorized to do business in this state; and   The policy or certificate is issued through holders of licenses or authorizations issued by the commissioner.     All policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders delivered or issued for delivery in this state and the schedules of premium rates pertaining to the policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders, shall be filed with the commissioner.   Insurers doing credit life insurance business in this state shall annually file with the commissioner a report of its credit life insurance experience on forms prescribed by the commissioner.   
  When credit life insurance is effected on a debtor, it shall be evidenced by an individual policy or, in the case of group insurance, by a certificate of group insurance, which policy or certificate shall be delivered to the debtor at the time the indebtedness is incurred or within thirty (30) days after the debtor becomes insured with respect to the indebtedness.    Each such individual policy or certificate of group insurance shall, in addition to other requirements of law, set forth:  The name and home office address of the insurer;   The identity of the debtor by name or otherwise and the debtor's age at issue or date of birth, if the age is material to claim payment, premium calculation or reserve calculation;   The amount and term of the coverage, if possible, or otherwise a clear description of the means of determining the amount and time of expiry;   The amount of premium or identifiable charge, if any, separately in connection with credit life insurance, unless, in the case of group insurance, the premium or identifiable charge has been disclosed to the debtor as provided in subsection (c). A copy of the document bearing the information required by this subdivision (b)(1)(D) shall be forwarded to the insurer or retained by the creditor in a manner that facilitates the good faith examination required in  56-7-910(c);   The circumstances and formula under which refunds of premiums or identifiable charges are payable pursuant to   56-7-909;   A description of the insurance coverage, including any exceptions, limitations or restrictions; and   A provision that:   The benefits shall be paid to the creditor to reduce or extinguish any unpaid indebtedness of the debtor to the creditor; and   Where the amount of insurance exceeds any unpaid indebtedness that excess shall be payable to the debtor or to the debtor's designated beneficiary, other than the creditor, or, if the debtor has designated none, to the estate of the debtor or under the provision of a facility of payment clause in the policy.       A certificate of group insurance is not required to contain the information described in subdivisions (b)(1)(B)-(D) if the information is otherwise provided in the disclosure statement provided to the debtor under the federal Truth-In-Lending Act (15 U.S.C.  1601 et seq.).      If an individual policy or certificate of group insurance is not delivered to the debtor at the time the indebtedness is incurred, a copy of the application for the policy signed by the debtor and the creditor/agent or a notice of proposed group insurance shall be delivered to the debtor at the time the indebtedness is incurred. The application or notice shall set forth the following:  The name and home office address of the insurer;   The identity of the debtor, by name or otherwise;   The amounts or rates of premium or identifiable charge to the debtor, if any, separately in connection with credit life insurance and credit health and accident insurance;   The amount and term of the coverage provided, or description as provided in subdivision (b)(1)(C); and   A brief description of the coverage provided.     The application or notice of giving insurance is not required to contain the information described in subdivisions (c)(1)(B)-(D) if the information is provided in the disclosure statement provided to the debtor under the federal Truth-In-Lending Act (15 U.S.C.  1601 et seq.).   If no identifiable charge is made to the debtor, the notice of proposed group insurance need not set forth the debtor's name. An application for an individual policy or notice of proposed group insurance shall include a statement that, if the insurance is declined by the insurer or otherwise does not become effective, any premium or identifiable charge will be refunded or credited to the debtor. The copy of the application for an individual policy and the notice of proposed group insurance shall refer exclusively to insurance coverage, and shall be separate and apart from the loan, sale or other credit statement of account, instrument or agreement, unless set forth in the policy in a separate provision with an appropriate and prominent caption on the face or reverse thereof in type at least equal in size to the type used for the other provisions. The insurer shall be responsible for establishment of procedures for delivery of the individual policy or certificate of group insurance to the debtor as provided in subsection (a). The application or notice of proposed group insurance shall provide that, upon acceptance by the insurer, the insurance coverage provided shall become effective as specified in  56-7-907(b).     A credit life insurance policy may exclude from those persons eligible for insurance classes of debtors determined by age and provide for the cessation of insurance or reduction in the amount of insurance upon attainment of specified ages. In the event of misstatement of age, where age is material to the acceptance or rejection of the risk, the insurer may provide for rescission of the policy or certificate issued under the policy and a refund of all premiums paid for the policy by the debtor.   A group credit life insurance policy under which premiums are paid to the insurer monthly on outstanding balances shall contain a provision that, in the event of termination of the policy by the insurer or creditor, thirty-one (31) days' notice of the termination shall be given to each debtor insured under the policy by the creditor, unless there is immediate replacement of the coverage by the same or another insurer.   A group credit life insurance policy shall contain in substance the following provisions:  A provision that the policyholder is entitled to a grace period of thirty-one (31) days for the payment of any premium except the first, during which grace period the coverage shall continue in force, unless the policyholder has given the insurer written notice of termination in advance of the date of termination and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during the grace period;   A provision that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two (2) years from its date of issue; and that no statement made by or on behalf of any person insured under the policy relating to the person's age or insurability shall be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two (2) years during the person's lifetime, unless it is contained in a written instrument and the written instrument is signed by the person. The instrument shall not be in a form that encourages misrepresentation or discourages disclosure of relevant facts;   A provision that a copy of the application of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or to the person's beneficiary;   A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as to a part or all of the person's coverage; and   A provision specifying an equitable adjustment of premiums or of benefits or of both in the event the age of a person insured has been misstated, and the misstatement would have affected the premium or amount of benefit, the provision to contain a clear statement of the method of adjustment to be used.     Disability provisions in credit life insurance policies shall be so worded as to the payment of benefits that they are at least as favorable to the debtor as policies containing only disability provisions.   Individual policies of credit life insurance shall include, in addition to the provisions set forth in this section, the provisions of  56-7-2307 that are not inconsistent with the coverage under the credit life policy.    No policy or certificate of credit life insurance shall be delivered or issued for delivery to any person in this state, unless the style, arrangement and overall appearance of the policy give no undue prominence to any portion of the text, and unless every printed portion of the text of the policy and of any endorsements or attached papers are plainly printed in light-face type of a style in general use, the size of which shall be uniform and not less than ten (10) point with a lower case unspaced alphabet length not less than one hundred twenty (120) point.   As used in subdivision (i)(1), text includes all printed matter except the name and address of the insurer, name or title of the policy, a brief description of the coverage and the limitations or exclusions, if any, captions and subcaptions, and any overprint or statement of limitation of risk required by this or any other state to be more prominently displayed.      Dividends on participating individual policies of credit life insurance shall be payable to the individual insureds. Payment of the dividends may be deferred until such time as the policy is terminated. Dividends, or retrospective rate credits in the case of nonparticipating group policies, on group policies may be paid or credited to the creditor policyholder, subject to the restrictions contained in this subsection (j). The policies may provide that dividends or retrospective rate credits that are in excess of the contribution of the creditor may be paid or credited to the individual debtors or applied in some manner for the sole benefit of debtors generally. Insurers may be required to demonstrate to the commissioner that the dividends or retrospective rate credits are in fact equitably determined.   Dividends or retrospective rate credits shall be based on premiums earned and claims incurred. Payment of dividends or retrospective rate credits based on any other assumption shall not be allowed.   Nonparticipating individual policies of credit life insurance shall not be the subject of experience rating, and no agent or creditor shall receive retrospective commissions or other compensation, direct or indirect, based on the experience of policies sold through the agent or creditor or on the lives of the person's debtors, except as provided in this section.   For the purposes of  56-4-204 and 56-4-205, retrospective rate credits shall be treated in the same manner as dividends in the computation of the tax on gross premiums.      When life insurance is requested by a creditor, the debtor shall have the option, upon notice to the creditor, of furnishing existing policies of insurance, or procuring and furnishing new policies of insurance, owned or controlled by the debtor and issued by any insurer authorized to transact an insurance business in this state for an amount not less than the indebtedness, and for the term and type of insurance coverage requested by the creditor. Any policy furnished by the debtor shall not be subject to  56-7-903  56-7-912, unless procured through or administered by the creditor or an agent or broker designated by or associated with the creditor.   Insurers writing credit insurance shall be responsible for establishment of procedures by which creditors are furnished a sufficient number of printed notices informing their debtors of the option. Creditors shall prominently display the notices.     
  The initial amount of credit life insurance issued in connection with a specific loan or other credit transaction shall not exceed the total amount repayable under the contract of indebtedness, which amount repayable may include the amount of the loan commitment by the creditor.    The term of any credit life insurance shall, subject to acceptance by the insurer, if required, and unless otherwise permitted pursuant to  56-7-906(c), commence on the date when the debtor becomes obligated to the creditor. Where a group policy provides coverage with respect to existing obligations, the credit life insurance on a debtor with respect to the indebtedness, unless otherwise expressly authorized by the commissioner, shall commence on the effective date of the policy. The term of an individual policy of credit life insurance shall not extend more than fifteen (15) days beyond the scheduled maturity date of the indebtedness unless extended at no cost to the debtor. If insurance on the life of a debtor is provided under a group policy, the term of the insurance shall not be continued for a period greater than the duration of the indebtedness.   Evidence of insurability in the form of answers to questions regarding the debtor's health may be required:  If a debtor requests coverage more than thirty (30) days after the extension of credit for which coverage is sought; or   If the amount of life insurance applied for is twenty-five thousand dollars ($25,000) or more.     Where evidence of insurability is required and the evidence is furnished more than thirty (30) days after the date when the debtor becomes obligated to the creditor, the term of the insurance may commence on the date on which the insurance company determines the evidence to be satisfactory, and in such event there shall be an appropriate refund or adjustment of any charge to the debtor for the insurance.     If the indebtedness is discharged due to prepayment, the credit life insurance in force shall be terminated. If the indebtedness is discharged due to renewal or refinancing prior to the scheduled maturity date, the insurance in force shall be terminated before any new insurance may be issued in connection with the renewed or refinanced indebtedness. In all cases of termination prior to scheduled maturity, a refund shall be paid or credited as provided in  56-7-909.   
   No insurer shall issue any policy of group credit insurance covering debtors in this state, unless the rates are reasonable in relation to the benefits provided. The rates established prior to July 1, 1987, shall not be changed or adjusted until there has been an experience factor of four (4) years under the rates.   The rate levels are reasonable for policies that:  Condition coverage on the debtor's active employment at the time the indebtedness is incurred;   Extend coverage to all debtors regardless of age or to all debtors not older than a specified limit, which shall be not less than sixty-five (65) years of age at the time the insurance becomes effective; and   Exempt from coverage suicides committed, while sane or insane, within two (2) years from the most recent date of issue of the policy or certificate.     The applicability of the rate levels shall not be affected by the fact that the insurer requires the debtor to answer questions regarding health:  If the debtor applies for coverage more than thirty (30) days after the extension of credit for which coverage is sought; or   If the amount of credit life insurance applied for is twenty-five thousand dollars ($25,000) or more.        A creditor may remit and an insurer may collect premiums on either a single premium basis or on a monthly outstanding balance basis. If the creditor adds identifiable insurance charges or premiums for credit life insurance to the total amount of indebtedness, the creditor has loaned the premium or insurance charge to the debtor and the premium on the insurance charge is deemed collected for the insurer as soon as it is added to the indebtedness. In that event the creditor must remit and the insurer must collect on a single premium basis only. A creditor may remit and an insurer may collect on the monthly basis if the insurance charge or premium is not added to the amount of the loan and does not constitute part of the outstanding indebtedness, or if no direct or indirect finance, carrying, credit or service charge is made to the debtor in connection with the insurance charge or premium.    Nothing in this subsection (b) is intended to prohibit the premium or identifiable charge for decreasing, also known as reducing, term credit life insurance from being calculated prior to the commencement of the term of the insurance:   On that amount of insurance equal to each contractual monthly or other periodic outstanding principal balance of the specific loan or other credit transaction in connection with which the insurance is issued; and   At the rate that is the actuarial equivalent of the dollar and cent approved per annum rate for equal decreasing term credit life insurance;     The premium or other identifiable charge so determined may be collected as a single premium at the commencement of the term of the insurance.     Single premium, as used in this subsection (b), means and includes that premium that is paid in a single payment, with the commencement of the term notwithstanding the method of calculation or determination.     A minimum premium of fifty cents (50) shall be considered reasonable on any policy of credit life insurance. In the event any premium is unearned and to be returned to the insured, no returned premium calculated at less than one dollar ($1.00) need be refunded.   An insurer may receive approval of a different premium rate or schedule of premium rates to be used in connection with a particular policy form, or a class or classes of debtors of a creditor, the class or classes of debtors including, but not being limited to, debtors whose repayment schedules provide for less rapid repayment of principal than is assumed in calculating rates for decreasing term credit insurance, that demonstrates to the satisfaction of the commissioner that the mortality or morbidity experience that may reasonably be anticipated to result in a premium that is reasonable in relation to the benefits provided.   If an insurer proposes to write any type of life coverage in connection with loans or credit transactions other than those described in this section, it may request a public hearing to determine if a public need exists for the coverage, and to determine, through credible statistics, the initial rate to be employed.   Where an identifiable charge for group credit life insurance is made to insured borrowers or purchasers, the charge shall not exceed the premium provided for in the group policy issued to the creditor at the date of issue of the certificate.   
  Each individual policy of credit life insurance on which the premium is paid by the debtor and each group certificate for which an identifiable charge is made to the debtor shall provide that, in the event of termination of the insurance prior to the scheduled maturity date of the indebtedness, any refund or premium or identifiable charge due shall be paid or credited promptly to the debtor. If a debtor has paid a premium or an identifiable charge for credit life insurance to the creditor and the insurance is declined by the insurer or otherwise does not become effective, the insurer or creditor shall immediately give written notice to the debtor and shall promptly arrange for refund or credit to the debtor of any premium or identifiable charge paid by the debtor for the insurance plus interest and fees charged on the premium or identifiable charge.    The refund of premiums or identifiable charges, in the case of level term credit life insurance and of reducing term credit life insurance on which premiums are payable other than by a single premium, shall be equal to the pro rata unearned gross premium, and in the case of reducing term credit life insurance paid by a single premium shall be equal to the amount computed by the sum of digits formula commonly known as the Rule of 78; however, refunds calculated at less than one dollar ($1.00) need not be made. If fifteen (15) days or less of a loan month has been earned, no charge may be made, but if over fifteen (15) days, a full month may be charged.   The formulae to be used in computing the amounts of the return premiums shall be filed with and approved by the commissioner.     An insurer shall promptly refund to an individual policyholder, and refund or credit to a group policyholder, any refund of premium due on termination of insurance prior to the scheduled maturity date of the indebtedness, and a group policyholder or creditor shall promptly refund or credit to the debtor any refund due. If an amount at least equal to the amount of any premium refund is still owed to the creditor on the indebtedness as covered, then the creditor may elect to apply the amount of the refund to the indebtedness. It shall be the obligation of the insured to notify the insurer of any early payoff of the indebtedness that is covered by insurance. Insurers shall establish procedures by which the refunds or credits are made. Each individual policy or group certificate of credit life insurance issued after January 1, 2006, shall provide a notice in the policy or certificate that it is the obligation of the insured to notify the insurer of any early payoff of the indebtedness that is covered by the insurance and that the insured may be entitled to a refund.   
  An insurer issuing credit life insurance shall be responsible for the settlement, adjustment and payment of all claims and shall establish and maintain adequate claim files, which may be reviewed and examined by the commissioner. All claims shall be promptly reported to the insurer, or its designated claim representative, and all claims shall be settled as soon as possible and in accordance with the terms of the insurance contract. Promptly reported means that adequate proofs of loss are in the possession of the insurer at the time its funds are disbursed in payment of claims. All claims shall be paid either by draft drawn upon the insurer or by check of the insurer to the order of the claimant to whom payment of the claim is due pursuant to the policy provisions, or upon direction of the claimant to the one specified.   No plan or arrangement shall be used whereby any person, firm or corporation other than the insurer or its designated claim representative is authorized to settle or adjust claims. The creditor shall not be designated as claim representative for the insurer in settling or adjusting claims; provided, that a group policyholder that employs one (1) or more persons for claims and insurance administration who are not directly involved in making loans may, by arrangement with the group insurer, draw drafts or checks in payment of claims due to the group policyholder subject to audit and review by the insurer. However, nothing in this section shall be construed to relieve the insurer of the responsibility for the proper settlement, adjustment and payment of all claims in accordance with the terms of the insurance contract and this regulation.   It is the responsibility of the insurer to make a good faith examination of each lender's account at least annually, verifying the accuracy of premiums or other identifiable credit life insurance charges, premium refunds, and claims payments which have been reported to the insurer.   
 In order to assure that sufficient funds will be made available to make the refunds as required and to guarantee promised benefits to policyholders, aggregate reserves maintained by the insurer for credit life insurance shall be at least equal to the sum of the following:   For single premium credit life insurance:    If ages are available, the net single premiums for the remaining benefits, calculated by a seriatim method using the 1980 commissioner's standard extended term table and interest of not more than three and one half percent (3.5%). Insurers using this standard may accumulate an additional reserve to assure adequacy of funds for refunds and excess claims on terminated group policies or agency agreements. Approximate methods of calculating this reserve liability may be approved by the commissioner; provided, that:        The actuarial derivation establishes clearly that the method produces at least the minimum reserve; and   The assumptions on which the approximation is based are checked for accuracy and validity against the current business of the insurer at least annually;    Approval of the methods shall be obtained from the commissioner prior to their use and the annual verification of assumptions shall be filed with the commissioner; or   If ages are not available, the gross unearned premium, on the Rule of 78 or pro rata basis as specified for refunds, calculated exactly;   For single premium credit life insurance issued after December 31, 2004:   (i)  If ages are available, an insurer may calculate the net single premium for the remaining benefits by a seriatim method using the 2001 Commissioner's Standard Ordinary Male Composite Ultimate Mortality Table in lieu of the calculations under subdivision (1) for credit life insurance issued after December 31, 2004. The interest rates used in determining the minimum standard for valuation shall be the calendar year statutory valuation interest rates as defined in  56-1-403(c)(1) [repealed]. Insurers using this standard may accumulate an additional reserve to assure adequacy of funds for refunds and excess claims on terminated group policies or agency agreements. Approximate methods of calculating this reserve liability may be approved by the commissioner; provided, that:   The actuarial derivation establishes clearly that the method produces at least the minimum reserve; and   The assumptions on which the approximation is based are checked for accuracy and validity against the current business of the insurer at least annually;   Approval of the methods shall be obtained from the commissioner prior to their use and the annual verification of assumptions shall be filed with the commissioner; or   If ages are not available, the gross unearned premium, on the Rule of 78 or pro rata basis as specified for refunds, calculated exactly; and   For credit life insurance on the outstanding balance plan, reserves shall be equal to the gross unearned premium, calculated upon a pro rata basis.  
  Within sixty (60) days of the filing of any item described in  56-7-905(c), the commissioner shall approve the item unless it contains provisions that are contrary to this title.   The commissioner may adopt rules interpreting or making specific application of  56-7-903  56-7-912, but has no power to vary or deviate from  56-7-903  56-7-911 and this section, nor to extend the commissioner's power or jurisdiction to matters not provided for in  56-7-903  56-7-912.   Notwithstanding subsection (b) or any other provision to the contrary, the commissioner may exempt credit life insurance for which no identifiable charge is made to the debtor from the application of  56-7-903  56-7-911 and this section, if the commissioner finds that the application of  56-7-903  56-7-911 and this section to the insurance is not necessary for the protection of insured debtors.   
  There is established the advisory committee on credit life insurance rates to be composed of six (6) persons, at least two (2) of whom shall be directly associated with the credit life insurance business. The governor shall appoint the members for staggered six-year terms. The members shall receive no compensation but shall be reimbursed for all travel in accordance with the travel regulations promulgated by the department of finance and administration.   It is the duty of the advisory committee to hold hearings and to recommend the rates for credit life insurance, which levels would be deemed reasonable in relation to the benefits provided. The recommendations must include rates for single life and joint life decreasing term credit life insurance, and single life and joint life level term credit life insurance. The recommendations shall be by majority vote of the membership of the advisory committee. The department shall provide any personnel, services, information or other assistance requested by the committee as it needs to decide its recommendations.   The recommendations on rates shall be filed with the commissioner. The commissioner shall approve rates for credit life insurance after consideration of the recommendations. The decision of the commissioner is appealable to chancery court, where the review shall be de novo upon the record accompanied by the presumption of correctness of the finding, unless the preponderance of the evidence is otherwise.   
  As part of its required annual statement, each company licensed to sell credit insurance in this state and each company authorized as a credit reinsurer in this state shall submit a declaration under oath executed by the company president stating whether the company or a subsidiary has:  Paid any compensation to creditors in violation of  56-7-902; or   Entered into any reinsurance transaction with a reinsurer who, with the knowledge of the declaring company, has paid compensation to creditors in violation of  56-7-902.     In the event a company submits a false declaration as described in subsection (a), the company shall be subject to the sanctions set forth in  56-8-109.   
  This part shall be known and may be cited as the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009.   The purpose of this part is to regulate trade and claims settlement practices in the business of insurance in accordance with the intent of congress as expressed in the Act of Congress of March 9, 1945, (Public Law 15, 79th Congress) and the Gramm-Leach-Bliley Act (Public Law 106-102, 106th Congress), by defining, or providing for the determination of, all such practices in this state that constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices and claim settlement practices so defined or determined.   Notwithstanding any other state law to the contrary, the commissioner shall have sole enforcement authority for this part, and nothing in this part shall be construed to create or imply a private cause of action for a violation of this part.   
  For the purposes of this part:  Adjuster means any person that is adjusting claims;   Affiliate of a depository institution means any company that controls, is controlled by, or is under common control with a depository institution;    Claim means:   An oral, written, or electronic submission for payment that is filed by an insured, on behalf of an insured, or by a third party where the insurer accepts such claims, in accordance with the insurer's reasonable submission standards; and   Is sufficient to reasonably establish contractual liability for payment on the part of an insurer;     For the purposes of  56-8-105, a claim does not mean an inquiry by an insured as to the existence of coverage or how a potential claim may affect future premiums or renewability of coverage;     Commissioner means the commissioner of commerce and insurance;   Customer, for purposes of  56-8-106, means an individual who purchases, applies to purchase or is solicited to purchase insurance products;   Depository institution means a bank or savings association. Depository institution does not include an insurance company;   Fictitious grouping means any grouping by way of membership, nonmembership, license, franchise, employment, contract, agreement or any other method or means;   Insured means the party named on a policy or certificate as the individual with legal rights to the benefits provided by the policy;   Insurer means any person, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance. Insurer shall also mean medical service plans, hospital service plans, health maintenance organizations, prepaid limited health care service plans, hospital medical service corporations, dental, optometric and other similar health service plans. For purposes of this part, these entities shall be deemed to be engaged in the business of insurance;   Person means a natural or artificial entity, including, but not limited to, individuals, partnerships, associations, trusts, corporations, insurance producers, adjusters, any employer to the extent that the employer self-insures its workers' compensation liabilities pursuant to  50-6-405(b) or a group of employers qualifying as self-insurers pursuant to  50-6-405(c), or third party administrators;   Policy or certificate means a contract of insurance, indemnity, medical, health or hospital service, suretyship, or annuity issued, proposed for issuance or intended for issuance by any insurer;   Producer means a person required to be licensed under the laws of this state to sell, solicit, or negotiate insurance under chapter 6, part 1 of this title; and   Third party administrator means any person that collects charges or premiums from, or who adjusts or settles claims on, residents of this state on behalf of an insurer, and shall include any person currently defined as an administrator by  56-6-401, any person currently defined as an administrator by Tenn. Comp. R. & Regs. 0780-1-54, or any person currently defined as a third-party administrator by Tenn. Comp. R. & Regs. 0780-1-81.     The Federal Employee Retirement Income Security Act (ERISA) (29 U.S.C.  1001), preempts certain entities and some activities of those entities from the application of state laws. The purpose of the definitions in subsection (a) is to include within this part and rules promulgated pursuant to this part, all entities and activities to the extent not preempted by ERISA.   
 No person shall engage in an unfair trade practice from, in or into this state that is defined in  56-8-104 or  56-8-106 or determined by rule pursuant to  56-8-108 to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance. No person shall engage in an unfair claim practice that is defined in  56-8-105 or determined by rule pursuant to  56-8-108 to be an unfair claim practice. However, the commissioner may not levy a civil penalty or suspend or revoke a license for violating an unfair claim practice unless:   It is committed knowingly; or   It has been committed with such frequency as to indicate a general business practice.   
 The following practices are defined as unfair trade practices in the business of insurance by any person:   Misrepresentations and False Advertising of Insurance Policies.  Making, issuing, circulating, or causing to be made, issued or circulated, any estimate, illustration, circular or statement, sales presentation, omission or comparison that:  Misrepresents the benefits, advantages, conditions or terms of any policy;   Misrepresents the dividends or share of the surplus to be received on any policy;   Makes a false or misleading statement as to the dividends or share of surplus previously paid on any policy;   Is misleading or is a misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates;   Uses any name or title of any policy or class of policies misrepresenting the true nature of the policy or class of policies;   Is a misrepresentation, including any intentional misquote of premium rate, for the purpose of inducing or tending to induce the purchase, lapse, forfeiture, exchange, conversion or surrender of any policy;   Is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any policy; or   Misrepresents any policy as being shares of stock;     False Information and Advertising Generally.  Making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any insurer in the conduct of its insurance business, that is untrue, deceptive or misleading;   Defamation.  Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting or encouraging the making, publishing, disseminating or circulating of any oral or written statement or any pamphlet, circular, article or literature that is false, or maliciously critical of or derogatory to the financial condition of any insurer, and that is calculated to injure the insurer;   Boycott, Coercion and Intimidation.  Entering into any agreement to commit, or by any concerted action committing, any act or boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of or monopoly in, the business of insurance; or   By any act of boycott, coercion or intimidation, monopolizing or attempting to monopolize any part of the business of insurance; provided, that nothing in this subdivision (4)(B) shall be interpreted as defining or determining as an unfair method of competition or any unfair or deceptive act or practice in the business of insurance any act of boycott, coercion or intimidation on the part of any person, unless the act is committed in connection with an intention on the part of the person to monopolize, or attempt to monopolize, any material part of the business of insurance; and provided further, that no insurance company shall be held to have violated this subdivision (4)(B) because of any act of a producer of that company, which act has not been authorized or approved or acquiesced in by the company;     False Statements and Entries.  Knowingly filing with any supervisory or other public official, or knowingly making, publishing, disseminating, circulating or delivering to any person, or placing before the public, or knowingly causing, directly or indirectly, to be made, published, disseminated, circulated, delivered to any person, or placed before the public, any false material statement of fact as to the financial condition of an insurer; or   Knowingly making any false entry of a material fact in any book, report or statement of any insurer or knowingly omitting to make a true entry of any material fact pertaining to the business of the insurer in any book, report or statement of the insurer, or knowingly making any false material statement to any insurance department official;     Stock Operations and Advisory Board Contracts.  Issuing or delivering or permitting agents, officers or employees to issue or deliver, agency company stock or other capital stock, or benefit certificates or shares in any common law corporation, or securities or any special or advisory board contracts or other contracts of any kind promising returns and profits as an inducement to purchase insurance;   Unfair Discrimination.  Making or permitting any unfair discrimination between individuals of the same class and equal expectation of life in the rates charged for any life insurance policy or annuity or in the dividends or other benefits payable on any policy or annuity, or in any other of the terms and conditions of the policy;     Refusing life insurance to, refusing to continue life insurance of, or limiting the amount, extent, or kind of life insurance coverage available to an individual based on the individual's past lawful travel experiences; or   (a)  Refusing life insurance to, refusing to continue life insurance of, limiting the amount, extent, or kind of life insurance available to an individual, or determining the premium of life insurance based on the individual's future lawful travel plans unless:  (ii)  (a)  Refusing life insurance to, refusing to continue life insurance of, limiting the amount, extent, or kind of life insurance available to an individual, or determining the premium of life insurance based on the individual's future lawful travel plans unless:  The risk of loss for individuals who travel to a specified destination at a specified time is reasonably anticipated to be greater than if the individuals did not travel to that destination at that time; and   The risk classification is based on sound actuarial principles and actual or reasonably anticipated experience;     An action shall be deemed to meet the requirements for exemption under subdivision (7)(B)(ii)(a ) if it is taken because either one (1) of the following is true with respect to the travel destination:  The director of the centers for disease control and prevention of the department of health and human services has issued alerts or warnings regarding serious health-related conditions or an epidemic or pandemic alert or response; or   There is an ongoing armed conflict involving the military of a sovereign nation foreign to the destination;       (a)  The commissioner is authorized to promulgate rules necessary to implement this subdivision (7)(B) and is authorized to provide for limited exceptions that are based upon national or international emergency conditions that affect the public health, safety, and welfare and that are consistent with public policy;  (iii)  (a)  The commissioner is authorized to promulgate rules necessary to implement this subdivision (7)(B) and is authorized to provide for limited exceptions that are based upon national or international emergency conditions that affect the public health, safety, and welfare and that are consistent with public policy;   An insurer shall make any pertinent underwriting guidelines and supporting analyses available to the commissioner on request;       Making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees or rates charged for any accident or health insurance policy or in the benefits payable under any accident or health insurance policy, or in any of the terms or conditions of the policy, or in any other manner;   Making or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazard by refusing to insure, refusing to renew, canceling or limiting the amount of insurance coverage on a property or casualty risk solely because of the geographic location of the risk, unless the action is the result of the application of sound underwriting and actuarial principles related to actual or reasonably anticipated loss experience;   Making or permitting any unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to insure, refusing to renew, canceling or limiting the amount of insurance coverage on the residential property risk, or the personal property contained in the residential property, solely because of the age of the residential property;   Refusing to insure, refusing to continue to insure, or limiting the amount of coverage available to an individual because of the sex, race, religion, national origin, marital status, income, or educational background of the individual; however, nothing in this subdivision (7) shall prohibit an insurer from taking marital status into account for the purpose of defining persons eligible for dependent benefits and nothing shall prohibit price distinctions between persons pursuant to underwriting and actuarial principles;   To terminate, or to modify coverage or to refuse to issue or refuse to renew any property or casualty policy solely because the applicant or insured or any employee of either is mentally or physically impaired; provided, that this subdivision (7) shall not apply to health care liability insurance or accident and health insurance sold by a casualty insurer; and, provided further, that this subdivision (7) shall not be interpreted to modify any other provision of law relating to the termination, modification, issuance or renewal of any insurance policy or contract; or   Refusing to insure solely because another insurer has refused to write a policy, or has canceled or has refused to renew an existing policy in which that person was the named insured. Nothing contained in this subdivision (7)(H) shall prevent the termination of an excess insurance policy on account of the failure of the insured to maintain any required underlying insurance;     Rebates.  Except as otherwise expressly provided by law, knowingly permitting or offering to make or making any policy of insurance, including, but not limited to, any life insurance policy or annuity, or accident and health insurance or other insurance, or agreement as to the contract other than as plainly expressed in the policy issued thereon, or paying or allowing, or giving or offering to pay, allow, or give, directly or indirectly, as inducement to the policy, any rebate of premiums payable on the policy, or any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatever not specified in the policy; or giving, or selling, or purchasing or offering to give, sell, or purchase as inducement to the policy or annuity or in connection with the policy or annuity, any stocks, bonds or other securities of any insurance company or other corporation, association or partnership, or any dividends or profits accrued thereon, or anything of value whatsoever not specified in the policy;   Nothing in subdivision (7) or subdivision (8)(A) shall be construed as including within the definition of discrimination or rebates any of the following practices:   In the case of life insurance policies or annuities, paying bonuses to policyholders or otherwise abating their premiums in whole or in part out of surplus accumulated from nonparticipating insurance, provided that any such bonuses or abatement of premiums shall be fair and equitable to policyholders and for the best interests of the company and its policyholders;   In the case of life insurance policies issued on the industrial debit plan, making allowance to policyholders who have continuously, for a specified period, made premium payments directly to an office of the insurer in an amount that fairly represents the saving in collection expenses;   Readjusting the rate of premium for a group insurance policy based on the loss or expense under the group insurance policy, at the end of the first or any subsequent policy year of insurance under the group insurance policy, that may be made retroactive only for the policy year; or   Offering a child passenger restraint system or a discount in premium equal to the amount of the purchase price of a child passenger restraint system to policyholders, when the purpose of the restraint system is the safety of a child and complies with  55-9-602;     This subdivision (8) does not prohibit the payment of a fee to a trade or professional association exempt from income tax under  501(c) of the Internal Revenue Code (26 U.S.C.  501(c));     Prohibited Group Enrollments.  No insurer shall offer more than one (1) group policy of insurance through any person unless the person is licensed, at a minimum, as a limited lines producer; however, this prohibition shall not apply to employer/employee relationships, nor to any such enrollments;   Failure to Maintain Marketing and Performance Records.  Failure of an insurer to maintain its books, records, documents and other business records in such an order that data regarding claims, rating, underwriting and marketing are accessible and retrievable for examination by the insurance commissioner. Data for at least the current calendar year and the two (2) preceding years shall be maintained;   Failure to Maintain Complaint Handling Procedures.  Failure of any insurer to maintain a complete record of all the complaints it received since the date of its last examination under  56-1-408. This record shall indicate the total number of complaints, their classification by line of insurance, the nature of each complaint, the disposition of each complaint, and the time it took to process each complaint. For purposes of this subdivision (11), complaint means a written communication expressing dissatisfaction or disagreement with the decision or action of an insurer; provided, however, that a communication submitted as part of the insurer's usual and customary claims process shall not be considered as a complaint;   Misrepresentation in Insurance Applications.  Making false or fraudulent statements or representations on or relative to an application for a policy, for the purpose of obtaining a fee, commission, money or other benefit from any provider or individual person;   Failure to File or to Certify Information Regarding the Endorsement or Sale of Long-term Care Insurance.  Failure of any insurer to:  File with the insurance department the following material:   The policy and certificate;   A corresponding outline of coverage; and   All advertisements requested by the insurance department; or     Certify annually that the association has complied with the responsibilities for disclosure, advertising, compensation arrangements, or other information required by the commissioner, as set forth by rule;     Failure to Provide Claims History.  Failure of a company issuing property and casualty insurance to provide the following loss information for the three (3) previous policy years to the first named insured within thirty (30) days of receipt of the first named insured's written request:   On all claims, date and description of occurrence, and total amount of payments; and   For any occurrence not included in subdivision (14)(A)(i), the date and description of occurrence;     Should the first named insured be requested by a prospective insurer to provide detailed loss information in addition to that required under subdivision (14)(A), the first named insured may mail or deliver a written request to the insurer for the additional information. No prospective insurer shall request more detailed loss information than reasonably required to underwrite the same line or class of insurance. The insurer shall provide information under this subdivision (14)(B) to the first named insured as soon as possible, but in no event later than twenty (20) days of receipt of the written request. Notwithstanding any other provision of this section, no insurer shall be required to provide loss reserve information, and no prospective insurer may refuse to insure an applicant solely because the prospective insurer is unable to obtain loss reserve information;   The commissioner is authorized to promulgate rules to exclude the provision of the loss information as outlined in subdivision (14)(A) for any line or class of insurance where it can be shown that the information is not needed for that line or class of insurance, or where the provision of loss information otherwise is required by law;   Information provided under subdivision (14)(B) shall not be subject to discovery by any party other than the insured, the insurer and the prospective insurer;     Unfair Replacement Transaction Practices.  Replacing a life insurance policy or an annuity contract in a manner contrary to rules promulgated by the commissioner pursuant to this part;   Unfair Utilization of Proprietary Information.  With respect to any policy of insurance underwritten in a pool, residual market mechanism, joint underwriting authority or assigned risk plan or through a plan depopulation initiative or other similar program, any information contained in a policy application or obtained in the servicing of such a policy of insurance cannot be used in any manner by the servicing carrier or its representatives for the purpose of soliciting any form of insurance, except when permission to use the information is granted by the commissioner on any specific risk;   Changing Classification and Rate After Policy Expiration or Renewal.  With respect to commercial risk insurance, making a change in the classification or rates either more than one (1) year after the policy's renewal date or the expiration date if the policy was not renewed without the written consent of the insured; provided, that no consent is necessary if the change is in the favor of the insured. This subdivision (17) does not apply where the insured has failed to cooperate, given misleading information, or made material misrepresentations or omissions;   Preferences or Distinctions in Certain Insurance Transactions prohibited.  Making, offering to make, or permitting any preference or distinction in property, marine, casualty, or surety insurance as to form or policy, certificate, premium, rate, benefits, or conditions of insurance, based upon membership, nonmembership, or employment of any person or persons by or in any particular group, association, corporation, or organization, or making the preference or distinction available in any event based upon any fictitious grouping of persons;   The restrictions and limitations of this subdivision (18) do not extend or apply to life, health and accident, disability or workers' compensation insurance or to plans to provide legal services. Nothing in this subdivision (18) shall apply to any domestic company that confines its insurance business and operations to this state and to the provision of insurance solely for the benefit of its members, or members of its parent or sponsoring organization;   Notwithstanding any other provision of this title, dues paid before or after March 22, 1996, to a nonprofit association, membership in which entitles the members to apply for insurance from insurance companies described in subdivision (18)(B), shall not be considered as gross premium or consideration for insurance;   Notwithstanding any other provision of this title to the contrary, an insurer may make, offer to make, or permit a preference or distinction in property, marine, casualty or surety insurance as to form or policy, certificate, premium, rate, benefits or conditions of insurance based upon membership in an association of professionals with more than five thousand (5,000) dues-paying members in this state with members residing or practicing in at least eighty (80) counties within the state;     Disclosure of Nonpublic Personal Information.  Disclosing nonpublic personal information contrary to Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102 (15 U.S.C.  6801 et seq.), or violating a rule lawfully promulgated under this part;     The commissioner shall not impose civil penalties against, or revoke or suspend the license of, a person who violates subdivision (19)(A), unless the violator intentionally violated subdivision (19)(A) or committed violations of subdivision (19)(A) in sufficient number as to indicate a lack of the use of due diligence on the part of the violator in complying with subdivision (19)(A);   For purposes of subdivision (19)(A):        Nonpublic personal information means nonpublic personal information as defined in Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102; and   Person means an entity or individual holding or required by law to hold a certificate of authority or license, or the functional equivalent of a certificate of authority or license, under this title;    Any rules promulgated pursuant to this subdivision (19) shall be no more restrictive than Title V of the Gramm-Leach-Bliley Act of 1999, Pub. L. No. 106-102;   False, Misleading, Deceptive or Unfair Practices Concerning Sales to Members of the Armed Forces.  Notwithstanding any other provision in this title, the commissioner shall have the authority to adopt rules to protect service members of the United States armed forces from dishonest and predatory insurance sales practices by declaring certain identified practices to be false, misleading, deceptive or unfair; and   (A)  Unauthorized Use of Lender Information.  It is unlawful for any person to make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster or over the Internet or any radio or television, or in any other way, an advertisement, announcement or statement containing any assertion, representation, or statement with respect to the sale, distribution, offering for sale or advertising of any loan, refinance, insurance or any other product or service that is untrue, deceptive, or misleading.   It is unlawful for any person to commit any of the unlawful acts prohibited in  45-2-1709(a)(1)(D) or (E).   For purposes of this subdivision (21), lender means any bank, savings and loan association, savings bank, trust company, credit union, industrial loan and thrift company, mortgage company, mortgage broker, or any subsidiary or affiliate of a bank, savings and loan association, savings bank, trust company, credit union, industrial loan and thrift company, mortgage company, or mortgage broker.  
 Any of the following acts by an insurer or person constitutes an unfair claims practice:   Knowingly misrepresenting relevant facts or policy provisions relating to coverages at issue;   Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;   Failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims arising under its policies;   Except when the prompt and good faith payment of claims is governed by more specific standards, not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear;   Compelling insureds or beneficiaries to a life insurance contract to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them; provided, that equal consideration shall be given to the relationship between the amount claimed and the amounts ultimately recovered through litigation or other valid legal arguments;   Refusing to pay claims without conducting a reasonable investigation except when denied because of an electronic submission error by the claimant;   Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;   Attempting to settle or settling claims for less than the amount that a reasonable person would believe the insured or beneficiary was entitled by reference to written or printed advertising material accompanying or made part of an application; provided, that this subdivision (8) does not apply to settlement of, or attempts to settle, claims by third-party claimants;   Attempting to settle or settling claims on the basis of an application that was materially altered without notice to, or knowledge or consent of, the insured;   Making claims payments to an insured or beneficiary without indicating the coverage under which each payment is being made. Nothing in this subdivision (10) shall be construed to require specific coverage identification for payments made to meet urgent needs of an insured; provided, that the insured, at or before the final settlement of the claim, receives a written explanation indicating the coverage or coverages under which the payments are made;   Unreasonably delaying the investigation or payment of claims by requiring both a formal proof of loss form and subsequent verification that would result in duplication of information and verification appearing in the formal proof of loss form. Nothing contained in this subdivision (11) shall be construed as obligating any insurer to make a decision upon any claim without sufficient investigation and information to determine if the claim, or any part of the claim, is false, fraudulent, or for an excessive amount;   Failing, in the case of claims denials or offers of compromise settlement, to promptly provide a reasonable and accurate explanation of the basis for such actions. Nothing contained in this subdivision (12) shall be construed as obligating any insurer to make a decision upon any claim without sufficient investigation and information to determine if the claim, or any part of the claim, is false, fraudulent, or for an excessive amount. Further, this subdivision (12) shall not apply to denials of, or offers of compromise settlement of, third-party claims;   In response to a request for claims forms, failing to provide forms necessary to present claims within fifteen (15) calendar days of such a request with reasonable explanations regarding their use;   If the insurer owns a repairer or requires a repairer to be used, the insurer's failure to adopt and implement reasonable standards to assure that the repairs are performed in a workmanlike manner; or   Failing to make payment of workers' compensation benefits as such payment is required by the commissioner of labor and workforce development or by title 50, chapter 6.   
  No person or depository institution, or affiliate of a depository institution, shall require as a condition precedent to the lending of money or extension of credit, or any renewal thereof, that the person to whom the money or credit is extended or whose obligation a creditor is to acquire or finance, negotiate any policy or renewal of any policy through a particular insurer or group of insurers or agent or broker or group of agents or brokers. Further, no person or depository institution, or affiliate of a depository institution, shall reject an insurance policy solely because the policy has been issued or underwritten by a person who is not associated with the depository institution or affiliate when insurance is required in connection with a loan or extension of credit. However, nothing in this subsection (a) shall be construed as prohibiting engaging in an arrangement that would not violate  106 of the Bank Holding Company Act Amendments of 1972 (12 U.S.C.  1972), as interpreted by the board of governors of the federal reserve system, or  5(q) of the Home Owners' Loan Act (12 U.S.C.  1464(q)).   No person or depository institution, or affiliate of a depository institution, who lends money or extends credit shall:  As a condition for extending credit or offering any product or service that is equivalent to an extension of credit, require that a customer obtain insurance from a depository institution or an affiliate of a depository institution, or a particular insurer or producer; however, this subdivision (b)(1) does not prohibit a person or depository institution, or affiliate of a depository institution, from informing a customer or prospective customer that insurance is required in order to obtain a loan or credit, that loan or credit approval is contingent upon the procurement by the customer of acceptable insurance or that insurance is available from the person or depository institution or affiliate of a depository institution;   Unreasonably reject a policy furnished by the customer or borrower for the protection of the property securing the credit or lien. A rejection shall not be deemed unreasonable if it is based on reasonable standards, uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. The standards shall not discriminate against any particular type of insurer, nor shall the standards call for rejection of a policy because it contains coverage in addition to that required in the credit transaction;   Require that any customer, borrower, mortgagor, purchaser, insurer, broker or insurance producer pay a separate charge in connection with the handling of any policy required as security for a loan on real estate, or pay a separate charge to substitute the policy of one (1) insurer for that of another. This subdivision (b)(3) does not include the interest that may be charged on premium loans or premium advancements in accordance with the terms of the loan or credit document. Further, this subdivision (b)(3) does not apply to charges that would be required when the person or depository institution or affiliate of a depository institution is the licensed producer providing the insurance;   Require any procedures or conditions of duly licensed producers or insurers not customarily required of those producers or insurers affiliated or in any way connected with the person who lends money or extends credit;   Use an advertisement or other insurance promotional material that would cause a reasonable person to mistakenly believe that the federal government or the state is responsible for the insurance sales activity of, or stands behind the credit of, the person, depository institution or its affiliate;   Use an advertisement or other insurance promotional material that would cause a reasonable person to mistakenly believe that the federal government or the state guarantees any returns on insurance products or is a source of payment on any insurance obligation of or sold by the person, depository institution or its affiliate;   Act as a producer unless properly licensed in accordance with  56-6-103;   Pay or receive any commission, brokerage fee or other compensation as a producer, unless the person holds a valid producer's license for the applicable class of insurance. However, in addition to any other manner of compensation otherwise allowed by law, an unlicensed person may make a referral to a licensed producer; provided, that the person does not discuss specific insurance policy terms and conditions. Except as prohibited by federal law, the unlicensed person may be compensated for the referral; however, an unlicensed person who is neither employed by nor affiliated with the insurance producer may be compensated only if the compensation is a fixed dollar amount, not to exceed twenty-five dollars ($25.00) or such lesser amount as the commissioner may establish by rule, for each referral. An unlicensed person who is either employed by or affiliated with the insurance producer may be compensated only if the compensation is a fixed nominal dollar amount. Furthermore, any person who accepts deposits from the public in an area where such transactions are routinely conducted in the depository institution may receive for each customer referral no more than a one-time, nominal fee of a fixed dollar amount for each referral. In any event, the referral compensation shall not depend on whether the referred customer purchases an insurance product from the licensed producer;   Solicit or sell insurance, other than credit insurance or flood insurance, unless the solicitation or sale is completed through documents separate from any credit transactions;   Include the expense of insurance premiums, other than credit insurance premiums or flood insurance premiums, in the primary credit transaction without the express written consent of the customer;   Solicit or sell insurance unless its insurance sales activities are, to the extent practicable, physically separated from areas where retail deposits are routinely accepted by depository institutions;   Solicit or sell insurance unless it maintains separate and distinct books and records relating to the insurance transactions, including all files relating to and reflecting consumer complaints; or   Require, in connection with a loan or extension of credit secured by real property, that the debtor procure insurance for the protection of the property for an amount that exceeds the replacement cost of the structures existing on the secured property at the time of the loan or extension of credit or, in the case of a construction or improvement loan, insurance that exceeds the replacement value the structures are expected to have upon completion of the construction or improvements.     Every person or depository institution, or affiliate of a depository institution that lends money or extends credit and who solicits insurance primarily for personal, family or household purposes shall disclose to the customer in writing that the insurance related to the credit extension may be purchased from an insurer or producer of the customer's choice, subject only to the lender's right to reject a given insurer or agent as provided in subdivision (b)(2). Further, the disclosure shall inform the customer that the customer's choice of insurer or producer will not affect the credit decision or credit terms in any way, except that the depository institution may impose reasonable requirements concerning the creditworthiness of the insurer and the scope of coverage chosen as provided in subdivision (b)(2).    A depository institution that solicits, sells, advertises or offers insurance, and any person that solicits, sells, advertises or offers insurance on behalf of a depository institution or on the premises of a depository institution shall disclose to the customer in writing, where practicable and in a clear and conspicuous manner, prior to a sale, that the insurance:  Is not a deposit;   Is not insured by the federal deposit insurance corporation or any other federal government agency;   Is not guaranteed by the depository institution, its affiliate, if applicable, or any person that is soliciting, selling, advertising or offering insurance, if applicable; and   Where appropriate, involves investment risk, including the possible loss of value.     For purposes of the requirements of subdivision (d)(1), an affiliate of a depository institution is subject to these requirements only to the extent that it sells, solicits, advertises, or offers insurance products or annuities at an office of a depository institution or on behalf of a depository institution. These requirements apply only when an individual purchases, applies to purchase, or is solicited to purchase insurance products or annuities primarily for personal, family or household purposes and only to the extent that the disclosure would be accurate.   A depository institution that solicits, sells, advertises or offers insurance, and any person who solicits, sells, advertises or offers insurance on behalf of a depository institution or on the premises of a depository institution shall obtain written acknowledgement of the receipt of the disclosure from the customer at the time the customer receives the disclosure or at the time of the initial purchase of the insurance policy. If the solicitation is conducted by telephone, the person or depository institution shall obtain an oral acknowledgement of receipt of the disclosure, maintain sufficient documentation to show that the acknowledgement was given by the customer and make reasonable efforts to obtain a written acknowledgement from the customer. If a customer affirmatively consents to receiving the disclosures electronically and if the disclosures are provided in a format that the customer may retain or obtain later, the person or depository institution may provide the disclosure and obtain acknowledgement of the receipt of the disclosure from the customer using electronic media.   For the purposes of subdivision (d)(1), a person is selling, soliciting, advertising or offering insurance on behalf of a depository institution, whether at an office of the depository institution or another location, if at least one (1) of the following applies:  The person represents to the customer that the sale, solicitation, advertisement or offer of the insurance is by or on behalf of the depository institution;   The depository institution refers a customer to the person who sells insurance and the depository institution has a contractual arrangement to receive commissions or fees derived from the sale of insurance resulting from the referral; or   Documents evidencing the sale, solicitation, advertisement or offer of insurance identify or refer to the depository institution.       The commissioner shall have the power to examine and investigate those insurance activities of any person, depository institution, affiliate of a depository institution or insurer that the commissioner believes may be in violation of this section. The person, depository institution, affiliate of a depository institution or insurer shall make its insurance books and records available to the commissioner and the commissioner's staff for inspection upon reasonable notice.   Nothing in this section shall prevent a person or depository institution, or affiliate of a depository institution, who lends money or extends credit from placing insurance on real or personal property in the event the mortgagor, borrower or purchaser has failed to provide required insurance in accordance with the terms of the loan or credit document.   
  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.   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.    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.   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.      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.   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.     
  In addition to any other authority granted in this part, the commissioner shall have the authority to declare by rule certain acts to be unfair trade practices or unfair methods of competition or unfair or deceptive acts or practices in the business of insurance that are not specifically defined in this part. The commissioner may promulgate the rules by emergency rules upon making a finding that such is in the public interest.   The commissioner, at the rulemaking hearing, may administer oaths, and receive oral and documentary evidence. The commissioner shall have the power to subpoena witnesses, compel their attendance, and require the production of books, papers, records, correspondence or other documents the commissioner deems relevant to the inquiry; provided, however, that in the case of depository institutions, the commissioner shall have the power to require the production of books, papers, records, correspondence or other documents that the commissioner deems relevant to the inquiry only on the insurance activities of the depository institution. No person shall be compelled to provide a document or disclose information that is privileged under statutory or common law. The commissioner may and, upon the request of any party, shall cause to be made a stenographic record of all the evidence and all the proceedings at the hearing. In case of a refusal of any person to comply with any subpoena or to testify with respect to any matter concerning which that person may be lawfully interrogated, the chancery court of Davidson County or the county where the person resides, on application of the commissioner, may issue an order requiring the person to comply with the subpoena and to testify. Any failure to obey any order of the court may be punished by the court as contempt.   
 Whenever it appears to the commissioner that any person has violated or is about to violate this part or any rule promulgated under this part, the commissioner may, in the commissioner's discretion, bring an action in the chancery court of Davidson County to enjoin the violation and to enforce compliance with this part, any rule under this part or any order lawfully entered pursuant to this section. The court shall not require the commissioner to post a bond.  
 The commissioner is authorized, after notice and hearing, to promulgate reasonable rules and orders as are necessary or proper to carry out and effectuate this part. The rules shall be subject to review in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 The powers vested in the commissioner by this part shall be in addition to any other powers in this title to enforce any penalties, fines or forfeitures authorized by law with respect to the methods, acts and practices declared to be unfair or deceptive by this part.  
  An insurer issuing a group or individual benefit plan may offer a voluntary wellness or health improvement program that uses incentives or rewards, or any combination of incentives or rewards, to encourage or reward a plan member's participation in the program. Such incentives and rewards may include, but not be limited to, the following:  Merchandise;   Gift cards;   Debit cards;   Premium discounts or rebates;   Contributions towards a plan member's health savings account; or   Modifications to co-payment, deductible, or co-insurance amounts.     If an incentive or reward established pursuant to this section is disclosed in the insurer's policy or certificate, then giving, or offering to give, the incentive or reward to a plan member shall not constitute a violation of  56-8-104(8).   An insurer may require a plan member to provide verification to the insurer that the plan member has a medical condition that makes the plan member's participation in the program unreasonably difficult or medically inadvisable prior to establishing a reasonable alternative standard for obtaining an incentive or reward.   Nothing in this section shall prohibit an insurer from offering or giving an incentive or reward to a plan member to encourage or reward the member's participation in a voluntary wellness or health improvement program if additional incentives or rewards, or uses of incentives or rewards, are otherwise permitted by state or federal law.   
 Notwithstanding any other law, title 50 and this title shall provide the sole and exclusive statutory remedies and sanctions applicable to an insurer, person, or entity licensed, permitted, or authorized to do business under this title for alleged breach of, or for alleged unfair or deceptive acts or practices in connection with, a contract of insurance as such term is defined in  56-7-101(a). Nothing in this section shall be construed to eliminate or otherwise affect any:   Remedy, cause of action, right to relief or sanction available under common law;   Right to declaratory, injunctive or equitable relief, whether provided under title 29 or the Tennessee Rules of Civil Procedure; or   Statutory remedy, cause of action, right to relief or sanction referenced in title 50 or this title.   
 This part shall be known and may be cited as the Domestic Violence Victims Health Insurance Protection Act.  
 As used in this part, unless the context otherwise requires:   Abuse means the occurrence of one (1) or more of the following acts:  Attempting to cause or intentionally, knowingly or recklessly causing another person, including a minor child, bodily injury, physical harm, severe emotional distress, psychological trauma, rape, sexual assault or involuntary sexual intercourse;   Knowingly engaging in a course of conduct or repeatedly committing acts toward another person, including a minor child, including following the person or minor child without proper authority, under circumstances that place the person or minor child in reasonable fear of bodily injury or physical harm;   Subjecting another person, including a minor child, to false imprisonment; or   Attempting to cause or intentionally, knowingly, or recklessly causing damage to property so as to intimidate or attempt to control the behavior of another person, including a minor child;     Abuse-related medical condition means a medical condition sustained by a subject of abuse that arises in whole or part out of an act or pattern of abuse;   Abuse status means the fact or perception that a person is, has been, or may be a subject of abuse, regardless of whether the person has sustained abuse-related medical conditions or has incurred abuse-related claims;   Health benefit plan or plan means a policy, contract, certificate or agreement offered by a carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services. Health benefit plan includes accident only, credit health, dental, vision, medicare supplement, or long-term care coverage issued as a supplement to liability insurance, automobile medical payment insurance, short-term and catastrophic health insurance policies, and a policy that pays on a cost-incurred basis. Health benefit plan does not include workers' compensation or similar insurance;   Health carrier means an entity subject to the insurance laws and regulations of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to contract to provide, deliver, arrange for, pay for or reimburse any of the cost of health care services, including a sickness and accident insurance company, a health maintenance organization, a nonprofit hospital and health service corporation, or any other entity providing a plan of health insurance, health benefits or health services;   Insured means a party named on a policy, certificate or health benefit plan as the person with legal rights to the benefits provided by the policy, certificate or health benefit plan. For group insurance, insured includes a person who is a beneficiary covered by a group policy, certificate, or health benefit plan;   Policy means a contract of insurance, certificate, indemnity, suretyship, or annuity issued, proposed for issuance, or intended for issuance by an insurer, including endorsements or riders to an insurance policy or contract;   Subject of abuse means a person to whom a family member, or a current or former household member, intimate partner, or caretaker, or a perpetrator of sexual assault, a stalker or a sex offender has directed an act as defined in subdivision (1); who has current or prior injuries, illnesses or disorders that resulted from abuse; or who seeks, may have sought or had reason to seek medical or psychological treatment for abuse, or protection, court-ordered protection or shelter from abuse; and   Underwrite means to properly classify individuals who request insurance coverage and includes, but is not limited to, the acts of refusal to insure, refusal to continue to insure, limiting the amount, extent or kind of coverage, or charging a different rate for coverage.   
 No insurer or health carrier may engage in an unfairly discriminatory act or practice, as defined in  56-8-204, against a subject of abuse on the basis of that abuse status.  
  Any of the following acts are prohibited as unfairly discriminatory:  Denying, refusing to issue, renew or reissue, canceling or otherwise terminating a health benefit plan, or restricting or excluding health benefit plan coverage, or adding a premium differential to any health benefit plan on the basis of the applicant's or insured's abuse status;   Excluding or limiting coverage or denying a claim incurred by an insured as a result of abuse on the basis of the insured's abuse status;   Terminating group coverage for a subject of abuse on the basis of the insured's abuse status where coverage was originally issued in the name of the abuser and the abuser has divorced, separated from, or lost custody of the subject of abuse, or the abuser's coverage has terminated voluntarily or involuntarily. Nothing in this subdivision (3) prohibits the insurer or health carrier from requiring the subject of abuse to pay the full premium for the person's coverage under the health plan or from requiring the subject of abuse to reside or work within its service area. Nothing in this subdivision (3) gives a subject of abuse any greater rights than the subject would otherwise have had to continued coverage under Tennessee or federal law. The continuation coverage required by this section shall be satisfied by any COBRA coverage provided to a subject of abuse and is not intended to be in addition to any coverage provided under COBRA; or   Disclosing or transferring any information, by a person employed by or contracting with a health carrier, relating to an applicant's or insured's abuse status or abuse-related medical condition, or the applicant's or insured's status as a family member, employer or associate of, or in a relationship with a subject of abuse, except:  For purposes related to the provision of health care services;   For the purpose of administering claims, utilization review or case management; or   Where required by the commissioner or a court of competent jurisdiction.       Nothing in this section shall be construed to prohibit a health carrier from asking an applicant or insured about a medical condition, even if the condition is abuse-related, or using information thereby obtained for the purpose of acts or practices permitted by this part. A subject of abuse, at the subject's absolute discretion, may provide evidence of abuse to a health carrier for the limited purpose of facilitating treatment of an abuse-related condition or demonstrating that a medical condition is abuse-related, and nothing in this section shall be construed as authorizing the health carrier to disregard that information.   
 Underwriting in accordance with the standards set forth in this section shall be deemed not to be a violation of this part. Upon request of the commissioner, a health carrier or insurer of an individual or group policy that has taken an action that adversely affects a subject of abuse on the basis of an abuse-related medical condition must explain the reason for its action to the commissioner in writing and must be able to demonstrate that its action:   Does not have the purpose or effect of treating abuse status as a medical condition or underwriting criterion;   Is otherwise permissible by law and applies in the same manner and to the same extent to all applicants and insureds with a similar medical condition without regard to whether the condition or claim is abuse-related; and   Is based on a determination, made in conformance with actual or reasonably anticipated actuarial experience.   
 The commissioner shall conduct a reasonable investigation based on a written and signed complaint received by the commissioner and issue a prompt determination as to whether a violation of this part has occurred. If the commissioner finds from the investigation that a violation of this part may have occurred, the commissioner shall promptly begin proceedings to address the violation pursuant to  56-8-108 and 56-8-109.  
  This chapter shall be known and may be cited as the Insurers Rehabilitation and Liquidation Act.   This chapter shall not be interpreted to limit the powers granted the commissioner by other provisions of the law.   This chapter shall be liberally construed to effect the purpose stated in subsection (d).   The purpose of this chapter is the protection of the interests of insureds, claimants, creditors and the public generally, with minimum interference with the normal prerogatives of the owners and managers of insurers, through:  Early detection of any potentially dangerous condition in an insurer, and prompt application of appropriate corrective measures;   Improved methods for rehabilitating insurers, involving the cooperation and management expertise of the insurance industry;   Enhanced efficiency and economy of liquidation, through clarification of the law, to minimize legal uncertainty and litigation;   Equitable apportionment of any unavoidable loss;   Lessening the problems of interstate rehabilitation and liquidation by facilitating cooperation between states in the liquidation process, and by extending the scope of personal jurisdiction over debtors of the insurer outside this state;   Regulation of the insurance business by the impact of the law relating to delinquency procedures and substantive rules on the entire insurance business; and   Providing for a comprehensive scheme for the rehabilitation and liquidation of insurance companies and those subject to this chapter as part of the regulation of the business of insurance, insurance industry and insurers in this state. Proceedings in cases of insurer insolvency and delinquency are deemed an integral aspect of the business of insurance and are of vital public interest and concern.     
 The proceedings authorized by this chapter may be applied to:   All insurers who are doing, or have done, an insurance business in this state, and against whom claims arising from that business may exist now or in the future;   All insurers who purport to do an insurance business in this state;   All insurers who have insureds resident in this state;   All other persons organized or in the process of organizing with the intent to do an insurance business in this state;   All nonprofit service plans and all fraternal benefit societies and beneficial societies subject to  56-25-606;   All title insurance companies subject to chapter 35 of this title;   All prepaid health care delivery plans; and   All fidelity, bonding or surety companies under chapter 15 of this title, and all annuity companies who do business in this state.   
 As used in this chapter, unless the context otherwise requires:   Ancillary state means any state other than a domiciliary state;   Commissioner means the commissioner of commerce and insurance;   Creditor is a person having any claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, absolute, fixed or contingent;   Delinquency proceeding means any proceeding instituted against an insurer for the purpose of liquidating, rehabilitating, reorganizing or conserving the insurer, and any summary proceeding under  56-9-201;   Doing business includes any of the following acts, whether effected by mail or otherwise:  The issuance or delivery of contracts of insurance to persons resident in this state;   The solicitation of applications for the contracts, or other negotiations preliminary to the execution of the contracts;   The collection of premiums, membership fees, assessments or other consideration for the contracts;   The transaction of matters subsequent to execution of the contracts and arising out of them; or   Operating under a license or certificate of authority, as an insurer, issued by the department of commerce and insurance;     Domiciliary state means the state in which an insurer is incorporated or organized, or, in the case of an alien insurer, its state of entry;   Fair consideration is given for property or an obligation:  When in exchange for the property or obligation, as a fair equivalent therefor, and in good faith, property is conveyed or services are rendered or an obligation is incurred or an antecedent debt is satisfied; or   When the property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small as compared to the value of the property or obligation obtained;     Federal home loan bank means an institution chartered under the Federal Home Loan Bank Act (12 U.S.C.  1421, et seq.), as amended, or its successor statute;   Foreign country means any other jurisdiction not in any state;   Foreign guaranty association means any entities similar to a guaranty association now in existence in or hereafter created by the legislature of any other state;   Formal delinquency proceeding means any liquidation or rehabilitation proceeding;   General assets means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or classes of persons. As to specifically encumbered property, general assets includes all the property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and on deposit for the security or benefit of all policyholders or all policyholders and creditors, in more than a single state, shall be treated as general assets;   Guaranty association means the Tennessee insurance guaranty association created by chapter 12, part 1 of this title, the life and health insurance guaranty association created by chapter 12, part 2 of this title, and any other similar entity now or hereafter created by the general assembly of this state for the payment of claims of insolvent insurers;   Insolvency or insolvent means:  For an insurer issuing only assessable fire insurance policies:   The inability to pay any obligation within thirty (30) days after it becomes payable; or   If an assessment is made within thirty (30) days after the date, the inability to pay the obligation thirty (30) days following the date specified in the first assessment notice issued after the date of loss pursuant to  56-20-106;     For any other insurer, that it is unable to pay its obligations when they are due, or when its admitted assets do not exceed its liabilities, plus the greater of:   Any capital and surplus required by law for its organization; or   The total par or stated value of its authorized and issued capital stock;     As to any insurer licensed to do business in this state as of July 1, 1991, that does not meet the standard established under subdivision (14)(B), insolvency or insolvent means, for a period not to exceed three (3) years from July 1, 1991, that it is unable to pay its obligations when they are due or that its admitted assets do not exceed its liabilities, plus any required capital contribution ordered by the commissioner under the insurance law; and   For purposes of this subdivision (14), liabilities include, but are not limited to, reserves required by statute or by department general regulations or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto;     Insurer means any person who has done, purports to do, is doing or is licensed to do an insurance business, and is or has been subject to the authority of, or to liquidation, rehabilitation, reorganization, supervision, or conservation by, any insurance commissioner. For purposes of this chapter, any other persons included under  56-9-102 are deemed to be insurers;   Netting agreement means:  A contract or agreement, including terms and conditions incorporated by reference in it, including a master agreement, which master agreement, together with all schedules, confirmations, definitions, and addenda to it and transactions under any of them, shall be treated as one (1) netting agreement, that documents one (1) or more transactions between the parties to the agreement for or involving one (1) or more qualified financial contracts and that provides for the netting, liquidation, setoff, termination, acceleration, or close-out, under or in connection with one (1) or more qualified financial contracts or present or future payment or delivery obligations or payment or delivery entitlements under one (1) or more qualified financial contracts, including liquidation or close-out values relating to those obligations or entitlements, among the parties to the netting agreement;   Any master agreement or bridge agreement for one (1) or more master agreements described in subdivision (16)(A); or   Any security agreement or arrangement or other credit enhancement or guarantee or reimbursement obligation related to any contract or agreement described in subdivision (16)(A) or (16)(B); provided, that any contract or agreement described in subdivision (16)(A) or (16)(B) relating to agreements or transactions that are not qualified financial contracts shall be deemed to be a netting agreement only with respect to those agreements or transactions that are qualified financial contracts;     Preferred claim means any claim with respect to which the terms of this chapter accord priority of payment from the general assets of the insurer;    Qualified financial contract means any commodity contract, forward contract, repurchase agreement, securities contract, swap agreement, and any similar agreement that the commissioner determines to be a qualified financial contract for the purposes of this chapter; provided, that the insurer entered into such contract or agreement in accordance with:   Section 56-3-303(a)(21); and   The insurer's derivative instruments use plan that has been approved by the commissioner pursuant to  56-3-303(a)(21);     As used in subdivision (18)(A), commodity contract means:   A contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a board of trade or contract market under the Commodity Exchange Act (7 U.S.C.  1 et seq.), or a board of trade outside the United States;   An agreement that is subject to regulation under  23 of the Commodity Exchange Act (7 U.S.C.  23), as amended from time to time, and that is commonly known to the commodities trade as a margin account, margin contract, leverage account, or leverage contract;   An agreement or transaction that is subject to regulation under  6c(b) of the Commodity Exchange Act (7 U.S.C.  6c(b)), as amended from time to time, and that is commonly known to the commodities trade as a commodity option;   Any combination of the agreements or transactions referred to in this subdivision (18)(B); or   Any option to enter into an agreement or transaction referred to in this subdivision (18)(B);     As used in subdivision (18)(A), forward contract, repurchase agreement, securities contract, and swap agreement have the meanings set forth in the Federal Deposit Insurance Act (12 U.S.C.  1821(e)(8)(D)), as amended from time to time;     Receiver means receiver, liquidator, rehabilitator or conservator as the context requires;   Reciprocal state means any state other than this state in which in substance and effect  56-9-307(a), 56-9-404, 56-9-405 and 56-9-407  56-9-409 are in force, and in which provisions are in force requiring that the commissioner or equivalent official be the receiver of a delinquent insurer, and in which some provision exists for the avoidance of fraudulent conveyances and preferential transfers;    Secured claim means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claims or claims against general assets.   Secured claim also includes claims that have become liens upon specific assets by reason of judicial process;     Special deposit claim means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes of persons, but not including any claim secured by general assets;   State means any state, district or territory of the United States and the Panama Canal Zone; and   Transfer includes the sale and every other and different mode, direct or indirect, of disposing of or of parting with property or with an interest therein, or with the possession thereof or of fixing a lien upon property or upon an interest therein, absolutely or conditionally, voluntarily, by or without judicial proceedings. The retention of a security title to property delivered to a debtor shall be deemed a transfer suffered by the debtor.   
  No delinquency proceeding shall be commenced under this chapter by anyone other than the commissioner and no court has jurisdiction to entertain, hear or determine any proceeding commenced by any other person.   No court of this state has jurisdiction to entertain, hear or determine any complaint praying for the dissolution, liquidation, rehabilitation, sequestration, conservation or receivership of any insurer, or praying for an injunction or restraining order or other relief preliminary to, incidental to or relating to the proceedings other than in accordance with this chapter.   In addition to other grounds for jurisdiction provided by the law of this state, a court of this state having jurisdiction of the subject matter has jurisdiction over a person served pursuant to the Tennessee Rules of Civil Procedure or other applicable law in an action brought by the receiver of a domestic insurer or an alien insurer domiciled in this state if:  The person served is an agent, broker or other person who has at any time written policies of insurance for or has acted in any manner whatsoever on behalf of an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer;   The person served is a reinsurer who has at any time entered into a contract of reinsurance with an insurer against which a delinquency proceeding has been instituted, or is an agent or broker of or for the reinsurer, in any action on or incident to the reinsurance contract;   The person served is or has been an officer, director, manager, trustee, organizer, promoter or other person in a position of comparable authority or influence over an insurer against which a delinquency proceeding has been instituted, in any action resulting from or incident to such a relationship with the insurer;   The person served is, or was at the time of the institution of the delinquency proceeding against the insurer, holding assets in which the receiver claims an interest on behalf of the insurer, in any action concerning the assets; or   The person served is obligated to the insurer in any way whatsoever, in any action on, or incident to, the obligation.     If the court on motion of any party finds that any action should as a matter of substantial justice be tried in a forum outside this state, the court may enter an appropriate order to stay further proceedings on the action in this state.   All actions authorized in this section shall be brought in the chancery court of Davidson County.   
  Any receiver appointed in a proceeding under this chapter may at any time apply for, and any court of general jurisdiction may grant, the restraining orders, preliminary and permanent injunctions, and other orders as may be deemed necessary and proper to prevent:  The transaction of further business;   The transfer of property;   Interference with the receiver or with a proceeding under this chapter;   Waste of the insurer's assets;   Dissipation and transfer of bank accounts;   The institution or further prosecution of any actions or proceedings;   The obtaining of preferences, judgments, attachments, garnishments or liens against the insurer, its assets or its policyholders;   The levying of execution against the insurer, its assets or its policyholders;   The making of any sale or deed for nonpayment of taxes or assessments that would lessen the value of the assets of the insurer;   The withholding from the receiver of books, accounts, documents or other records relating to the business of the insurer; or   Any other threatened or contemplated action that might lessen the value of the insurer's assets or prejudice the rights of policyholders, creditors or shareholders, or the administration of any proceeding under this chapter.     The receiver may apply to any court outside of this state for the relief described in subsection (a).   Notwithstanding subsections (a) and (b) and any other provision of this title, a federal home loan bank shall not be stayed, enjoined, or prohibited from exercising or enforcing any right or cause of action regarding collateral pledged under a security agreement or under any pledge agreement, security agreement, collateral agreement, or other similar arrangement or credit enhancement relating to a security agreement to which the federal home loan bank is a party.   
   Any officer, manager, director, trustee, owner, employee or agent of any insurer, or any other persons with authority over, or in charge of, any segment of the insurer's affairs, shall cooperate with the commissioner in any proceeding under this chapter or any investigation preliminary to the proceeding.   As used in this section:  Person includes any person who exercises control directly or indirectly over activities of the insurer through any holding company or other affiliate of the insurer; and   To cooperate includes, but is not limited to, the following:   To reply promptly in writing to any inquiry from the commissioner requesting such a reply; and   To make available to the commissioner any books, accounts, documents, or other records or information or property of, or pertaining to, the insurer and in the person's possession, custody or control.         No person shall obstruct or interfere with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto.   This section shall not be construed to abridge otherwise existing legal rights, including the right to resist a petition for liquidation or other delinquency proceedings, or other orders.   Any person included within subsection (a) who willfully and wrongfully obstructs or interferes with the commissioner in the conduct of any delinquency proceeding or any investigation preliminary or incidental thereto, or who violates any order the commissioner issued validly under this chapter may:  Be sentenced by a court of competent jurisdiction to pay a fine not exceeding ten thousand dollars ($10,000) or be punished for a Class E felony, or both; or   After a hearing, be subject to the imposition by the commissioner of a civil penalty not to exceed ten thousand dollars ($10,000) and shall be subject further to the revocation or suspension of any insurance licenses issued by the commissioner.     
 Every proceeding heretofore commenced under the laws in effect before July 1, 1991, shall be deemed to have commenced under this chapter for the purpose of conducting the proceeding henceforth, except that, in the discretion of the commissioner, the proceeding may be continued, in whole or in part, as it would have been continued had this chapter not been enacted.  
 No insurer that is subject to any delinquency proceedings, whether formal or informal, administrative or judicial, shall:   Be released from the proceeding, unless the proceeding is converted into a judicial rehabilitation or liquidation proceeding;   Be permitted to solicit or accept new business or request or accept the restoration of any suspended or revoked license or certificate of authority;   Be returned to the control of its shareholders or private management; or   Have any of its assets returned to the control of its shareholders or private management until all payments of, or on account of, the insurer's contractual obligations by all guaranty associations, together with all expenses and interest on all the payments and expenses, have been repaid to the guaranty associations or a plan of repayment by the insurer has been approved by the guaranty association.   
  The receivership court shall receive as self-authenticated any of the following when offered by the commissioner:  Certified copies of the financial statements made by the insurer; and   Certified copies of examination reports of the insurer made by or on behalf of the commissioner.     The receiver has the authority to certify to the correctness of any paper, document or record of the office of the receiver and to make certificates of the receiver certifying any fact contained in the papers, documents or records of the office of the receiver; and the same shall be received in evidence in all cases in which the original would be evidence.   At any receivership hearing or proceeding, the verified petition and exhibits filed therewith shall be received as prima facie evidence of the facts therein contained.   The appointment of the commissioner as receiver shall in no way operate to bring records of a delinquent insurer under  10-7-503. If a third party successfully pursues a records request in the receivership court, the receiver shall be reimbursed for the reasonable cost of producing the records.   
  The commissioner may file in the chancery court of Davidson County a petition alleging, with respect to a domestic insurer:  That there exists any grounds that would justify a court order for a formal delinquency proceeding against an insurer under this part;   That the interests of policyholders, creditors or the public will be endangered by delay; and   The contents of an order deemed necessary by the commissioner.     Upon a filing under subsection (a), the court may issue forthwith, ex parte and without a hearing, the requested order, which shall direct the commissioner to take possession and control of all or a part of the property, books, accounts, documents and other records of an insurer, and of the premises occupied by it for transaction of its business; and, until further order of the court, enjoin the insurer and its officers, managers, agents and employees from disposition of its property and from the transaction of its business except with the written consent of the commissioner.   The court shall specify in the order what its duration shall be, which shall be the time as the court deems necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold hearings as it deems desirable after notice as it deems appropriate, and may extend, shorten or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal proceeding under this chapter after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this chapter shall ipso facto vacate the seizure order.   Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer.   An insurer subject to an ex parte order under this section may petition the court at any time after the issuance of the order for a hearing and review of the order. The court shall hold such a hearing and review not more than fifteen (15) days after the request. A hearing under this subsection (e) may be held privately in chambers, and it shall be so held if the insurer proceeded against so requests.   If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given shall not stay the effect of any order previously issued by the court.   
  In all proceedings and judicial reviews under  56-9-201, all records of the insurer, other documents, and all insurance department files and court records and papers, so far as they pertain to, or are a part of, the record of the proceedings, shall be and remain confidential except as is necessary to obtain compliance therewith, unless and until the chancery court of Davidson County, after hearing arguments from the parties in chambers, shall order otherwise, or unless the insurer requests that the matter be made public. Until the court order, all papers filed with the clerk of the chancery court of Davidson County shall be held by the clerk in a confidential file.   Subsection (a) shall not be applicable in any proceeding where the insurer on the date of the filing of the proceeding had derived fifty-one percent (51%) or more of its revenue for the past twelve (12) months from a contract or contracts with a governmental entity to provide health care services to enrollees in a publicly funded medical assistance program pursuant to title 71. In these cases, the records of the insurer, other documents, and all insurance department files and court records and papers, so far as they pertain to, or are a part of, the record of the proceeding and that reflect the financial solvency of the insurer, shall be open to public inspection under the Tennessee Public Records Act, compiled in title 10, chapter 7, unless otherwise required to be maintained as confidential under federal or state law. An insurer within fifteen (15) days from the date of seizure may apply to the court for a stay of application of this subsection (b), or for a protective order for particularized information that is proprietary in nature, the disclosure of which would be injurious to the rehabilitation of the insurer. This subsection (b) shall be stayed from the date of seizure until a court of competent jurisdiction rules on the application for a stay or a protective order.   
 The commissioner may apply by petition to the chancery court of Davidson County for an order authorizing the commissioner to rehabilitate a domestic insurer or an alien insurer domiciled in this state on any one (1) or more of the following grounds:   The insurer is in such condition that the further transaction of business would be hazardous financially to its policyholders, creditors or the public;   There is reasonable cause to believe that there has been embezzlement from the insurer, wrongful sequestration or diversion of the insurer's assets, forgery or fraud affecting the insurer, or other illegal conduct in, by, or with respect to the insurer that, if established, would endanger assets in an amount threatening the solvency of the insurer;   The insurer has failed to remove any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, employee, or other person, if the person has been found after notice and hearing by the commissioner to be dishonest or untrustworthy in a way affecting the insurer's business;   Control of the insurer, whether by stock ownership or otherwise, and whether direct or indirect, is in a person or persons found after notice and hearing to be untrustworthy;   Any person who in fact has executive authority in the insurer, whether an officer, manager, general agent, director or trustee, employee, or other person, has refused to be examined under oath by the commissioner concerning the insurer's affairs, whether in this state or elsewhere, and after reasonable notice of the fact, the insurer has failed promptly and effectively to terminate the employment and status of the person and all the person's influence on management;   After demand by the commissioner in accordance with this chapter, the insurer has failed to promptly make available for examination any of its own property, books, accounts, documents, or other records, or those of any subsidiary or related company within the control of the insurer, or those of any person having executive authority in the insurer so far as they pertain to the insurer;   Without first obtaining the written consent of the commissioner, the insurer has transferred, or attempted to transfer, in any manner, or contrary to chapter 11 of this title, substantially its entire property or business, or has entered into any transaction, the effect of which is to merge, consolidate or reinsure substantially its entire property or business in or with the property or business of any other person;   The insurer or its property has been or is the subject of an application for the appointment of a receiver, trustee, custodian, conservator or sequestrator or similar fiduciary of the insurer or its property otherwise than as authorized under the insurance laws of this state, and such appointment has been made or is imminent, and the appointment might oust the courts of this state of jurisdiction or might prejudice orderly delinquency proceedings under this chapter;   Within the previous four (4) years, the insurer has willfully violated its charter or articles of incorporation, its bylaws, any insurance law of this state, or any valid order of the commissioner;   The insurer has failed to pay within sixty (60) days after due date any obligation to any state or any subdivision of a state or any judgment entered in any state, if the court in which the judgment was entered had jurisdiction over the subject matter, except that the nonpayment shall not be a ground until sixty (60) days after any good faith effort by the insurer to contest the obligation has been terminated, whether it is before the commissioner or in the courts, or the insurer has systematically attempted to compromise or renegotiate previously agreed settlements with its creditors on the ground that it is financially unable to pay its obligations in full;   The insurer has failed to file its annual report or other financial report required by statute within the time allowed by law and, after written demand by the commissioner, has failed to give an adequate explanation immediately; or   The board of directors, or the holders of a majority of the shares entitled to vote, or a majority of those individuals entitled to the control of those entities specified in  56-9-102, request or consent to rehabilitation under this chapter.   
   An order to rehabilitate the business of a domestic insurer, or an alien insurer domiciled in this state, shall appoint the commissioner and the commissioner's successors in office the rehabilitator, and shall direct the rehabilitator immediately to take possession of the assets of the insurer and to administer them under the general supervision of the court.   The filing or recording of the order with the clerk of the chancery court of Davidson County or recorder of deeds of the county in which the principal business of the company is conducted, or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale, or other evidence of title duly filed or recorded with that recorder of deeds would have imparted.   The order to rehabilitate the insurer shall by operation of law vest title to all assets of the insurer in the rehabilitator.     Any order issued under this section shall require accountings to the court by the rehabilitator. Accountings shall be at intervals that the court specifies in its order, but no less frequently than semi-annually. Each accounting shall include a report concerning the rehabilitator's opinion as to the likelihood that a plan under  56-9-303(e) shall be prepared by the rehabilitator and the timetable for doing so.   Entry of an order of rehabilitation shall not constitute an anticipatory breach of any contracts of the insurer nor shall it be grounds for retroactive revocation or retroactive cancellation of any contracts of the insurer, unless the revocation or cancellation is done by the rehabilitator pursuant to  56-9-303.   
  The commissioner as rehabilitator may appoint one (1) or more special deputies, who have all the powers and responsibilities of the rehabilitator granted under this section, and the commissioner may employ such counsel, clerks and assistants as deemed necessary. The compensation of the special deputy, counsel, clerks and assistants, and all expenses of taking possession of the insurer and of conducting the proceedings, shall be fixed by the commissioner, with the approval of the court, and shall be paid out of the funds or assets of the insurer. The persons appointed under this section shall serve at the pleasure of the commissioner. The commissioner, as rehabilitator, may, with the approval of the court, appoint an advisory committee of policyholders, claimants, or other creditors, including guaranty associations, should such a committee be deemed necessary. The committee shall serve at the pleasure of the commissioner and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature shall be appointed by the commissioner or the court in rehabilitation proceedings conducted under this chapter.   In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the commissioner may advance the costs so incurred out of any appropriation for the maintenance of the department. Any amounts so advanced for expenses of administration shall be repaid to the commissioner for the use of the department out of the first available moneys of the insurer.   The rehabilitator may take any action the rehabilitator deems necessary or appropriate to reform and revitalize the insurer. The rehabilitator has all the powers of the directors, officers, and managers, whose authority shall be suspended, except as they are redelegated by the rehabilitator. The rehabilitator has full power to direct and manage, to hire and discharge employees subject to any contract rights they may have, and to deal with the property and business of the insurer.   If it appears to the rehabilitator that there has been criminal or tortious conduct, or breach of any contractual or fiduciary obligation detrimental to the insurer by any officer, manager, agent, broker, employee or other person, the rehabilitator may pursue all appropriate legal remedies on behalf of the insurer.   If the rehabilitator determines that reorganization, consolidation, conversion, reinsurance, merger or other transformation of the insurer is appropriate, the rehabilitator shall prepare a plan to effect the changes. Upon application of the rehabilitator for approval of the plan, and after the notice and hearings as the court may prescribe, the court may either approve or disapprove the plan proposed, or may modify it and approve it as modified. Any plan approved under this section shall be, in the judgment of the court, fair and equitable to all parties concerned. If the plan is approved, the rehabilitator shall carry out the plan. In the case of a life insurer, the plan proposed may include the imposition of liens upon the policies of the company, if all rights of shareholders are first relinquished. A plan for a life insurer may also propose imposition of a moratorium upon loan and cash surrender rights under policies, for such period and to such an extent as may be necessary.   The rehabilitator has the power under  56-9-315 and 56-9-316 to avoid fraudulent transfers.   
  Any court in this state before which any action or proceeding in which the insurer is a party, or is obligated to defend a party, is pending when a rehabilitation order against the insurer is entered shall stay the action or proceeding for ninety (90) days and any additional time as is necessary for the rehabilitator to obtain proper representation and prepare for further proceedings. The rehabilitator shall take such action respecting the pending litigation as the rehabilitator deems necessary in the interests of justice and for the protection of creditors, policyholders, and the public. The rehabilitator shall immediately consider all litigation pending outside this state and shall petition the courts having jurisdiction over that litigation for stays whenever necessary to protect the estate of the insurer.   No statute of limitations or defense of laches shall run with respect to any action by or against an insurer between the filing of a petition for appointment of a rehabilitator for that insurer and the order granting or denying that petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least sixty (60) days after the order of rehabilitation is entered or the petition is denied. The rehabilitator may, upon an order for rehabilitation, within one (1) year or such other longer time as applicable law may permit, institute an action or proceeding on behalf of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which the order is entered.   Any guaranty association or foreign guaranty association covering life or health insurance or annuities has standing to appear in any court proceeding concerning the rehabilitation of a life or health insurer if the association is or may become liable under this chapter as a result of the rehabilitation.   Notwithstanding subsections (a) and (b) and any other provision of this title, a federal home loan bank shall not be stayed, enjoined, or prohibited from exercising or enforcing any right or cause of action regarding collateral pledged under a security agreement or under any pledge agreement, security agreement, collateral agreement, or other similar arrangement or credit enhancement relating to a security agreement to which the federal home loan bank is a party.   
  Whenever the commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders or the public, or would be futile, the commissioner may petition the chancery court of Davidson County for an order of liquidation. A petition under this subsection (a) shall have the same effect as a petition under  56-9-306. The chancery court of Davidson County shall permit the directors of the insurer to take actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer of the costs and other expenses of defense as justice may require.   The protection of the interests of insureds, claimants and the public requires the timely performance of all insurance policy obligations. If the payment of policy obligations is suspended in substantial part for a period of six (6) months at any time after the appointment of the rehabilitator, and the rehabilitator has not filed an application for approval of a plan under  56-9-303(e), the rehabilitator shall petition the court for an order of liquidation on grounds of insolvency.   The rehabilitator may at any time petition the chancery court of Davidson County for an order terminating rehabilitation of an insurer. The court shall also permit the directors of the insurer to petition the court for an order terminating rehabilitation of the insurer and may order payment from the estate of the insurer of such costs and other expenses of the petition as justice may require. If the chancery court of Davidson County finds that rehabilitation has been accomplished and that grounds for rehabilitation under  56-9-301 no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The chancery court of Davidson County may also make that finding and issue that order at any time upon its own motion.   
 The commissioner may petition the chancery court of Davidson County for an order directing the commissioner to liquidate a domestic insurer or an alien insurer domiciled in this state on the basis:   Of any ground for an order of rehabilitation as specified in  56-9-301, whether or not there has been a prior order directing the rehabilitation of the insurer;   That the insurer is insolvent; or   That the insurer is in such condition that the further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors or the public.   
  An order to liquidate the business of a domestic insurer shall appoint the commissioner and the commissioner's successors in office as liquidator and shall direct the liquidator immediately to take possession of the assets of the insurer and to administer them under the general supervision of the court. The liquidator shall be vested by operation of law with the title to all of the property, contracts and rights of action, and all of the books and records of the insurer ordered liquidated, wherever located, as of the entry of the final order of liquidation. The filing or recording of the order with the clerk of the chancery court of Davidson County and the recorder of deeds of the county in which its principal office or place of business is located, or, in the case of real estate, with the recorder of deeds of the county where the property is located, shall impart the same notice as a deed, bill of sale or other evidence of title duly filed or recorded with that recorder of deeds would have imparted.   Upon issuance of the order, the rights and liabilities of any such insurer and of its creditors, policyholders, shareholders, members and all other persons interested in its estate shall become fixed as of the date of entry of the order of liquidation, except as provided in  56-9-308 and 56-9-326.   An order to liquidate the business of an alien insurer domiciled in this state shall be in the same terms and have the same legal effect as an order to liquidate a domestic insurer, except that the assets and the business in the United States shall be the only assets and business included in the order.   At the time of petitioning for an order of liquidation, or at any time thereafter, the commissioner, after making appropriate findings of an insurer's insolvency, may petition the court for a judicial declaration of the insolvency. After providing notice and hearing as it deems proper, the court may make the declaration.   Any order issued under this section shall require financial reports to the court by the liquidator. Financial reports shall include, at a minimum, the assets and liabilities of the insurer and all funds received or disbursed by the liquidator during the current period. Financial reports shall be filed within one (1) year of the liquidation order and at least annually thereafter.    Within five (5) days after the initiation of an appeal of an order of liquidation, which order has not been stayed, the commissioner shall present for the court's approval a plan for the continued performance of the defendant company's policy claims obligations, including the duty to defend insureds under liability insurance policies, during the pendency of an appeal. The plan shall provide for the continued performance and payment of policy claims obligations in the normal course of events, notwithstanding the grounds alleged in support of the order of liquidation including the ground of insolvency. In the event the defendant company's financial condition will not, in the judgment of the commissioner, support the full performance of all policy claims obligations during the appeal pendency period, the plan may prefer the claims of certain policyholders and claimants over creditors and interested parties as well as other policyholders and claimants, as the commissioner finds to be fair and equitable, considering the relative circumstances of the policyholders and claimants. The court shall examine the plan submitted by the commissioner and if it finds the plan to be in the best interests of the parties, the court shall approve the plan. No action shall lie against the commissioner or any of the commissioner's deputies, agents, clerks, assistants or attorneys by any party based on preference in an appeal pendency plan approved by the court.   The appeal pendency plan shall not supersede or affect the obligations of any insurance guaranty association.    Any such plans shall provide for equitable adjustments to be made by the liquidator to any distributions of assets to guaranty associations, in the event that the liquidator pays claims from assets of the estate, which would otherwise be the obligations of any particular guaranty association but for the appeal of the order of liquidation, such that all guaranty associations equally benefit on a pro rata basis from the assets of the estate.   In the event an order of liquidation is set aside upon any appeal, the company shall not be released from delinquency proceedings unless and until all funds advanced by any guaranty association, including reasonable administrative expenses in connection therewith relating to obligations of the company, are repaid in full, together with interest at the judgment rate of interest or unless an arrangement for repayment has been made with the consent of all applicable guaranty associations.       
  All policies, including bonds and other noncancellable business, other than life or health insurance or annuities, in effect at the time of issuance of an order of liquidation, shall continue in force only for the lesser of:  A period of thirty (30) days from the date of entry of the liquidation orders;   The expiration of the policy coverage;   The date when the insured has replaced the insurance coverage with equivalent insurance in another insurer or otherwise terminated the policy;   The date when the liquidator has effected a transfer of the policy obligation pursuant to  56-9-310(a)(10); or   The date proposed by the liquidator and approved by the court to cancel coverage.     An order of liquidation under  56-9-307 shall terminate coverage at the time specified in subsection (a) for purposes of any other statute.   Policies of life or health insurance or annuities shall continue in force for the period and under the terms that are provided for by any applicable guaranty association or foreign guaranty association.   Policies of life or health insurance or annuities or any period of coverage of the policies not covered by a guaranty association or foreign guaranty association shall terminate under subsections (a) and (b).   
 The commissioner may petition for an order dissolving the corporate existence of a domestic insurer or the United States branch of an alien insurer domiciled in this state at the time the commissioner applies for a liquidation order. The court shall order dissolution of the corporation upon petition by the commissioner upon or after the granting of a liquidation order. If the dissolution has not previously been ordered, it shall be effected by operation of law upon the discharge of the liquidator if the insurer is insolvent but may be ordered by the court upon the discharge of the liquidator if the insurer is under a liquidation order for some other reason.  
  The liquidator has the power to:  Appoint a special deputy or deputies to act for the liquidator under this chapter, and determine the deputy's reasonable compensation. The special deputy has powers of the liquidator granted by this section. The special deputy shall serve at the pleasure of the liquidator;   Employ employees and agents, legal counsel, actuaries, accountants, appraisers, consultants and other personnel the liquidator may deem necessary to assist in the liquidation;   Appoint, with the approval of the court, an advisory committee of policyholders, claimants or other creditors, including guaranty associations, should such a committee be deemed necessary. The committee shall serve at the pleasure of the commissioner and shall serve without compensation other than reimbursement for reasonable travel and per diem living expenses. No other committee of any nature shall be appointed by the commissioner or the court in liquidation proceedings conducted under this chapter;   Fix the reasonable compensation of employees and agents, legal counsel, actuaries, accountants, appraisers and consultants with the approval of the court;   Pay reasonable compensation to persons appointed and defray from the funds or assets of the insurer all expenses of taking possession of, conserving, conducting, liquidating, disposing of, or otherwise dealing with the business and property of the insurer. In the event that the property of the insurer does not contain sufficient cash or liquid assets to defray the costs incurred, the commissioner may advance the costs so incurred out of any appropriation for the maintenance of the department. Any amounts so advanced for expenses of administration shall be repaid to the commissioner for the use of the department out of the first available moneys of the insurer;   Hold hearings, subpoena witnesses to compel their attendance, administer oaths, examine any person under oath, and compel any person to subscribe to the person's testimony after it has been correctly reduced to writing, and, in connection therewith, require the production of any books, papers, records or other documents that the liquidator deems relevant to the inquiry;   Audit the books and records of all agents of the insurer insofar as those records relate to the business activities of the insurer;   Collect all debts and moneys due and claims belonging to the insurer, wherever located, and for this purpose to:  Institute timely action in other jurisdictions, in order to forestall garnishment and attachment proceedings against the debts;   Do such other acts as are necessary or expedient to collect, conserve or protect its assets or property, including the power to sell, compound, compromise or assign debts for purposes of collection upon the terms and conditions as the liquidator deems best; and   Pursue any creditor's remedies available to enforce the liquidator's claims;     Conduct public and private sales of the property of the insurer;   Use assets of the estate of an insurer under a liquidation order to transfer policy obligations to a solvent assuming insurer, if the transfer can be arranged without prejudice to applicable priorities under  56-9-330;   Acquire, hypothecate, encumber, lease, improve, sell, transfer, abandon or otherwise dispose of or deal with any property of the insurer at its market value or upon the terms and conditions as are fair and reasonable. The liquidator also has the power to execute, acknowledge and deliver any and all deeds, assignments, releases and other instruments necessary or proper to effectuate any sale of property or other transaction in connection with the liquidation;   Borrow money on the security of the insurer's assets or without security and execute and deliver all documents necessary to that transaction for the purpose of facilitating the liquidation. Any such funds borrowed may be repaid as an administrative expense and have priority over any other claims in Class 1 under the priority of distribution;   Enter into any contracts necessary to carry out the order to liquidate, and affirm or disavow any contracts to which the insurer is a party. However, the liquidator shall not disavow, reject, or repudiate a federal home loan bank security agreement or any pledge agreement, security agreement, collateral agreement, guarantee agreement, or other similar arrangement or credit enhancement relating to a security agreement to which a federal home loan bank is a party;   Continue to prosecute and institute in the name of the insurer, or in the liquidator's own name, any and all suits and other legal proceedings, in this state or elsewhere, and abandon the prosecution of claims the liquidator deems unprofitable to pursue further. If the insurer is dissolved under  56-9-309, the liquidator shall have the power to apply to any court in this state or elsewhere for leave to substitute the liquidator for the insurer as plaintiff;   Prosecute any action that may exist in behalf of the creditors, members, policyholders or shareholders of the insurer against any officer of the insurer, or any other person;   Remove any or all records and property of the insurer to the offices of the commissioner or to any other place that may be convenient for the purposes of efficient and orderly execution of the liquidation. Guaranty associations and foreign guaranty associations shall have such reasonable access to the records of the insurer as is necessary for them to carry out their statutory obligations;   Deposit in one (1) or more banks in this state the sums required for meeting current administration expenses and dividend distributions;   Invest all sums not currently needed, unless the court orders otherwise;   File any necessary documents for record in the office of any recorder of deeds or record office in this state or elsewhere where property of the insurer is located;   Assert all defenses available to the insurer as against third persons, including statutes of limitation, statutes of frauds, and the defense of usury. A waiver of any defense by the insurer after a petition in liquidation has been filed shall not bind the liquidator. Whenever a guaranty association or foreign guaranty association has an obligation to defend any suit, the liquidator shall give precedence to the obligation and may defend only in the absence of a defense by the guaranty associations;   Exercise and enforce all the rights, remedies and powers of any creditor, shareholder, policyholder or member, including any power to avoid any transfer or lien that may be given by the general law and that is not included under  56-9-315  56-9-317;   Intervene in any proceeding wherever instituted that might lead to the appointment of a receiver or trustee, and act as the receiver or trustee whenever the appointment is offered;   Enter into agreements with any receiver or commissioner of any other state relating to the rehabilitation, liquidation, conservation or dissolution of an insurer doing business in both states; and   Exercise all powers now held or hereafter conferred upon receivers by the laws of this state not inconsistent with this chapter.     The enumeration in this section of the powers and authority of the liquidator shall not be construed as a limitation upon the liquidator, nor shall it exclude in any manner the liquidator's right to do other acts not herein specifically enumerated or otherwise provided for, that may be necessary or appropriate for the accomplishment of or in aid of the purpose of liquidation.   Notwithstanding the powers of the liquidator as stated in subsections (a) and (b), the liquidator has no obligation to defend claims or to continue to defend claims subsequent to the entry of a liquidation order.   
  Unless the court otherwise directs, the liquidator shall give or cause to be given notice of the liquidation order as soon as possible by:  First class mail and either telegram or telephone to the insurance commissioner of each jurisdiction in which the insurer is doing business;   First class mail to any guaranty association or foreign guaranty association that is or may become obligated as a result of the liquidation;   First class mail to all insurance agents of the insurer;   First class mail to all persons known or reasonably expected to have claims against the insurer, including all policyholders, at their last known address as indicated by the records of the insurer; and   Publication in a newspaper of general circulation in the county in which the insurer has its principal place of business and in any other locations the liquidator deems appropriate.     Except as otherwise established by the liquidator with approval of the court, notice to potential claimants under subsection (a) shall require claimants to file with the liquidator their claims, together with proper proofs under  56-9-324, on or before a date the liquidator shall specify in the notice. The liquidator need not require persons claiming cash surrender values or other investment values in life insurance and annuities to file a claim. All claimants shall have a duty to keep the liquidator informed of any changes of address.    Notice under subsection (a) to agents of the insurer and to potential claimants who are policyholders shall include, where applicable, notice that coverage by state guaranty associations may be available for all or part of policy benefits in accordance with applicable state guaranty laws.   The liquidator shall promptly provide to the guaranty associations any information concerning the identities and addresses of the policyholders and their policy coverages as may be within the liquidator's possession or control, and otherwise cooperate with guaranty associations to assist them in providing to the policyholders timely notice of the guaranty associations' coverage of policy benefits, including, as applicable, coverage of claims and continuation or termination of coverages.     If notice is given in accordance with this section, the distribution of assets of the insurer under this chapter shall be conclusive with respect to all claimants, whether or not they received notice.   
   Every person who receives notice in the form prescribed in  56-9-311 that an insurer that the person represents as an agent is the subject of a liquidation order shall, within thirty (30) days of the notice, provide to the liquidator, in addition to the information the person may be required to provide pursuant to  56-9-106, the information in the agent's records related to any policy issued by the insurer through the agent, and, if the agent is a general agent, the information in the general agent's records related to any policy issued by the insurer through an agent under contract to the general agent, including the name and address of the subagent.   A policy shall be deemed issued through an agent if the agent has a property interest in the expiration of the policy, or if the agent has had in the agent's possession a copy of the declarations of the policy at any time during the life of the policy, except where the ownership of the expiration of the policy has been transferred to another.     Any agent failing to provide information to the liquidator as required in subsection (a) may be subject to payment of a penalty of not more than one thousand dollars ($1,000) and may have the agent's licenses suspended, the penalty to be imposed after a hearing held by the commissioner.   
   Upon issuance of an order appointing a liquidator of a domestic insurer or of an alien insurer domiciled in this state, no action at law or equity or in arbitration shall be brought against the insurer or liquidator, whether in this state or elsewhere, nor shall any such existing actions be maintained or further presented after issuance of the order.   The courts of this state shall give full faith and credit to injunctions against the liquidator or the company or the continuation of existing actions against the liquidator or the company, when the injunctions are included in an order to liquidate an insurer issued pursuant to corresponding provisions in other states.   Whenever, in the liquidator's judgment, protection of the estate of the insurer necessitates intervention in an action against the insurer that is pending outside this state, the liquidator may intervene in the action. The liquidator may defend any action in which the liquidator intervenes under this section at the expense of the estate of the insurer.      The liquidator may, upon or after an order for liquidation, within two (2) years or such other longer time as applicable law may permit, institute an action or proceeding on behalf of the estate of the insurer upon any cause of action against which the period of limitation fixed by applicable law has not expired at the time of the filing of the petition upon which the order is entered.   Where, by any agreement, a period of limitation is fixed for instituting a suit or proceeding upon any claim, or for filing any claim, proof of claim, proof of loss, demand, notice, or the like, or where in any proceeding, judicial or otherwise, a period of limitation is fixed, either in the proceeding or by applicable law, for taking any action, filing any claim or pleading, or doing any act, and where in any such case the period had not expired at the date of the filing of the petition, the liquidator may, for the benefit of the estate, take any such action or do any such act, required of or permitted to the insurer, within a period of one hundred eighty (180) days subsequent to the entry of an order for liquidation, or within a further period as is shown to the satisfaction of the court not to be unfairly prejudicial to the other party.     No statute of limitation or defense of laches shall run with respect to any action against an insurer between the filing of a petition for liquidation against an insurer and the denial of the petition. Any action against the insurer that might have been commenced when the petition was filed may be commenced for at least sixty (60) days after the petition is denied.   Any guaranty association or foreign guaranty association has standing to appear in any court proceeding concerning the liquidation of an insurer if the association is or may become liable to act as a result of the liquidation.   
  As soon as practicable after the liquidation order, but not later than one hundred twenty (120) days thereafter, the liquidator shall prepare in duplicate a list of the insurer's assets. The list shall be amended or supplemented from time to time as the liquidator may determine. One (1) copy shall be filed in the office of the clerk of the chancery court of Davidson County and one (1) copy shall be retained for the liquidator's files. All amendments and supplements shall be similarly filed.   The liquidator shall reduce the assets to a degree of liquidity that is consistent with the effective execution of the liquidation.   A submission to the court for disbursement of assets in accordance with  56-9-322 fulfills the requirements of subsection (a).   
   Every transfer made or suffered and every obligation incurred by an insurer within one (1) year prior to the filing of a successful petition for rehabilitation or liquidation under this chapter is fraudulent as to then existing and future creditors, if made or incurred without fair consideration, or with actual intent to hinder, delay or defraud either existing or future creditors.   A transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under this chapter, which is fraudulent under this section, may be voided by the receiver, except as to a person who in good faith is a purchaser, lienor or obligee for a present fair equivalent value, and except that any purchaser, lienor or obligee, who in good faith has given a consideration less than fair for the transfer, lien or obligation, may retain the property, lien or obligation as security for repayment.   The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and, in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor or obligee.      A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee under  56-9-317(c).   A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.   A transfer that creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.   Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.   This subsection (b) shall apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers.     Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under subsection (a) if:  The transaction consists of the termination, adjustment or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transactions, unless the reinsurer gives a present fair equivalent value for the release; and   Any part of the transaction took place within one (1) year prior to the date of filing of the petition through which the receivership was commenced.     Every person receiving any property from the insurer or any benefit thereof which is a fraudulent transfer under subsection (a) shall be personally liable therefor and shall be bound to account to the liquidator.   Notwithstanding this section and any other provision of this title, a receiver shall not avoid any transfer of, or any obligation to transfer, money or any other property arising under or in connection with a federal home loan bank security agreement or any pledge agreement, security agreement, collateral agreement, guarantee agreement, or other similar arrangement or credit enhancement relating to a security agreement to which a federal home loan bank is a party. However, a transfer may be avoided under this section if it was made with the actual intent to hinder, delay, or defraud either existing or future creditors.   
   After a petition for rehabilitation or liquidation has been filed, a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred.   The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the recorder of deeds in the county where any real property in question is located.   The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.      After a petition for rehabilitation or liquidation has been filed, and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:  A transfer of any of the property of the insurer, other than real property, made to a person acting in good faith is valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred;   A person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part of the property, to the insurer or upon the insurer's order, with the same effect as if the petition were not pending;   A person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith; and   A person asserting the validity of a transfer under this section has the burden of proof.     Except as elsewhere provided in this section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator.     Every person receiving any property from the insurer or any benefit that is a fraudulent transfer under subsection (a) is personally liable therefor and is bound to account to the liquidator.   Nothing in this chapter impairs the negotiability of currency or negotiable instruments.   
   A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within one (1) year before the filing of a successful petition for liquidation under this chapter, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then the transfers shall be deemed preferences if made or suffered within one (1) year before the filing of the successful petition for rehabilitation, or within two (2) years before the filing of the successful petition for liquidation, whichever time is shorter.   Any preference may be avoided by the liquidator if:  The insurer was insolvent at the time of the transfer;   The transfer was made within four (4) months before the filing of the petition;   The creditor receiving it or to be benefited thereby or the creditor's agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or   The creditor receiving it was an officer, or any employee or attorney or other person who was in fact in a position of comparable influence in the insurer to an officer, whether or not the person held the position, or any shareholder holding directly or indirectly more than five percent (5%) of any class of any equity security issued by the insurer, or any other person, firm, corporation, association or aggregation of persons with whom the insurer did not deal at arm's length.     Where the preference is voidable, the liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property, except where a bona fide purchaser or lienor has given less than fair equivalent value, the purchaser or lienor shall have a lien upon the property to the extent of the consideration actually given by the purchaser or lienor. Where a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator.      A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.   A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.   A transfer that  creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.   A transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.   This subsection (b) shall apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers.      A lien obtainable by legal or equitable proceedings upon a simple contract is one arising in the ordinary course of the proceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens that are prior in time.   A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of a transferee within the meaning of subsection (b), if the consequences would follow only from the lien or purchase itself, or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials. Such a lien could not, however, become superior and such a purchase could not create superior rights for the purpose of subsection (b) through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase that  require the agreement or concurrence of any third party or that  require any further judicial action or ruling.     A transfer of property for or on account of a new and contemporaneous consideration, which is deemed under subsection (b) to be made or suffered after the transfer because of delay in perfecting it, does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within twenty-one (21) days or any period expressly allowed by the law, whichever is less. A transfer to secure a future loan, if such a loan is actually made, or a transfer that becomes security for a future loan, shall have the same effect as a transfer for or on account of a new and contemporaneous consideration.   If any lien deemed voidable under subdivision (a)(2) has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of, or the creation of, a lien upon any property of an insurer before the filing of a petition under this chapter that  results in a liquidation order, the indemnifying transfer or lien shall also be deemed voidable.   The property affected by any lien deemed voidable under subsections (a) and (e) shall be discharged from the lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may, on due notice, order any such lien to be preserved for the benefit of the estate, and the court may direct that the conveyance be executed as may be proper or adequate to evidence the title of the liquidator.   The chancery court of Davidson County has summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under this section. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. Where an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien, and if the value is less than the amount for which the property is indemnified or than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the liquidator, within reasonable times as the court shall fix.   The liability of the surety under a releasing bond or other like obligation is discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and avoided by the liquidator, or, where the property is retained under subsection (g), to the extent of the amount paid to the liquidator.   If a creditor has been preferred, and afterward in good faith gives the insurer further credit without security of any kind, for property that becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference that would otherwise be recoverable from the creditor.   If an insurer, directly or indirectly, within four (4) months before the filing of a successful petition for liquidation under this chapter, or at any time in contemplation of a proceeding to liquidate it, pays money or transfers property to an attorney for services rendered or to be rendered, the transactions may be examined by the court on its own motion or shall be examined by the court on petition of the liquidator and shall be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the liquidator for the benefits of the estate; provided, that where the attorney is in a position of influence in the insurer or an affiliate thereof, payment of any money or the transfer of any property to the attorney for services rendered or to be rendered shall be governed by subdivision (a)(2)(D).    Every officer, manager, employee, shareholder, member, subscriber, attorney or any other person acting on behalf of the insurer who knowingly participates in giving any preference, when the person has reasonable cause to believe the insurer is, or is about to become, insolvent at the time of the preference, is personally liable to the liquidator for the amount of the preference. It is permissible to infer that there is a reasonable cause to so believe if the transfer was made within four (4) months before the date of filing of the successful petition for liquidation.   Every person receiving any property from the insurer or the benefit of the property as a preference voidable under subsection (a) is personally liable therefor and is bound to account to the liquidator.   Nothing in this subsection (k) shall prejudice any other claim by the liquidator against any person.     Notwithstanding subdivision (a)(2) and any other provision of this title, a liquidator or rehabilitator shall not avoid any preference arising under or in connection with a federal home loan bank security agreement or any pledge agreement, security agreement, collateral agreement, guarantee agreement, or other similar arrangement or credit enhancement relating to a security agreement to which a federal home loan bank is a party.   
  No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment or encumbrance voidable under this chapter shall be allowed unless the creditor surrenders the preference, lien, conveyance, transfer, assignment or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed unless the money is paid or the property is delivered to the liquidator within thirty (30) days from the date of the entering of the final judgment, except that the court having jurisdiction over the liquidation may allow further time if there is an appeal or other continuation of the proceeding.   A claim allowable under subsection (a) by reason of the avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment or encumbrance, may be filed as an excused late filing under  56-9-323, if filed within thirty (30) days from the date of the avoidance, or within the further time allowed by the court under subsection (a).   
  In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter, the credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b).   No offset shall be allowed in favor of any such person where:  The obligation of the insurer to the person would not, at the date of the entry of any liquidation order or otherwise, as provided in this chapter, entitle the person to share as a claimant in the assets of the insurer;   The obligation of the insurer to the person was purchased by or transferred to the person with a view of its being used as an offset; or   The obligation of the person is to pay an assessment levied against the subscribers of a reciprocal insurer, or is to pay a balance upon the subscription to the capital stock of a stock insurer.     
  As soon as practicable, but not more than two (2) years from the date of an order of liquidation under  56-9-307 of an insurer issuing assessable policies, the liquidator shall make a report to the court setting forth:  The reasonable value of the assets of the insurer;   The insurer's probable total liabilities;   The probable aggregate amount of the assessment necessary to pay all claims of creditors and expenses in full, including expenses of administration and costs of collecting the assessment; and   A recommendation as to whether or not an assessment should be made and in what amount.      Upon the basis of the report provided in subsection (a), including any supplements and amendments thereto, the chancery court of Davidson County may levy one (1) or more assessments against all members of the insurer who are subject to assessment.   Subject to any applicable legal limits on assessability, the aggregate assessment shall be for the amount that the sum of the probable liabilities, the expenses of administration, and the estimated cost of collection of the assessment exceeds the value of existing assets, with due regard being given to assessments that cannot be collected economically.     After levy of assessment under subsection (b), the liquidator shall issue an order directing each member who has not paid the assessment pursuant to the order to show cause why the liquidator should not pursue a judgment therefor.   The liquidator shall give notice of the order to show cause by publication and by first class mail to each member liable thereunder mailed to the member's last known address as it appears on the insurer's records, at least twenty (20) days before the return day of the order to show cause.    If a member does not appear and serve duly verified objections upon the liquidator on or before the return day of the order to show cause under subsection (c), the court shall make an order adjudging the member liable for the amount of the assessment against the member pursuant to subsection (c), together with costs, and the liquidator shall have a judgment against the member therefor.   If, on or before the return day, the member appears and serves duly verified objections upon the liquidator, the commissioner may hear and determine the matter or may appoint a referee to hear it and make the order as the facts warrant. In the event that the commissioner determines that the objections do not warrant relief from assessment, the member may request the court to review the matter and vacate the order to show cause.     The liquidator may enforce any order or collect any judgment under subsection (e) by any lawful means.   
   An agent, broker, premium finance company, or any other person, other than the insured, responsible for the payment of a premium is obligated to pay any earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer. The liquidator also has the right to recover from the person any part of an unearned premium that represents commission of the person. Credits or setoffs, or both, shall be allowed to an agent, broker, or premium finance company for any amounts advanced to the insurer by the agent, broker, or premium finance company on behalf of, but in the absence of a payment by, the insured.   An insured shall be obligated to pay any unpaid earned premium due the insurer at the time of the declaration of insolvency, as shown on the records of the insurer.     Upon satisfactory evidence of a violation of this section, the commissioner may pursue either one (1) or both of the following courses of action:  Suspend or revoke or refuse to renew the licenses of the offending party or parties; and   Impose a penalty of not more than one thousand dollars ($1,000) for each and every act in violation of this section by the offending party or parties.     Before the commissioner takes any action as set forth in subsection (b), the commissioner shall give written notice to the person, company, association or exchange accused of violating the law, stating specifically the nature of the alleged violation, and fixing a time and place, at least ten (10) days thereafter, when a hearing on the matter shall be held. After the hearing, or upon failure of the accused to appear at the hearing, the commissioner, if the commissioner finds a violation, shall impose any of the penalties under subsection (b) as the commissioner deems advisable.   When the commissioner takes action in any or all of the ways set out in subsection (b), the party aggrieved may appeal from the action to the chancery court of Davidson County.   With respect to any policy of insurance issued or delivered in this state, the claims of an insurer declared to be insolvent under the laws of any state, or of its liquidator, receiver, statutory successor or other legal representative, against the insured or against the agent through whom the policy was written are subject to the following limitations:  The insured is not liable to an insolvent insurer or its legal representative for any premium that had not been earned on a pro rata basis as of the date the insurer was declared insolvent. In addition, the insured is entitled to credit against any obligation owed to the insolvent insurer or its legal representative for any unearned premium that has been paid by the insured and for which the insured has not been reimbursed by the Tennessee insurance guaranty association; and   The agent through whom the policy was written also is not liable to the insolvent insurer or its legal representative for any premiums that had not been earned on a pro rata basis as of the date the insurer was declared insolvent. The agent is entitled to retain the commission due on earned premiums. The insured is entitled to any unearned premium that has been collected by the agent but not remitted to the insurer.     
  Within one hundred twenty (120) days of a final determination of insolvency of an insurer by a court of competent jurisdiction of this state, the liquidator shall make application to the court for approval of a proposal to disburse assets out of marshalled assets, from time to time as the assets become available, to a guaranty association or foreign guaranty association having obligations because of the insolvency. If the liquidator determines that there are insufficient assets to disburse, the application required by this section shall be considered satisfied by a filing by the liquidator stating the reasons for this determination.   The proposal shall at least include provisions for:  Reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors, to the extent of the value of the security held, and claims falling within the priorities established in  56-9-330, Classes 1 and 2;   Disbursement of the assets marshalled to date and subsequent disbursement of assets as they become available;   Equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled to the disbursements;   The securing by the liquidator from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the liquidator the assets, together with income earned on assets previously disbursed, as may be required to pay claims of secured creditors and claims falling within the priorities established in  56-9-330 in accordance with the priorities. No bond shall be required of any such association; and   A full report to be made by each association to the liquidator accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on the assets and any other matter as the court may direct.     The liquidator's proposal shall provide for disbursements to the associations in amounts estimated at least equal to the claim payments made or to be made thereby for which the associations could assert a claim against the liquidator, and shall further provide that, if the assets available for disbursement from time to time do not equal or exceed the amount of the claim payments made or to be made by the association, then disbursements shall be in the amount of available assets.   The liquidator's proposal shall, with respect to an insolvent insurer writing life or health insurance or annuities, provide for disbursements of assets to any guaranty association or any foreign guaranty association covering life or health insurance or annuities or to any other entity or organization reinsuring, assuming or guaranteeing policies or contracts of insurance under the acts creating the associations.   Notice of the application shall be given to the association in, and to the commissioners of insurance of, each of the states. This notice shall be deemed to have been given when deposited in the United States certified mail, first class postage prepaid, at least thirty (30) days prior to submission of the application to the court. Action on the application may be taken by the court; provided, that the above required notice has been given; and provided further, that the liquidator's proposal complies with subdivisions (b)(1) and (2).   
  Proof of all claims shall be filed with the liquidator in the form required by  56-9-324, on or before the last day for filing specified in the notice required under  56-9-311, except that proof of claims for cash surrender values or other investment values in life insurance and annuities need not be filed unless the liquidator expressly so requires.   The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if the claimant were not late, to the extent that any such payment will not prejudice the orderly administration of the liquidation, under the following circumstances:  The existence of the claim was not known to the claimant and the claimant filed the claimant's claim as promptly as reasonably possible after learning of it;   A transfer to a creditor was avoided under  56-9-315  56-9-317, or was voluntarily surrendered under  56-9-318, and that the filing satisfies the conditions of  56-9-318; and   The valuation under  56-9-329 of security held by a secured creditor shows a deficiency, which is filed within thirty (30) days after the valuation.     The liquidator shall permit late filing claims to share in distributions, whether past or future, as if they were not late, if the claims are claims of a guaranty association or foreign guaranty association for reimbursement of covered claims paid or expenses incurred, or both, subsequent to the last day for filing where the payments were made and expenses incurred as provided by law.   The liquidator may consider any claim filed late that is not covered by subsection (b), and permit it to receive distributions that are subsequently declared on any claims of the same or lower priority, if the payment does not prejudice the orderly administration of the liquidation. The late-filing claimant shall receive, at each distribution, the same percentage of the amount allowed on the claimant's claim as is then being paid to claimants of any lower priority. This shall continue until the claimant's claim has been paid in full.   
  Proof of claim shall consist of a statement, signed by the claimant, that includes all of the following that are applicable:  The particulars of the claim including the consideration given for it;   The identity and amount of the security on the claim;   The payments made on the debt, if any;   That the sum claimed is justly owing and that there is no setoff, counterclaim or defense to the claim;   Any right of priority of payment or other specific right asserted by the claimant;   A copy of the written instrument which is the foundation of the claim; and   The name and address of the claimant and the attorney who represents the claimant, if any.     No claim need be considered or allowed if it does not contain all the information in subsection (a) that may be applicable. The liquidator may require that a prescribed form be used, and may require that other information and documents be included.   At any time the liquidator may request the claimant to present information or evidence supplementary to that required under subsection (a) and may take testimony under oath, require production of affidavits or depositions, or otherwise obtain additional information or evidence.   No judgment or order against an insured or the insurer entered after the date of filing of a successful petition for liquidation, and no judgment or order against an insured or the insurer entered at any time by default or by collusion, need be considered as evidence of liability or of the quantum of damages. No judgment or order against an insured or the insurer entered within four (4) months before the filing of the petition need be considered as evidence of liability or of the quantum of damages.   All claims of a guaranty association or foreign guaranty association shall be in the form and contain the substantiation that may be agreed to by the association and the liquidator.   
  The claim of a third party which is contingent only on the third party's first obtaining a judgment against the insured shall be considered and allowed as if there were no such contingency.   A claim may be allowed even if contingent, if it is filed in accordance with  56-9-323. It may be allowed and may participate in all distributions declared after it is filed to the extent that it does not prejudice the orderly administration of the liquidation.   Claims that are due except for the passage of time shall be treated as absolute claims are treated, except that the claims may be discounted at the legal rate of interest.   Claims made under employment contracts by directors, principal officers, or persons in fact performing similar functions or having similar powers are limited to payment for services rendered prior to the issuance of any order of rehabilitation or liquidation under  56-9-302 or  56-9-307.   
  Whenever any third party asserts a cause of action against an insured of an insurer in liquidation, the third party may file a claim with the liquidator.   Whether or not the third party files a claim, the insured may file a claim on the insured's own behalf in the liquidation. If the insured fails to file a claim by the date for filing claims specified in the order of liquidation or within sixty (60) days after mailing of the notice required by  56-9-311, whichever is later, the insured is an unexcused late filer.    The liquidator shall make the liquidator's recommendations to the court under  56-9-331, for the allowance of an insured's claim under subsection (b) after consideration of the probable outcome of any pending action against the insured on which the claim is based, the probable damages recoverable in the action and the probable costs and expenses of defense. After allowance by the court, the liquidator shall withhold any dividends payable on the claim, pending the outcome of litigation and negotiation with the insured. Whenever it seems appropriate, the liquidator shall reconsider the claim on the basis of additional information and amend the liquidator's recommendations to the court. The insured shall be afforded the same notice and opportunity to be heard on all changes in the recommendation as in its initial determination.    The court may amend its allowance as it thinks appropriate. As claims against the insured are settled or barred, the insured shall be paid from the amount withheld the same percentage dividend as was paid on other claims of like property, based on the lesser of:   The amount actually recovered from the insured by action or paid by agreement plus the reasonable costs and expense of defense; or   The amount allowed on the claims by the court.     After all claims are settled or barred, any sum remaining from the amount withheld shall revert to the undistributed assets of the insurer. Delay in final payment under this subsection (c) is not a reason for unreasonable delay of final distribution and discharge of the liquidator.       If several claims founded upon one (1) policy are filed, whether by third parties or as claims by the insured under this section, and the aggregate allowed amount of the claims to which the same limit of liability in the policy is applicable exceeds that limit, each claim as allowed shall be reduced in the same proportion so that the total equals the policy limit. Claims by the insured shall be evaluated as in subsection (c). If any insured's claim is subsequently reduced under subsection (c), the amount thus freed shall be apportioned ratably among the claims that have been reduced under this subsection (d).   No claim may be presented under this section if it is or may be covered by any guaranty association or foreign guaranty association.   
  When a claim is denied in whole or in part by the liquidator, written notice of the determination shall be given to the claimant or the claimant's attorney by first class mail at the address shown in the proof of claim. Within thirty (30) days from the mailing of the notice, the claimant may file objections with the liquidator. Any filed objections shall clearly set out all facts and the legal basis, if any, for the objections and the reasons why the claim should be allowed. If no such filing is made, the determination is final.   Whenever objections are filed with the liquidator and the liquidator does not alter the determination of the claim as a result of the objections, the liquidator shall ask the court for a hearing as soon as practicable and give notice of the hearing by first class mail to the claimant or the claimant's attorney and to any other persons directly affected, not less than ten (10) nor more than thirty (30) days before the date of the hearing. The matter may be heard by the court or by a court-appointed referee. The hearing shall be conducted on the record in an informal manner and the formal rules of evidence and civil procedure need not be strictly applied. Hearings shall be held without a jury. Prehearing discovery shall be limited to the pretrial discovery as expressly permitted in arbitration proceedings under title 29, chapter 5.   When a disputed claim is heard by a referee, the referee shall submit written findings of fact and conclusions of law, together with the recommendation for disposition to the court. The referee's recommendation shall become the final judgment of the court, unless objections to the referee's recommendation are filed by the liquidator or a claimant with the court within fifteen (15) days after the recommendation is mailed to the liquidator and claimant.   The final disposition by the court of a disputed claim, whether after a hearing by the court or after a recommendation by a referee, shall be deemed a final judgment for purposes of appeal.   The courts of this state may make special rules of procedure for disputed claims, if such rules are not inconsistent with this chapter.   
  Whenever a creditor whose claim against an insurer is secured, in whole or in part, by the undertaking of another person fails to prove and file that claim, the other person may do so in the creditor's name, and shall be subrogated to the rights of the creditor, whether the claim has been filed by the creditor or by the other person in the creditor's name, to the extent that the other person discharges the undertaking.    In the absence of an agreement with the creditor to the contrary, the other person shall not be entitled to any distribution, however, until the amount paid to the creditor on the undertaking plus the distributions paid on the claim from the insurer's estate to the creditor equals the amount of the entire claim of the creditor.   Any excess received by the creditor shall be held by the creditor in trust for such other person.     Other person, as used in this section, is not intended to apply to a guaranty association or foreign guaranty association.   
  The value of any security held by a secured creditor shall be determined in one (1) of the following ways, as the court may direct:  By converting the same into money according to the terms of the agreement pursuant to which the security was delivered to the creditors; or   By agreement, arbitration, compromise or litigation between the creditor and the liquidator.     The determination shall be under the supervision and control of the court with due regard for the recommendation of the liquidator. The amount so determined shall be credited upon the secured claim, and any deficiency shall be treated as an unsecured claim. If the claimant surrenders the claimant's security to the liquidator, the entire claim shall be allowed as if unsecured.   
  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:  Class 1.  The costs and expenses of administration during rehabilitation and liquidation, including, but not limited to, the following:  The actual and necessary costs of preserving or recovering the assets of the insurer;   Compensation for all authorized services rendered in the rehabilitation and liquidation;   Any necessary filing fees;   The fees and mileage payable to witnesses;   Authorized reasonable attorney's fees and other professional services rendered in the rehabilitation and liquidation; and   The reasonable expenses of a guaranty association or foreign guaranty association for unallocated loss adjustment expenses;     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;   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;   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;   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;   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);   Class 7.  Claims filed late or any other claims other than claims under subdivisions (a)(8) and (9);   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   Class 9.  The claims of shareholders or other owners in their capacity as shareholders.     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.   
  The liquidator shall review all claims duly filed in the liquidation and shall make  further investigation as the liquidator deems necessary. The liquidator may compound, compromise or in any other manner negotiate the amount for which claims will be recommended to the court, except where the liquidator is required by law to accept claims as settled by any person or organization, including any guaranty association or foreign guaranty association. Unresolved disputes shall be determined under  56-9-327. As soon as practicable, the liquidator shall present to the court a report of the claims against the insurer with the liquidator's recommendations. The report shall include the name and address of each claimant and the amount of the claim finally recommended, if any. If the insurer has issued annuities or life insurance policies, the liquidator shall report the persons to whom, according to the records of the insurer, amounts are owed as cash surrender values or other investment value and the amounts owed.   The court may approve, disapprove or modify the report on claims by the liquidator. Such reports as are not modified by the court within a period of sixty (60) days following submission by the liquidator shall be treated by the liquidator as allowed claims, subject thereafter to later modification or to rulings made by the court pursuant to  56-9-327. No claim under a policy of insurance shall be allowed for an amount in excess of the applicable policy limits.   
 Under the direction of the court, the liquidator shall pay distributions in a manner that will assure the proper recognition of priorities and a reasonable balance between the expeditious completion of the liquidation and the protection of unliquidated and undetermined claims, including third party claims. Distribution of assets in kind may be made at valuations set by agreement between the liquidator and the creditor and approved by the court.  
  All unclaimed funds subject to distribution remaining in the liquidator's hands when the liquidator is ready to apply to the court for discharge, including the amount distributable to any creditor, shareholder, member or other person who is unknown or cannot be found, shall be deposited with the state treasurer, and shall be paid without interest to the person entitled thereto or that person's legal representative upon proof satisfactory to the state treasurer of the person's right thereto. Any amount on deposit not claimed within six (6) years from the discharge of the liquidator shall be deemed to have been abandoned and shall be escheated without formal escheat proceedings and be deposited with the general fund. Alternatively, the liquidator may elect to apply to the court for authority to hold the unclaimed funds subject to distribution for a period of two (2) years. Thereafter, any unclaimed funds may be distributed to approved claimants who have previously received a distribution, if it is economically feasible for the liquidator to make the distribution, or the liquidator may apply to the court for permission for the funds to be held by the commissioner for the purpose of defraying the costs and expenses of administration of other insolvent insurers for which there are insufficient assets to fund the costs and expenses of administration. With the approval of the supervising court, the liquidator may deposit unclaimed and withheld funds into a segregated account to be known as the closed estate fund, hereinafter the fund. The commissioner may thereafter use moneys held in the account to fund the administrative expenses of proceedings against persons subject to this chapter that lack sufficient assets to fund administration. The commissioner shall maintain complete records with respect to all transactions involving the fund and shall prepare an annual accounting of the fund subject to audit by the comptroller of the treasury. If subsequent to disbursement of moneys from the fund, assets of the person become available to fund administration, the fund shall be reimbursed before other administrative expenses are paid.   All funds withheld under this chapter as a special claim and not distributed shall upon discharge of the liquidator be deposited with the state treasurer and paid in accordance with a priority of distribution of claims established by the liquidator. Any sums remaining that would revert to the undistributed assets of the insurer shall be transferred to the state treasurer and become the property of the state under subsection (a), unless the commissioner in the commissioner's discretion petitions the court to reopen the liquidation.   
  When all assets justifying the expense of collection and distribution have been collected and distributed under this chapter, the liquidator shall apply to the court for discharge. The court may grant the discharge and make any other orders, including an order to transfer any remaining funds that are uneconomic to distribute, as may be deemed appropriate.   Any other person may apply to the court at any time for an order under subsection (a). If the application is denied, the applicant shall pay the costs and expenses of the liquidator in resisting the application, including a reasonable attorney's fee.   
 After the liquidation proceeding has been terminated and the liquidator discharged, the commissioner or other interested party may at any time petition the chancery court of Davidson County to reopen the proceedings for good cause, including the discovery of additional assets. If the court is satisfied that there is justification for reopening, it shall so order.  
 Whenever it appears to the commissioner that the records of any insurer in process of liquidation, or completely liquidated, are no longer useful, the commissioner may recommend to the court, and the court shall direct, what records should be retained for future reference and what should be destroyed.  
 The chancery court of Davidson County may, as it deems desirable, cause audits to be made of the books of the commissioner relating to any receivership established under this chapter, and a report of each audit shall be filed with the commissioner and with the court. The books, records and other documents of the receivership shall be made available to the auditor at any time without notice. The expense of each audit shall be considered a cost of administration of the receivership.  
   Notwithstanding any other provision of this chapter, including any other provision of this chapter permitting the modification of contracts, or any other state law to the contrary, no person shall be stayed or prohibited from exercising:  A contractual right to cause the termination, liquidation, acceleration, or close-out of obligations under or in connection with any netting agreement or qualified financial contract with an insurer because of:   The insolvency, financial condition, or default of the insurer at any time; provided, that, the right is enforceable under another law other than this chapter; or   The commencement of a formal delinquency proceeding under this chapter;     Any right under a pledge, security, collateral, reimbursement or guarantee agreement or arrangement or any other similar security arrangement, or arrangement or other credit enhancement relating to one (1) or more netting agreements or qualified financial contracts; or   Subject to  56-9-319, any right to set off or net out any termination value, payment amount, or other transfer obligation arising under or in connection with one (1) or more qualified financial contracts where the counterparty or its guarantor is organized under the laws of the United States or a state or a foreign jurisdiction approved by the Securities Valuation Office of the National Association of Insurance Commissioners as eligible for netting.     Notwithstanding any other provision of this chapter, including any other provision of this chapter permitting the modification of contracts, or any other state law to the contrary, if a counterparty to a master netting agreement or a qualified financial contract with an insurer subject to a proceeding under this chapter terminates, liquidates, closes out, or accelerates the agreement or contract, damages shall be measured as of the date or dates of termination, liquidation, close-out, or acceleration; the amount of a claim for damages shall be actual direct compensatory damages calculated in accordance with subsection (f).      Upon termination of a netting agreement or qualified financial contract, the net or settlement amount, if any, owed by a nondefaulting party to an insurer against which an application or petition has been filed under this chapter shall be transferred to, or on the order of, the receiver for the insurer, even if the insurer is the defaulting party, notwithstanding any walkaway clause in the netting agreement or qualified financial contract.   For purposes of this subsection (b), walkaway clause means a provision in a netting agreement or a qualified financial contract that, after calculation of a value of a party's position or an amount due to or from one of the parties in accordance with its terms upon termination, liquidation, or acceleration of the netting agreement or qualified financial contract, either does not create a payment obligation of a party or extinguishes a payment obligation of a party in whole or in part solely because of the party's status as a nondefaulting party.   Any limited two-way payment or first method provision in a netting agreement or qualified financial contract with an insurer that has defaulted shall be deemed to be a full two-way payment or second method provision as against the defaulting insurer. Any such property or amount shall, except to the extent it is subject to one or more secondary liens or encumbrances, or rights of netting or setoff, be a general asset of the insurer.     In making any transfer of a netting agreement or qualified financial contract of an insurer subject to a proceeding under this chapter, the receiver shall either:  Transfer to one party, other than an insurer subject to a proceeding under this chapter, all netting agreements and qualified financial contracts between a counterparty or any affiliate of the counterparty and the insurer that is the subject of the proceeding, including:  All rights and obligations of each party under each netting agreement and qualified financial contract; and   All property, including any guarantees or other credit enhancement, securing any claims of each party under each netting agreement and qualified financial contract; or     Transfer none of the netting agreements, qualified financial contracts, rights, obligations, or property referred to in subdivision (c)(1), with respect to the counterparty and any affiliate of the counterparty.      If a receiver for an insurer makes a transfer of one (1) or more netting agreements or qualified financial contracts, then the receiver shall use its best efforts to notify any person who is party to the netting agreements or qualified financial contracts of the transfer by twelve o'clock (12:00) noon, the receiver's local time, on the business day following the transfer.   For purposes of this subsection (d), business day means a day other than a Saturday, Sunday, or any day on which either the New York Stock Exchange or the federal reserve bank of New York is closed.     Notwithstanding any other provision of this chapter, a receiver may not avoid a transfer of money or other property arising under or in connection with a netting agreement or qualified financial contract, or any pledge, security, collateral, or guarantee agreement or any other similar security arrangement or credit support document relating to a netting agreement or qualified financial contract, that is made before the commencement of a formal delinquency proceeding under this chapter. However, a transfer may be avoided under  56-9-315 if the transfer was made with actual intent to hinder, delay, or defraud the insurer, a receiver appointed for the insurer, or existing or future creditors.    In exercising the receiver's rights of disaffirmance or repudiation with respect to any netting agreement or qualified financial contract to which an insurer is a party, the receiver for the insurer shall either:  Disaffirm or repudiate all netting agreements and qualified financial contracts between a counterparty or any affiliate of the counterparty and the insurer that is the subject of the proceeding; or   Disaffirm or repudiate none of the netting agreements and qualified financial contracts referred to in subdivision (f)(1)(A), with respect to the person or any affiliate of the person.      Notwithstanding any other provision of this chapter, any claim of a counterparty against the estate arising from the receiver's disaffirmance or repudiation of a netting agreement or qualified financial contract that has not been previously affirmed in the liquidation or immediately preceding conservation or rehabilitation case shall be determined and shall be allowed or disallowed as if the claim had arisen before the date of the filing of the petition for liquidation or, if a conservation or rehabilitation proceeding is converted to a liquidation proceeding, as if the claim had arisen before the date of the filing of the petition for conservation or rehabilitation. The amount of the claim shall be the actual direct compensatory damages determined as of the date of the disaffirmance or repudiation of the netting agreement or qualified financial contract.   Actual direct compensatory damages does not include punitive or exemplary damages, damages for lost profit or lost opportunity, or damages for pain and suffering, but does include normal and reasonable costs of cover or other reasonable measures of damages utilized in the derivatives, securities, or other market for the contract and agreement claims.       As used in this section, contractual right includes any right set forth in a rule or bylaw of a derivatives clearing organization as defined in the Commodity Exchange Act (7 U.S.C.  1a), as amended from time to time, a multilateral clearing organization as defined in the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C.  4421), as amended from time to time, a national securities exchange, a national securities association, a securities clearing agency, a contract market designated under the Commodity Exchange Act (7 U.S.C.  7b-1), as amended from time to time, a derivatives transaction execution facility registered under the Commodity Exchange Act (7 U.S.C.  7a), as amended from time to time, or a board of trade as defined in the Commodity Exchange Act (7 U.S.C.  1a), as amended from time to time, or in a resolution of the governing board thereof and any right, whether or not evidenced in writing, arising under statutory or common law, or under law merchant, or by reason of normal business practice.   This section shall not apply to persons who are affiliates of the insurer that is the subject of the proceeding.   All rights of counterparties under this chapter shall apply to netting agreements and qualified financial contracts entered into on behalf of the general account or separate accounts if the assets of each separate account are available only to counterparties to netting agreements and qualified financial contracts entered into on behalf of such separate account.   
  Notwithstanding any other provision of this title, any secured claim that a federal home loan bank has on an insurer who is subject to a delinquency proceeding under this chapter is governed exclusively by this section.   Notwithstanding any other provision of this title, a receiver shall not void a redemption or repurchase of any stock or equity securities made by a federal home loan bank within four (4) months of the commencement of the delinquency proceedings or that received prior approval of the receiver. However, a transfer is voidable if the transfer is made with the actual intent to hinder, delay, or defraud the insurer member, the receiver for the insurer member, existing creditors, or future creditors.   If a federal home loan bank exercises its rights regarding collateral pledged by an insurer member who is subject to a delinquency proceeding, then the federal home loan bank shall repurchase any capital stock that is in excess of the amount of federal home loan bank stock that the insurer member is required to hold as a minimum investment, to the extent the federal home loan bank in good faith determines the repurchase to be permissible under applicable laws, regulations, regulatory obligations, and the federal home loan bank's capital plan, and consistent with the federal home loan bank's current capital stock practices applicable to its entire membership.   Following the appointment of a receiver for an insurer member, the federal home loan bank, within ten (10) business days after a request made by the receiver, shall provide a process and establish timelines for the:  Release of collateral that exceeds the lendable collateral value, as determined pursuant to the advance agreement with the federal home loan bank, required to support secured obligations remaining after any repayment of advances;   Release of any of the insurer member's collateral remaining in the federal home loan bank's possession following repayment in full of all outstanding secured obligations of the insurer member;   Payment of fees owed by the insurer member and the operation of deposits and other accounts of the insurer member with the federal home loan bank; and   Possible redemption or repurchase of federal home loan bank stock or excess stock of any class that an insurer member is required to own.     Upon request from the receiver for an insurer member, the federal home loan bank shall provide any available options that an insurer member may exercise to renew or restructure an advance to defer associated prepayment fees, subject to the following:  Market conditions;   The terms of the advances outstanding to the insurer member;   The applicable policies of the federal home loan bank; and   Compliance with the Federal Home Loan Bank Act (12 U.S.C.  1421, et seq.) and corresponding regulations.     After the tenth day following the commencement of a delinquency proceeding in this state involving an insurer member of the federal home loan bank, the federal home loan bank must not be stayed or prohibited from exercising its rights regarding collateral pledged by that insurer member.   
  If a domiciliary liquidator has not been appointed, the commissioner may apply to the chancery court by verified petition for an order directing the commissioner to act as conservator to conserve the property found in this state or any other state of an alien insurer not domiciled in this state or property found in this state or any other state of a foreign insurer on any one (1) or more of the following grounds:  The insurer is insolvent;   Any of its property has been sequestered by official action in its domiciliary state, or in any other state;   Enough of its property has been sequestered in a foreign country to give reasonable cause to fear that the insurer is or may become insolvent;    Its certificate of authority to do business in this state has been revoked or that none was ever issued; and   There are residents of this state with outstanding claims or outstanding policies.       When an order is sought under subsection (a), the court shall cause the insurer to be given notice and time to respond thereto as is reasonable under the circumstances.   The court may issue the order in whatever terms it shall deem appropriate. The filing or recording of the order with the clerk of the chancery court, or the register of deeds of the county in which the principal business of the company is located, shall impart the same notice as a deed, bill of sale or other evidence of title duly filed or recorded which that register of deeds would have imparted.   The conservator shall hold and conserve the assets until the time the commissioner in the domiciliary state begins formal delinquency proceedings against the insurer or until an order terminating conservation is entered under subsection (e). Once a delinquency proceeding is instituted in the domiciliary state, the conservator may either turn the property over to the domiciliary commissioner or petition to be appointed ancillary receiver. If the insurer is an alien insurer that has not established a domicile in the United States under an appropriate port of entry statute, the conservator may petition the court for an order of liquidation under any permissible ground. The application may seek, and the order of liquidation shall provide, that all property and assets, affairs and claims against the alien insurer shall be vested in the liquidator in this state as if the insurer was domiciled in this state; provided, that if an order of liquidation of the alien insurer has been entered by a court of competent jurisdiction in a reciprocal state, which provides for the reciprocal state's receiver to be treated as if it is the domiciliary liquidator, then the order of liquidation in this state shall be issued as an order appointing an ancillary receiver.   The conservator may at any time petition the court for an order terminating conservation of the property of an insurer. If the court finds that the conservation is no longer necessary, it shall order that the insurer be restored to possession of its property and the control of its business. The court may also make a finding and issue an order at any time upon motion of any interested party, but if the motion is denied all costs shall be assessed against the party.   
  If no domiciliary receiver has been appointed, the commissioner may apply to the chancery court of Davidson County by verified petition for an order directing the commissioner to liquidate the assets found in this state of a foreign insurer or an alien insurer not domiciled in this state, on any of the following grounds:  Any of the grounds in  56-9-301 or  56-9-306; or   Any of the grounds specified in  56-9-401(a)(2)-(4).     When an order is sought under subsection (a), the court shall cause the insurer to be given the notice and time to respond thereto as is reasonable under the circumstances.   If it appears to the court that the best interests of creditors, policyholders and the public so require, the court may issue an order to liquidate in whatever terms it deems appropriate. The filing or recording of the order with the clerk of the chancery court of Davidson County, or the recorder of deeds of the county in which the principal business of the company is located or the county in which its principal office or place of business is located, shall impart the same notice as a deed, bill of sale or other evidence of title duly filed or recorded with that recorder of deeds would have imparted.    If a domiciliary liquidator is appointed in a reciprocal state while a liquidation is proceeding under this section, the liquidator under this section shall thereafter act as ancillary receiver under  56-9-404.   If a domiciliary liquidator is appointed in a nonreciprocal state while a liquidation is proceeding under this section, the liquidator under this section may petition the court for permission to act as ancillary receiver under  56-9-404.     On the same grounds as are specified in subsection (a), the commissioner may petition any appropriate federal district court to be appointed receiver to liquidate that portion of the insurer's assets and business over which the court will exercise jurisdiction, or any lesser part that the commissioner deems desirable for the protection of the policyholders and creditors in this state.   The court may order the commissioner, when the commissioner has liquidated the assets of a foreign or alien insurer under this section, to pay claims of residents of this state against the insurer under such rules as to the liquidation of insurers under this chapter as are otherwise compatible with this section.   
   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.   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.   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.      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.   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.     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.   
  If a domiciliary liquidator has been appointed for an insurer not domiciled in this state, the commissioner may file a petition with the chancery court of Davidson County requesting appointment as ancillary receiver in this state:  If the commissioner finds that there are sufficient assets of the insurer located in this state to justify the appointment of an ancillary receiver; and   If the protection of creditors or policyholders in this state so requires.     The court may issue an order appointing an ancillary receiver in whatever terms it deems appropriate. The filing or recording of the order with the recorder of deeds in this state imparts the same notice as a deed, bill of sale or other evidence of title duly filed or recorded with that recorder of deeds.    When a domiciliary liquidator has been appointed in a reciprocal state, then the ancillary receiver appointed in this state may, whenever necessary, aid and assist the domiciliary liquidator in recovering assets of the insurer located in this state.   The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims that are proved and allowed in the ancillary proceedings in this state, and shall pay the necessary expenses of the proceedings. The ancillary receiver shall promptly transfer all remaining assets, books, accounts and records to the domiciliary liquidator.   Subject to this section, the ancillary receiver and the ancillary receiver's deputies have the same powers and are subject to the same duties with respect to the administration of assets as a liquidator of an insurer domiciled in this state.     When a domiciliary liquidator has been appointed in this state, ancillary receivers appointed in reciprocal states have, as to assets and books, accounts, and other records in their respective states, rights, duties and powers corresponding to those provided in subsection (c) for ancillary receivers appointed in this state.   
 The commissioner, in the commissioner's sole discretion, may institute proceedings under  56-9-201 and 56-9-202, at the request of the commissioner or other appropriate insurance official of the domiciliary state of any foreign or alien insurer having property located in this state.  
  In a liquidation proceeding begun in this state against an insurer domiciled in this state, claimants residing in foreign countries or in states not reciprocal states must file claims in this state, and claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary liquidator. Claims must be filed on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding.   Claims belonging to claimants residing in reciprocal states may be proved either in the liquidation proceeding in this state as provided in this chapter, or in ancillary proceedings, if any, in the reciprocal states. If notice of the claims and opportunity to appear and be heard is afforded the domiciliary liquidator of this state as provided in  56-9-407(b), with respect to ancillary proceedings, the final allowance of claims by the courts in ancillary proceedings in reciprocal states shall be conclusive as to amount and as to priority against special deposits or other security located in the ancillary states, but shall not be conclusive with respect to priorities against general assets under  56-9-330.   
  In a liquidation proceeding in a reciprocal state against an insurer domiciled in that state, claimants against the insurer who reside within this state may file claims either with the ancillary receiver, if any, in this state, or with the domiciliary liquidator. Claims must be filed on or before the last dates fixed for the filing of claims in the domiciliary liquidation proceeding.   Claims belonging to claimants residing in this state may be proved either in the domiciliary state under the law of that state, or in ancillary proceedings, if any, in this state. If a claimant elects to prove the claimant's claim in this state, the claimant shall file the claimant's claim with the liquidator in the manner provided in  56-9-323 and 56-9-324. The ancillary receiver shall make the ancillary receiver's recommendation to the court as under  56-9-331. The ancillary receiver shall also arrange a date for hearing if necessary under  56-9-327, and shall give notice to the liquidator in the domiciliary state, either by certified mail or by personal service at least forty (40) days prior to the date set for hearing. If the domiciliary liquidator, within thirty (30) days after the giving of the notice, gives notice in writing to the ancillary receiver and to the claimant, either by certified mail or by personal service, of the domiciliary liquidator's intention to contest the claim, the domiciliary liquidator shall be entitled to appear or to be represented in any proceeding in this state involving the adjudication of the claim.   The final allowance of the claim by the courts of this state shall be accepted as conclusive as to amount and as to priority against special deposits or other security located in this state.   
 During the pendency in this or any other state of a liquidation proceeding, whether called by that name or not, no action or proceeding in the nature of an attachment, garnishment or levy of execution shall be commenced or maintained in this state against the delinquent insurer or its assets.  
  In a liquidation proceeding in this state involving one (1) or more reciprocal states, the order of distribution of the domiciliary state shall control as to all claims of residents of this and reciprocal states. All claims of residents of reciprocal states shall be given equal priority of payment from general assets regardless of where the assets are located.    The owners of special deposit claims against an insurer for which a liquidator is appointed in this or any other state shall be given priority against the special deposits in accordance with the statutes governing the creation and maintenance of the deposits.   If there is a deficiency in any deposit, so that the claims secured by it are not fully discharged from it, the claimants may share in the general assets, but the sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.     The owner of a secure claim against an insurer for which a liquidator has been appointed in this or any other state may surrender the owner's security and file the owner's claim as a general creditor, or the claim may be discharged by resort to the security in accordance with  56-9-328, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors.   
 If an ancillary receiver in another state or foreign country, whether called by that name or not, fails to transfer to the domiciliary liquidator in this state any assets within the ancillary receiver's control, other than special deposits, diminished only by the expenses of the ancillary receivership, if any, the claims filed in the ancillary receivership, other than special deposit claims or secured claims, shall be placed in the class of claims under  56-9-330(7).  
 As used in this part, unless the context otherwise requires:   Commissioner means the commissioner of commerce and insurance;   Consent means agreement to administrative supervision by the insurer;   Department means the department of commerce and insurance;   Exceeded its powers means the following conditions:  The insurer has refused to permit examination of its books, papers, accounts, records or affairs by the commissioner, the commissioner's deputies, employees or duly commissioned examiners;   A domestic insurer has unlawfully removed from this state books, papers, accounts or records necessary for an examination of the insurer;   The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and departmental requests relating to such statutes or rules;   The insurer has neglected or refused to observe an order of the commissioner to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock or surplus;   The insurer is continuing to transact insurance or write business after its license has been revoked or suspended by the commissioner;   The insurer, by contract or otherwise, has unlawfully or has, in violation of an order of the commissioner, or has, without first having obtained written approval of the commissioner if approval is required by law:   Totally reinsured its entire outstanding business; or   Merged or consolidated substantially its entire property or business with another insurer;     The insurer engaged in any transaction in which it is not authorized to engage under the laws of this state; or   The insurer refused to comply with a lawful order of the commissioner; and     Insurer means and includes every person engaged as indemnitor, surety or contractor in the business of entering into contracts of insurance or of annuities, as limited to:  Any insurer who is doing an insurer business, or has transacted insurance in this state, and against whom claims arising from that transaction may exist now or in the future;   Any fraternal benefit society that is subject to chapter 25 of this title; and   Any other person subject to this chapter.     
 This chapter shall apply to:   All domestic insurers; and   Any other insurer doing business in this state whose state of domicile has asked the commissioner to apply this chapter as regards the insurer.   
  An insurer may be subject to administrative supervision by the commissioner if, upon examination or at any other time, it appears in the commissioner's discretion that:  The insurer's condition renders the continuance of its business hazardous to the public or to its insureds;   The insurer has exceeded its powers granted under its certificate of authority and applicable law;   The insurer has failed to comply with the applicable provisions of the insurance code;   The business of the insurer is being conducted fraudulently; or   The insurer gives its consent.     If the commissioner determines that the conditions set forth in subsection (a) exist, the commissioner shall:  Notify the insurer of the commissioner's determination;   Furnish to the insurer a written list of the requirements to abate this determination; and   Notify the insurer that it is under the supervision of the commissioner and that the commissioner is applying and effectuating this part. The action by the commissioner is subject to review pursuant to applicable state administrative procedures under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.     If placed under administrative supervision, the insurer has sixty (60) days, or another period of time as designated by the commissioner, to comply with the requirements of the commissioner, subject to this chapter.   If it is determined, after notice and hearing, that the conditions giving rise to the supervision still exist at the end of the supervision period, the commissioner may extend the period.   If it is determined that none of the conditions giving rise to the supervision exist, the commissioner shall release the insurer from supervision.   
  Notwithstanding any other law and except as set forth in this section, proceedings, hearings, notices, correspondence, reports, records and other information in the possession of the commissioner or the department relating to the supervision of any insurer are confidential except as provided by this section.   The personnel of the department have access to these proceedings, hearings, notices, correspondence, reports, records or information as permitted by the commissioner.   The commissioner may open the proceedings or hearings or disclose the notices, correspondence, reports, records or information to a department, agency or instrumentality of this, or another, state or the United States, if the commissioner determines that the disclosure is necessary or proper for the enforcement of the laws of this state, another state or the United States.   The commissioner may open the proceedings or hearings or make public the notices, correspondence, reports, records or other information if the commissioner deems that it is in the best interest of the public or in the best interest of the insurer, its insureds, creditors or the general public.   This section does not apply to hearings, notices, correspondence, reports, records or other information obtained upon the appointment of a receiver for the insurer by a court of competent jurisdiction.   This section does not apply to hearings, notices, correspondence, reports, records or other information obtained by the placing under supervision of any insurer who derived as of the date of the supervision fifty-one percent (51%) or more of its total revenues for the past twelve (12) months from a contract or contracts with a governmental entity to provide health care services to enrollees in a publicly funded medical assistance program pursuant to title 71. In these cases, the hearings, notices, correspondence, reports, records, or other information which reflect the financial solvency of the insurer obtained during the supervision shall be open to the public under the Tennessee Public Records Act, compiled in title 10, chapter 7, unless otherwise required to be maintained as confidential under the federal or state law. An insurer within fifteen (15) days from the notice of supervision may apply to the court for a stay of application of this subsection (f), or for a protective order for particularized information that is proprietary in nature, the disclosure of which would be injurious to the rehabilitation of the insurer. This subsection (f) shall be stayed from the notice of supervision until a court of competent jurisdiction rules on the application for a stay or a protective order.   
 During the period of supervision, the commissioner or the commissioner's designated appointee shall serve as the administrative supervisor. The commissioner may provide that the insurer may not do any of the following things during the period of supervision, without the prior approval of the commissioner or the commissioner's appointed supervisor:   Dispose of, convey or encumber any of its assets or its business in force;   Withdraw any of its bank accounts;   Lend any of its funds;   Invest any of its funds;   Transfer any of its property;   Incur any debt, obligation or liability;   Merge or consolidate with another company;   Approve new premiums or renew any policies;   Enter into any new reinsurance contract or treaty;   Terminate, surrender, forfeit, convert or lapse any insurance policy, certificate or contract, except for nonpayment of premiums due;   Release, pay or refund premium deposits, accrued cash or loan values, unearned premiums, or other reserves on any insurance policy, certificate or contract;   Make any material change in management; or   Increase salaries and benefits of officers or directors or the preferential payment of bonuses, dividends or other payments deemed preferential.   
 During the period of supervision, the insurer may contest an action taken or proposed to be taken by the supervisor, specifying the manner wherein the action being complained of would not result in improving the condition of the insurer. Denial of the insurer's request upon reconsideration entitles the insurer to request a proceeding under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.  
 Nothing in this chapter precludes the commissioner from initiating judicial proceedings to place an insurer in conservation, rehabilitation or liquidation proceedings or other delinquency proceedings, however designated under the laws of this state, regardless of whether the commissioner has previously initiated administrative supervision proceedings under this chapter against the insurer.  
 The commissioner is empowered to adopt reasonable rules necessary for the implementation of this chapter.  
 Notwithstanding any other law, the commissioner may meet with a supervisor appointed under this chapter and with the attorney or other representative of the supervisor, without the presence of any other person, at the time of any proceeding or during the pendency of any proceeding held under this chapter, to carry out the commissioner's duties under this chapter or for the supervisor to carry out the supervisor's duties under this chapter.  
 There shall be no liability on the part of, and no cause of action of any nature shall arise against, the commissioner or the department or its employees or agents for any action taken by them in the performance of their powers and duties under this chapter.  
  The commissioner shall have the discretion to require any insurer placed under administrative supervision, as authorized by this part, to pay any and all appropriate and reasonable costs incurred during the supervision, including, but not limited to:  The expenses of the commissioner or the commissioner's designated appointee; and   The compensation of the experts, actuaries and examiners as may be contracted for by the commissioner or the commissioner's designated appointee for the purpose of assisting in the supervision. The compensation shall be fixed at a reasonable amount commensurate with usual compensation for like services and shall not exceed one hundred fifty percent (150%) of the compensation and per diem allowances set forth in the guidelines adopted by the National Association of Insurance Commissioners.     The costs of an administrative supervision incurred by the commissioner shall be paid into the department for its use and benefit in meeting the expenses and compensation for the persons engaged in the supervision.