2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 30 - DENTAL SERVICE PLAN LAW, 1961 (§§ 56-30-101 — 56-30-135) › Section 56-30-112 - Issuance of license - Prerequisites

The commissioner shall issue a license upon compliance with this chapter, and other proper requirements of the commissioner, and upon being satisfied that:
(1)
All items required to be filed are in proper form, as required by this chapter, and meet the approval of the commissioner;
(2)
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;
(3)
The solicitations of contracts by the corporation and its conditions or methods of operation are fair and reasonable;
(4)
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;
(5)
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;
(6)
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;
(7)
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);
(8)
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
(9)
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.
Acts 1961, ch. 340, § 11; 1965, ch. 309, § 3; T.C.A., § 56-3512.