2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 2 - INSURANCE COMPANIES (§§ 56-2-101 — 56-2-1011) › Part 1 - GENERAL REQUIREMENTS FOR DOING BUSINESS (§§ 56-2-101 — 56-2-126) › Section 56-2-104 - Contents of statement - Deposits

(a)
Any domestic company shall satisfy the commissioner that:
(1)
It is fully and legally organized under the laws of this state to do the business it proposes to transact;
(2)
(A)
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;
(B)
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;
(C)
(i)
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;
(ii)
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;
(D)
(i)
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;
(ii)
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
(3)
(A)
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:
(i)
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
(ii)
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;
(B)
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);
(C)
The commissioner, in the commissioner's sole discretion, may waive the requirement in subdivision (a)(3)(A) for any company.
(b)
(1)
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.
(2)
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.
(3)
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.
(4)
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.
Amended by 2015 Tenn. Acts, ch. 155,Secs.s1, s2 eff. 4/17/2015.
Amended by 2013 Tenn. Acts, ch. 5,s 1, 2, eff. 3/7/2013.
Acts 1935, ch. 183, §§ 2, 3; 1935 (E.S.), ch. 51, § 1; C. Supp. 1950, §§ 6130.1-6130.3 (Williams, §§ 6130.2, 6130.3, 6130.5); T.C.A. (orig. ed.), §§ 56-202 -- 56-204; Acts 1955, ch. 13, § 2; 1967, ch. 31, §§ 1, 2; 1977, ch. 29, § 1; T.C.A., § 56-204; Acts 1980, ch. 503, § 2; 1984, ch. 617, §§ 2-4; 1993, ch. 253, § 19; 1999, ch. 89, § 1; 2012, ch. 680, § 1.