reglab/statecodes huggingface dataset:
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 3 - BRANCH CAPTIVE INSURANCE COMPANIES (§§ 56-13-301 — 56-13-307) › Section 56-13-306 - Examination of a branch captive insurance company

(a)
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.
(b)
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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 3 - BRANCH CAPTIVE INSURANCE COMPANIES (§§ 56-13-301 — 56-13-307) › Section 56-13-307 - Taxation

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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-401 - Creation of special purpose financial captives

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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-403 - Controlling provisions when conflict exists - Exemptions

(a)
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.
(b)
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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-405 - Organization of SPFC

(a)
An SPFC may be established as a stock corporation, limited liability company, mutual, partnership, or other form of organization approved by the commissioner.
(b)
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.
(c)
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.
(d)
An SPFC shall have at least three (3) incorporators or organizers, of whom at least two (2) shall be residents of this state.
(e)
At least one (1) of the members of the management of the SPFC shall be a resident of this state.
(f)
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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-406 - Minimum capitalization

(a)
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.
(b)
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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-407 - Authorized activities

(a)
An SPFC shall only insure the risks of a counterparty.
(b)
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.
(c)
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:
(1)
Entering into SPFC contracts;
(2)
Issuing SPFC securities in accordance with applicable securities law;
(3)
Complying with the terms of such contracts or securities;
(4)
Entering into trust, guaranteed investment contract, letter of credit, swap, tax, administration, reimbursement, or fiscal agent transactions; and
(5)
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.
(d)
(1)
An SPFC shall discount its reserves at discount rates as approved by the commissioner.
(2)
An SPFC shall maintain reserves that are actuarially sufficient to support the liabilities incurred by SPFC in reinsuring life insurance policies.
(3)
An SPFC shall file annually with the commissioner an actuarial opinion on reserves provided by an approved independent actuary.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-410 - Issuing securities

(a)
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.
(b)
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.
(c)
Subject to the approval of the commissioner, an SPFC may lawfully:
(1)
Account for the proceeds of surplus notes as surplus and not as debt for purposes of statutory accounting; and
(2)
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.
(d)
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.
(e)
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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-411 - Asset management agreements

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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-413 - No securities considered to be insurance or reinsurance contracts

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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-414 - Preservation and administration of assets - Disclosures - Restrictions on investments

(a)
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.
(b)
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.
(c)
No SPFC shall be subject to any restriction on investments other than the following:
(1)
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;
(2)
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
(3)
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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-415 - Dividends

(a)
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.
(b)
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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-417 - Cessation of business

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.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 13 - REVISED TENNESSEE CAPTIVE INSURANCE ACT (§§ 56-13-101 — 56-13-418) › Part 4 - SPECIAL PURPOSE FINANCIAL CAPTIVES (§§ 56-13-401 — 56-13-418) › Section 56-13-418 - Applicability of insolvency provisions

(a)
Except as otherwise provided in this section, chapter 9 of this title shall apply in full to an SPFC.
(b)
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.
(c)
Notwithstanding chapter 9 of this title:
(1)
No asset of a protected cell shall be used to pay any expenses or claims other than those attributable to such protected cell; and
(2)
An SPFC's capital and surplus shall, at all times, be available to pay any expenses of or claims against the SPFC.
Acts 2011, ch. 468, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-101 - Short title - Applicability

(a)
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.
(b)
This chapter shall apply to surplus lines transactions where the insured's home state, as defined by §
56-14-102
, is this state.
Acts 1969, ch. 270, § 1; T.C.A., § 56-3801; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-103 - Surplus lines insurance authorized

(a)
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:
(1)
The insurance must be eligible for surplus lines under §
56-14-105
;
(2)
The insurer must be an eligible surplus lines insurer under §
56-14-109
;
(3)
The writing agent must be a licensed surplus lines agent; and
(4)
Any other applicable provisions of this chapter must be followed.
(b)
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).
Acts 1969, ch. 270, § 3; T.C.A., § 56-3803; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-104 - Surplus lines agent's license

(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.
(b)
Every license issued pursuant to this section shall be for a twenty-four month term. A license fee in the amount of one hundred 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.
(c)
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.
(d)
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.
(e)
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
.
Amended by 2018 Tenn. Acts, ch. 580, s 1, eff. 3/16/2018.
Acts 1969, ch. 270, § 4; T.C.A., § 56-3804; Acts 2001, ch. 333, § 5; 2011 , ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-105 - Eligibility for surplus lines insurance

(a)
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.
(b)
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.
(c)
Policy or contract forms shall not be eligible unless the use:
(1)
Is reasonably necessary for the principal purposes of the coverage;
(2)
Would not be contrary to the purposes of the coverage; or
(3)
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.
(d)
The following kinds of insurance shall not be eligible for surplus lines insurance:
(1)
Primary personal automobile liability;
(2)
Surety; and
(3)
Workers' compensation, except as provided in subsection (a).
Acts 1969, ch. 270, § 5; T.C.A., § 56-3805; Acts 2001, ch. 220, §§ 2, 3; 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-107 - Requirements for surplus lines contracts

(a)
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.
(b)
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.
Acts 1969, ch. 270, § 7; T.C.A., § 56-3807; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-109 - Unauthorized insurers

(a)
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.
(b)
No unauthorized insurer shall be or become an eligible surplus lines insurer, unless:
(1)
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:
(A)
The unauthorized insurer has capital and surplus or its equivalent under the laws of its domiciliary jurisdiction which equals the greater of:
(i)
The minimum capital and surplus requirements under the law of this state; or
(ii)
Fifteen million dollars ($15,000,000); or
(B)
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
(2)
The unauthorized insurer is not a United States domiciled insurer but is listed by the NAIC International Insurers Department.
(c)
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.
(d)
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.
Acts 1969, ch. 270, § 9; T.C.A., § 56-3809; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-110 - Validity of contracts

(a)
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.
(b)
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.
Acts 1969, ch. 270, § 10; T.C.A., § 56-3810; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-111 - Liability of surplus lines insurer for losses and unearned premiums

(a)
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.
(b)
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.
Acts 1969, ch. 270, § 11; T.C.A., § 56-3811; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-112 - Actions against insurer - Service of process

(a)
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.
(b)
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.
(c)
This section shall be cumulative to any other methods that may be provided by law for service of process upon the insurer.
Acts 1969, ch. 270, § 12; T.C.A., § 56-3812; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-114 - Advertising

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.
Acts 1969, ch. 270, § 14; T.C.A., § 56-3814; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-115 - Commissions

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.
Amended by 2018 Tenn. Acts, ch. 580,s 3, eff. 3/16/2018.
Acts 1969, ch. 270, § 15; T.C.A., § 56-3815; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-116 - Keeping of records

(a)
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:
(1)
Amount of the insurance and perils insured against;
(2)
Brief general description of property insured and where located;
(3)
Gross premium charged;
(4)
Return premium paid, if any;
(5)
Rate of premium charged upon the several items of property;
(6)
Effective date of the contract and its terms;
(7)
Name and post office address of the insured;
(8)
Name and home office address of the insurer;
(9)
Amount collected from the insured; and
(10)
Other information as required by the commissioner.
(b)
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.
Acts 1969, ch. 270, § 16; T.C.A., § 56-3816; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 14 - SURPLUS LINES INSURANCE (§§ 56-14-101 — 56-14-117) › Part 1 - SURPLUS LINES INSURANCE ACT (§§ 56-14-101 — 56-14-117) › Section 56-14-117 - Violations and penalties

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).
Acts 1969, ch. 270, § 17; T.C.A., § 56-3817; Acts 2011, ch. 446, § 1.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-101 - General powers - Right to become sureties - Banking business prohibited

Fidelity or bonding corporations have the power to execute as surety, and guarantee the performance of:
(1)
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;
(2)
All bonds and obligations required to be executed in the course of judicial proceedings in any of the courts of the state; and
(3)
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.
Acts 1895, ch. 113, § 2; Shan., § 2213; mod. Code 1932, § 3945; modified; T.C.A. (orig. ed.), § 56-1401; Acts 1989, ch. 591, § 113.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-102 - Guaranty corporation may become sole surety on bonds

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.
Acts 1895, ch. 175, § 1; Shan., § 2214; Code 1932, § 3946; T.C.A. (orig. ed.), § 56-1402.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-103 - Condition of doing business - Attorney upon whom may be served process against 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
.
Acts 1895, ch. 175, § 2; Shan., § 2215; mod. Code 1932, § 3947; Acts 1967, ch. 240, § 1; impl. am. Acts 1971, ch. 137, § 2; T.C.A. (orig. ed.), § 56-1403.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-104 - Conditions for beginning business - Filing charter and statement of assets and liabilities - License

(a)
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.
(b)
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.
Acts 1895, ch. 175, § 3; Shan., § 2216; mod. Code 1932, § 3948; Acts 1967, ch. 240, § 2; impl. am. Acts 1971, ch. 137, § 2; T.C.A. (orig. ed.), § 56-1404.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-106 - Commissioner is custodian of securities deposited by bonding companies

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.
Acts 1913 (1st E.S.), ch. 33, § 1; Shan., § 2222a1; mod. Code 1932, §3955; impl. am. Acts 1971, ch. 137, § 2; T.C.A. (orig. ed.), § 56-1406.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-107 - Sworn financial statements to be filed quarterly - Revocation of authority to do business to be mailed and published

(a)
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
.
(b)
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.
(c)
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.
Acts 1895, ch. 175, § 4; Shan., § 2217; mod. Code 1932, § 3949; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 56-1407.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-108 - Unlawful to write policies except through resident agents

(a)
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.
(b)
This section does not apply to bid bonds issued by the corporation in connection with any public or private contract.
Acts 1919, ch. 163, § 1; Shan. Supp., § 2216a1; mod. Code 1932, § 3956; Acts 1963, ch. 24, § 1; T.C.A. (orig. ed.), § 56-1408.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-109 - Signing policy in blank unlawful

It is unlawful for the resident agent to sign the policy in blank.
Acts 1919, ch. 163, § 2; Shan. Supp., § 2216a2; Code 1932, § 3957; T.C.A. (orig. ed.), § 56-1409.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-110 - Power of commissioner as to violations

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.
Acts 1919, ch. 163, § 3; Shan. Supp., § 2216a3; Code 1932, § 3958; impl. am. Acts 1971, ch. 137, § 2; T.C.A. (orig. ed.), § 56-1410.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-111 - Revocation of license for violation

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
.
Acts 1919, ch. 163, § 4; Shan. Supp., § 2216a4; Code 1932, § 3959; T.C.A. (orig. ed.), § 56-1411.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-112 - Action against company - Jurisdiction - Venue

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.
Acts 1895, ch. 175, § 5; Shan., § 2218; Code 1932, § 3950; T.C.A. (orig. ed.), § 56-1412.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-113 - Action against company - Estopped to deny liability

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.
Acts 1895, ch. 175, § 7; Shan., § 2220; Code 1932, § 3952; T.C.A. (orig. ed.), § 56-1413.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-114 - Forfeiture of license for nonpayment of judgment

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.
Acts 1895, ch. 175, § 6; Shan., § 2219; mod. Code 1932, § 3951; T.C.A. (orig. ed.), § 56-1414.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 15 - FIDELITY AND BONDING COMPANIES (§§ 56-15-101 — 56-15-115) › Section 56-15-115 - Noncompliance with chapter - Penalty

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.
Acts 1895, ch. 175, § 8; Shan., § 2221; Code 1932, § 3953; T.C.A. (orig. ed.), § 56-1415.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 16 - EXCHANGE OR RECIPROCAL INSURANCE ACT OF 1990 (§§ 56-16-101 — 56-16-210) › Part 1 - EXCHANGE OR RECIPROCAL INSURANCE (§§ 56-16-101 — 56-16-119) › Section 56-16-101 - Short title - Applicability

(a)
This chapter shall be known and may be cited as the "Exchange or Reciprocal Insurance Act of 1990."
(b)
This chapter shall apply to all reciprocals and reciprocal insurance as defined in §
56-16-102
.
Acts 1990, ch. 728, § 1; T.C.A. §
56-16-201
.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 16 - EXCHANGE OR RECIPROCAL INSURANCE ACT OF 1990 (§§ 56-16-101 — 56-16-210) › Part 1 - EXCHANGE OR RECIPROCAL INSURANCE (§§ 56-16-101 — 56-16-119) › Section 56-16-102 - Definitions

(a)
As used in this title, unless the context otherwise requires:
(1)
"Reciprocal" means the aggregation of subscribers under a common name; and
(2)
"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.
(b)
As used in this chapter, unless the context otherwise requires:
(1)
"Attorney" means the person designated and authorized by subscribers as the attorney-in-fact having authority to obligate them on reciprocal insurance contracts;
(2)
"Commissioner" means the commissioner of commerce and insurance;
(3)
"Department" means the department of commerce and insurance;
(4)
(A)
"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
(B)
"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
(5)
"Subscriber" means a person obligated under a reciprocal insurance agreement.
Acts 1990, ch. 728, § 2; T.C.A. §
56-16-202
.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 16 - EXCHANGE OR RECIPROCAL INSURANCE ACT OF 1990 (§§ 56-16-101 — 56-16-210) › Part 1 - EXCHANGE OR RECIPROCAL INSURANCE (§§ 56-16-101 — 56-16-119) › Section 56-16-103 - Licensed reciprocal authorized to write certain classes of insurance

A reciprocal licensed to transact the business of insurance in this state may write the classes of insurance enumerated in §
56-2-101
.
Acts 1990, ch. 728, § 2; T.C.A. §
56-16-203
.
2023 Tennessee Code › Title 56 - INSURANCE (§§ 56-1-101 — 56-61-125) › Chapter 16 - EXCHANGE OR RECIPROCAL INSURANCE ACT OF 1990 (§§ 56-16-101 — 56-16-210) › Part 1 - EXCHANGE OR RECIPROCAL INSURANCE (§§ 56-16-101 — 56-16-119) › Section 56-16-104 - Applicable laws

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.
Acts 1990, ch. 728, § 2; T.C.A. §
56-16-204
.