Property and Casualty Laws TN

Exception Workers' Compensation

A Workers' Compensation insurer may apply to the Commissioner for approval of a deductible plan that allows the insurer, for at least 1 year, to be reimbursed by the policyholder. Such reimbursement must be applied to the rates, premiums, or both that are produced by the rating system.

Compensation

A commission or other valuable consideration for transacting insurance business, received by an unlicensed person who is required to be licensed. Both the payor and the payee may be held accountable for illegal compensation. The term does not include the following: Renewal or other deferred commissions paid to an unlicensed person who was licensed when the business was transacted Compensation from an insurer or a producer to creditors, unless the payment involves making a false statement or entry Compensation that does not exceed $25, for a referral by an unlicensed person

Loss by Fire

A company may not be held liable beyond the actual value of a property at the time of partial or total loss by fire. If the insured has paid premiums on over insurance, the insured must be reimbursed for the portion of the premium for the excess insurance, with at least 6% per annum interest.

Business Entity

A corporation, association, partnership, limited liability company, limited liability partnership, or other legal entity.

Credit Information

Any credit-related information from a credit report or from a personal insurance application.

Consumer Reporting Agency

Any entity that, for a profit, assembles or evaluates consumer credit or other information to provide consumer reports to third parties.

Fiduciary

Any money that an insurance producer receives for insurance transactions shall be held in a fiduciary capacity and shall not be misappropriated, converted or improperly withheld. Any violation of this duty shall be considered grounds for the denial, suspension, or revocation of the insurance producer's license and for imposing other penalties.

Resident/Nonresident

A nonresident producer may receive a Tennessee producer license if: The person meets licensure requirements for residents of Tennessee The person is licensed and in good standing in his/her home state The person submits the required license application and license fee, and a copy of his/her license application for his/her home state (or a uniform application). Applicants should allow 30 days for the application to be reviewed, processed and approved. The person's home state awards licenses to residents of this state on the same basis A nonresident surplus or limited lines producer who meets these requirements shall, if licensure is approved, receive a resident surplus or limited lines producer license, respectively. Any change of address must be reported to the Commissioner within 30 days.

Notice of Eligibility for Assigned Risk Plan

A notice of cancellation or nonrenewal, other than for nonpayment of premium, must notify the named insured of his/her possible eligibility for auto liability insurance through the auto assigned risk plan.

Limited Lines Producer

A person authorized by the Commissioner to sell, solicit, or negotiate limited lines insurance.

Insurance Producer

A person required by the laws of Tennessee to be licensed to sell, solicit, or negotiate insurance.

Cancellation of Commercial Risk Insurance

A policy in effect for at least 60 days, or a renewal policy, may be cancelled: For fraud or material misrepresentation For failure to comply with written loss control recommendations For material increase in risk If continuing the policy could result in the insuring company's insolvency, as determined by the Commissioner If continuing the policy could result in the insurer violating state insurance laws For the insured's violation of any policy terms or conditions For other reasons, as approved by the Commissioner The insured being convicted of a crime that results in increasing any hazard insured against The named insured's conviction of a crime that resulted in the increase of a hazard Nonpayment of premium, including nonpayment of any additional premiums that are justified by a physical change in the property or a change in its occupancy or use The cancellation notice must: Be mailed to the named insured at the address shown in the Declarations Provide at least 10 days' notice of cancellation State the reason(s) for cancellation Inform the insured that upon written request, the facts upon which the reasons for cancellations were based will be provided

Exceptions to Licensing

A producer's license is not required of the following: An officer, director or employee of an insurer or of an insurance producer, provided that such person does not receive any commission on policies written or sold A person who obtains and furnishes information for group policies or for the purpose of: Enrolling individuals and issuing certificates under such plans; or Performs administrative services related to mass marketed property and casualty insurance No commission may be paid for these services. An employer or association, its officers, directors, employees, or the trustees of an employee trust plan, to the extent that such persons are engaged in an employee benefit plan's administration or operation and are not being compensated 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 Tennessee are limited to advertising without the intent to solicit insurance, but whose distribution is not limited to residents of this state. The person must not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in Tennessee. A person who is not a resident of Tennessee who sells, solicits or negotiates commercial property and casualty risks to an insured with risks in multiple states, provided that the person is otherwise licensed as an insurance producer in the state where the insured maintains its principal place of business A salaried full-time employee who counsels or advises his employer regarding the employer's insurance interests, 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. The only allowable compensation is awards or merchandise of nominal value. An officer, director, or employee of a vehicle rental company engaged in the sale, solicitation, or negotiation of vehicle rental insurance to be in effect for no more than 90 days. Motor vehicle or rental vehicle means a private passenger motor vehicle, including: Passenger/mini vans and sport utility vehicles Cargo motor vehicle, including cargo vans, pickup trucks, and trucks with a gross vehicle weight of less than 26,000 lbs. An officer, director, employee, or authorized representative of a business entity engaged in the sale, solicitation, or negotiation of portable electronics insurance and/or self-service storage insurance

License Renewal

A resident producer may receive a license in one or more of the following lines of insurance: Life Health Property Casualty Variable life and variable annuity products Personal lines Credit Any other line of authority permitted by law A license is valid for 24 months unless revoked or suspended. An individual's license expires on the last day of the licensee's birth month. A business entity's license expires biennially on March 1. To renew a license, a producer must: Pay a renewal fee Submit a renewal form Complete all continuing education requirements A lapsed license may be reinstated within 12 months from the renewal fee's due date, without taking an exam, by paying the reinstatement fee (which is twice the renewal fee). A licensed insurance producer unable to comply with the license renewal procedures due to military service or some other extenuating circumstance, like a long-term medical disability, can 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. A license must state: The licensee's name, address, and producer number The lines of authority for which the producer is authorized to transact insurance business The dates of issuance and expiration Any other information required by the Commissioner

Sinkhole

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.

Workers' Compensation Definitions

Administrator - The chief administrative officer of the Workers' Compensation division of the labor department. AMA Guides - The most recent edition, as of January 1st, yearly, of the American Medical Association Guides to the Evaluation of Permanent Impairment. Average Weekly Wages - The earnings and other valuable compensation of the injured employee for the previous 52 weeks divided by 52, or, if only briefly employed, the earnings of an employee in the same occupation, and either under the same employer or, if no such employee exists, in the same area, for the previous 52 weeks divided by 52. Benefit Review Conference - An informal dispute resolution proceeding to resolve Workers' Compensation disputes. Case Management - Medical case management or medical care services provided to an injured or disabled employee on all cases where medical care expenses are expected to exceed a threshold. Construction Design Professional means: Any person licensed, or legal entity authorized, to practice architecture, engineering, landscape architecture, or land surveying in Tennessee Any person, firm, or corporation providing interior space planning or design in Tennessee Employee - Every person, including minors, in the service of an employer, including: The employee's legal representatives, dependents, and other persons to whom Workers' Compensation benefits may be payable if the employee is dead A sole proprietor or partner working full time who files written notice, within 30 days before any injury or death, with the Workers' Compensation Division that he/she is an employee. Coverage may not be denied solely for failure to provide such notice Employer - Any person, business entity, or association, or trustee or legal representative thereof, using the services of at least 5 persons for pay; 1 person for pay if mining and producing coal. The term includes the employer's insurer unless otherwise excluded. Injury - An accidental injury arising out of and in the course of employment which causes the employee's death or disablement, including occupational diseases and mental injuries. Maximum Total Benefit - The aggregate total of employee benefits. Beginning July 1, 2009, the maximum amount available is 400 weeks times the state's average weekly wage, except in cases of permanent total disability. Temporary total disability payments are not included in the maximum total benefits. Maximum Weekly Benefit - The weekly limit of employee compensation. The benefit amount is 66 2/3% of the employee average weekly wages, up to 110% the state average weekly wage. The state wage is determined annually by the Workers' Compensation Division on January 1st and effective July 1st. This percentage is subject to annual change.

Rates

All insurers must file all rates, rate information, policy forms and endorsements with the Commissioner at least 30 days before their intended date of use. If the Commissioner cannot adequately consider the filing within 30 days, he/she may give written notice to the insurer that more time is needed. Such additional time shall not exceed 30 days from the date of the notice. Upon written application by the insurer, the Commissioner may authorize rates to be effective before the 30 day waiting period expires. In such cases, a filing shall be deemed to become effective unless disapproved by the Commissioner before the 30-day waiting period expires.

Property Inspection

An agent must personally inspect the property within 90 days after a policy is written. If an agent fails to appraise an insured property within 90 days, and if a loss occurs, the value shown in the policy or application must be the value upon which a settlement is based.

Nonrenewal

An insurer that intends to cancel or nonrenew a personal risk policy must give a named insured a notice of cancellation or nonrenewal at least 30 days before the policy expires. Cancellation of auto policies requires 20 days' advance notice, but nonrenewal requires 30 days. Reason for Cancellation or Nonrenewal A nonrenewal notice must do one of the following: State the reason for nonrenewal Advise the named insured that the insurer must state the reason for nonrenewal within 20 days after receiving a request for such information, if the request is made within 15 days after the effective date of nonrenewal

Restrictions on Use of Credit Scores

An authorized insurer cannot: Take adverse action based on a credit score more than 90 days old Use the following as negative factors in underwriting or rating personal insurance: Inquiries by the consumer into his/her own credit Inquiries relating to insurance coverage Multiple lender inquiries from the home mortgage industry within any 30-day period, unless by the same party Multiple lender inquiries from the auto rental industry within any 30-day period, unless by the same party Medical accounts sent to collections Deny, cancel, or nonrenew a personal insurance policy solely on the basis of credit information Base renewal rates for a personal insurance policy solely on credit information Take adverse action solely because a consumer does not have credit Consider an absence of credit information as a negative or positive factor in underwriting or rating Use an insurance score that is calculated using the consumer's income, gender, address, ethnic group, religion, marital status, nationality, education, or occupation as a factor; this prevents the indirect use of these factors in underwriting and is not intended to prevent their direct use in underwriting Use credit information unless no later than 36 months following the last time 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 rule if: The insured is in the insurer's most favorably-priced tier 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 to re-evaluate the insured upon renewal; or If the insurer annually notifies the insured of his/her right to voluntarily request that his/her insurance credit score be rerun and re-evaluated based on the current information available for the next effective renewal date of the insured's policy. An insurer need not recalculate the insurance score or obtain the updated credit report of a consumer more frequently than once every 12 months.

Coverage Requirements

An auto liability policy issued in Tennessee must include uninsured motorist coverage equal to the policy's limit of liability for bodily injury, unless the named insured either rejects uninsured motorist coverage in writing or selects lower coverage limits. Once rejected, the insurer does not need to offer the coverage again unless the insured requests it in writing. An excess or umbrella policy is not required to offer uninsured or underinsured motorist coverage. If an insured is injured while not occupying an auto, the uninsured motorist coverage for the vehicle with the highest uninsured motorist coverage limits applies. Only one policy may provide primary coverage. If an insured is injured while occupying an automobile he/she does not own, then uninsured motorist coverage will apply in the following policy order: The policy covering the vehicle in which the insured was occupying shall be primary The policy where the injured person is a named insured will assume coverage if the primary policy's limits are exhausted. If the injured person is a named insured on more than one policy, only the policy with the highest limits will apply. The policy under which the injured person is covered other than as a named insured. If the injured is so covered under more than one policy, only the policy with the highest limits shall apply. In no instance will the insured be entitled to receive total benefits from applicable policies in an amount greater than the limits of the policy providing the highest limits of uninsured motorist coverage. In other words, policy benefits cannot be "stacked." An insured must be given an opportunity to include uninsured motorist property damage. An insurer may limit such coverage to the amount of property damage provided by the policy. To recover under uninsured motorist coverage, an insured must identify the owner or driver of the uninsured motor vehicle, unless all of the following conditions are met: Actual physical contact occurs between the uninsured auto and the person or property of the insured, or the existence of the unknown motorist is established by evidence not provided by an occupant of the covered auto The accident is reported to the appropriate law enforcement agency within a reasonable time The insured attempts to determine the auto's or driver's identity at the time of the accident An insurer may not increase the rate or premium of an insured, nor cancel coverage, solely because a claim is paid under uninsured motorist coverage. Uninsured motorist coverage forms may include restrictions as necessary to avoid duplication of insurance and benefits. If a driver who caused an accident or injury fails to file the required forms within 90 days of the accident, it will be presumed that he/she was uninsured at the time of the accident.

Grounds for Cancellation of a personal Auto Insurance Policy

An initial policy in effect at least 60 days may be cancelled only for one or more of the following reasons: Material misrepresentation or nonpayment of premium, such as failing to disclose any accidents or moving violations within the previous 36 months or omitting necessary underwriting information Any insured's violation of the policy's terms or conditions Submitting, or knowingly abetting in the submission of, a false or fraudulent claim If, after the effective date of coverage, the insurer rejects, within 60 days, an application to extend coverage to a person not listed on the original application Suspension or revocation of an insured's driver's license or a covered auto's registration, within the previous 36 months The commission of the following offenses during the 36 months preceding the policy effective date: Felony Driving a vehicle while under the influence of, or intoxicated by drugs or alcohol Negligent vehicular homicide 3 violations within 36 months Alterations to the insured auto increases risk, is used as an authorized emergency vehicle, or subject to an inspection law, has not been inspected or has failed an inspection Leaving the scene of an accident without stopping to report it Theft of a motor vehicle Making false statements in a driver's license application Forfeiture of bail for the previous 8 items Nonpayment of premium

Nonrenewal Commercial Risk Insurance

An insurer nonrenewing a policy must either send a nonrenewal notice at least 60 days before the end of the policy period, or extend the existing policy for 60 days from the date the notice is provided (and charge a pro rata premium for the extension. A nonrenewal notice is not required if the insurer has offered to issue a renewal policy, or if the named insured has replaced, or has agreed in writing to replace, coverage. An insurer that provides a nonrenewal notice and extends the policy for more than 90 days must provide an additional nonrenewal notice with respect to the extension. A term of 1 year is the standard for any commercial risk policy written for a term of 1 year or less. Any commercial risk policy written for a term longer than 1 year or no fixed expiration is considered as written for 1 year policy periods or terms.

Unauthorized Insurer

An insurer not authorized by the Tennessee Insurance Division to transact insurance business in Tennessee. A person transacting insurance business for an unauthorized insurer shall be held personally liable for such business.

Incorrect or Incomplete Credit Information

An insurer that receives notice from a consumer reporting agency that information provided was incomplete or incorrect, and if that information was used for underwriting or rating purposes, that consumer's policy must be re-underwritten or re-rated within 30 days and repay overpaid premiums for the actual policy period, up to 12 months.

Minimum Limits Not Increased

An insurer is not required to increase its uninsured motorist limits if an insured is in an accident with a person covered under a policy with higher limits or the insured's limits are higher than the required minimum. The insurer's forms of coverage may include terms, exclusions, limitations, conditions, and offsets that are designed to avoid duplication of insurance and other benefits.

Noncancellable and guaranteed renewable contract

An insurer licensed to write auto liability insurance in Tennessee may issue an auto liability policy only if it is noncancellable and if it is guaranteed renewable as long as: The insurer remains licensed to write auto liability insurance All drivers of the insured auto maintain their driver's licenses Premiums are paid when due The insured auto is used for a purpose for which a valid rate has been approved by the Commissioner; auto policies usually exclude coverage for an auto used primarily as a residence and for an auto being used to commit a crime An insurer that issues policies only to its members may make continued membership a condition for policy issuance or renewal. An insurer, however, may cancel or nonrenew a policy if the Commissioner withdraws approval of the policy's rate.

Subrogation

An insurer making a payment under uninsured motorist coverage is entitled recover the payment from the proceeds of any settlement or judgment against the liable party, including proceeds recoverable from the assets of an insolvent insurer.

Notice of Cancellation

An insurer must give an insured at least 20 days' written notice of cancellation if the policy is an initial policy that has been in effect 60 days or more. If the policy has been in effect for less than 60 days or if cancellation is due to nonpayment of premium, then at least 10 days' advance notice must be given. If a cancellation notice does not state the reason for cancellation, it must state that the insurer must state the reason for cancellation within 15 days, upon request.

Notice of Nonrenewal

An insurer must give an insured at least 30 days' notice of its intent not to renew a policy. A nonrenewal notice must state the reason for nonrenewal or that the insurer must provide the reason(s) for nonrenewal within 20 days after receiving a written request for such information, if the request is made within 15 days after the nonrenewal's effective date.

Rates Commercial Risk Insurance

An insurer must give the named insured at least 60 days' notice of its intent to increase rates by more than 25%. An insurer that fails to provide this notice must extend the existing policy for 60 days from the date the notice is provided (and charge a pro rata premium for the extension).

Indemnification

An insurer must have a hold-harmless agreement with its producers for errors and omissions resulting from using credit information, if the producer follows the insurer's instructions and complies with applicable laws

Notice to Consumer Adverse Action

An insurer must provide to the consumer the specific reasons for taking adverse action based on credit information (up to 4). The use of terms like "poor credit history," "poor credit rating," or "poor insurance score" do not meet the explanation requirements of this section. Consumer reporting agency or other third party vendor standardized credit explanations are acceptable.

Fair Value

An insurer, officer or agent must issue insurance on the fair value of a property; issuing overinsurance (insurance exceeding the actual value) is prohibited.

Land Stabilization

Any repair technique intended to replace, rebuild, stabilize, or restore the land including any repair technique designed to compensate for or prevent land instability.

Credit Report

Any written, oral, or other communication of information by a consumer reporting agency about a consumer's credit that is used to determine personal insurance premiums, eligibility, or tier placement.

Agency Contracts/Termination

Appointment A producer must be appointed by an insurer to act as the insurer's agent. A producer may place excess or rejected risks with an authorized insurer without being appointed, if the appointing insurer writes such insurance. To appoint a producer, an insurer must: File a notice of appointment within 15 days from the date a producer either is appointed or submits the first insurance application Pay a quarterly appointment fee for the duration of the producer's contract The Commissioner must: Verify, within 30 days, that a producer is eligible for appointment Notify an insurer within 5 days of determining that a producer is ineligible for appointment To place insurance with a residual market mechanism, a producer must: Have an appointment or agreement with an insurer that writes such insurance Make a diligent effort to place the insurance with an insurer An insurer that accepts an application from, or pays a commission to, a producer or limited lines producer is deemed to have appointed such producer. An unlicensed person who illegally solicits an insurance policy on behalf of an insurer is responsible for performing the duties of a producer and for all liabilities and penalties of a producer. Termination An insurer or its representative that terminates a producer's appointment must: Notify the Commissioner within 30 days after the termination's effective date State the cause for termination, if the cause is also ground for license suspension or revocation Pay a termination fee Notify the Commissioner of any information pertinent to the termination that is discovered after the fact Mail a copy of the initial termination notice to the producer within 15 days after the notice has been provided to the Commissioner A terminated producer may file written comments about his/her termination notice with the Commissioner, and send a copy of those comments to the insurer. Such comments must be filed within 30 days after receiving the termination notice. Immunity A person providing information to the Commissioner without malice is immune from liability for providing the information. Confidentiality Any information furnished to the Department or Commissioner by an insurer, producer, or employee or agent of an insurer or a producer is confidential and may not be subpoenaed. The Commissioner may share information with other state, federal, and international regulatory or law enforcement agencies or the NAIC, if such agency agrees to keep the information confidential. The Commissioner may receive information from other state, federal, and international regulatory or law enforcement agencies, or the NAIC, if the Commissioner keeps the information confidential. Penalties An insurer, its representative, or a producer that fails to report termination information required by the Commissioner, or that is found guilty of falsely reporting such information with actual malice, may, after notice and hearing, have its license or Certificate of Authority suspended or revoked. In addition to, or in lieu of, suspension or revocation, the Commissioner may impose a fine of $100 to $1,000 per violation.

Accident Prevention Course

Auto insurance policy rates and premiums must provide for reductions effective for 3 years if the drivers are over 55 years of age and successfully complete an approved auto accident prevention class or online courses. Courses must provide 8 hours of instruction in class or an online course approved by the Commissioner. This requirement does not apply to: Fleet autos An auto for which the rate has been increased because of a claim, or for which the driver has violated an auto law of Tennessee, or had his/her license suspended or revoked, within the past 3 years An auto whose driver is required by a court to take a defensive driver training course Motorcycle - Insurers must provide a 10% premium discount for motorcyclists who have completed an approved rider training course. The discount will be applied for 3 years and may take effect upon course completion or, at the insurer's election, at the next policy renewal.

Personal Insurance

Auto, homeowners, motorcycle, dwelling, boat, personal watercraft, and recreational vehicle policies written for personal, family, or household use.

Other Unfair Trade Practices

False Statements and Entries - Knowingly filing with any public official, or knowingly making or placing before the public, any material misstatement about a person's financial condition or business. Also included is the deliberate omission of true and material facts with the intent to deceive. Stock Operations and Advisory Board Contract - Issuing or delivering capital stock in an agency, benefit certificates or shares in a corporation, or securities, special or advisory board contracts, or other contracts promising returns and profits, as an inducement to buy insurance. Lessening Competition by Stock Transaction - Acquisition, by a domestic insurer in Tennessee, of share capital of a competitor selling the same type or class of insurance, if the acquisition results in decreased competition between the 2 insurers, restrains commerce, or creates a monopoly. (This does not prohibit the purchase of such stock solely for investment purposes.) Dual Office Holding - Holding, by an individual, of office as a director of at least 2 domestic insurers of Tennessee at the same time, if the insurers are engaged in the same business and if the insurers are or were competitors, so that a non-competition agreement between the insurers would violate any United States or Tennessee anti-trust law. Unfair Utilization of Proprietary Information - With respect to a policy underwritten in a pool, residual market mechanism, joint underwriting authority, or assigned risk plan) using any information, contained in an application and/or obtained while such policy is being serviced in any manner, to solicit any form of insurance, unless the Commissioner has granted permission to use such information on any specific risk. Unfair Replacement Transaction Practices - Replacing a life policy or an annuity other than as allowed by law. Issuing Declinations of Accident and Health Coverage - (With respect to any licensed agent) issuing a letter declining such insurance to a consumer without underwriting the risk according to the insurance provider's insurability guidelines. An agent is not required to issue a letter of declination for such insurance in order to make the applicant eligible for TennCare. Failure to Provide Claims History - Failure of a company to provide loss information for the 3 previous policy years to the first named insured within 30 days after receiving the first named insured's written request. Disclosure of Nonpublic Personal Information - Because of the Gramm-Leach-Bliley Act of 1999, personal information must be kept private and not be disclosed without the person's written permission. The Commissioner shall impose civil penalties against, or revoke or suspend the license of, a person who violates this section only when the violation was intentional or committed in sufficient number as to indicate a lack of due diligence. Sales to Members of the Armed Forces - 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. Failure to Maintain Marketing and Performance Records - Insurers must keep all books, records, documents and other business records accurate and up to date so that such information is accessible and retrievable for examination by the Commissioner. Data for at least the current calendar year and the 2 preceding years shall be maintained. Failure to Maintain Complaint Handling Procedures - Insurers must keep a complete record of all the complaints received since its last examination date. Complaint records shall include: 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 Misrepresentation in Insurance Applications - Making false or fraudulent statements or representations on a policy application, just to receive a monetary or other benefit from any provider or individual person. Failure to File or to Certify Information Regarding the Endorsement or Sale of LTC Insurance - Insurers must file the following with the Commissioner regarding the sale of long-term care insurance: The policy and certificate A corresponding outline of coverage and All advertisements requested by the insurance department Inquiry by Homeowner's Insurance Policyholder - No insurance company can increase a premium or cancel a homeowner's insurance policy solely on the basis of an inquiry/inquiries by an insured regarding the his/her homeowner's policy or a loss under the policy.

Adverse Action

Denial or cancellation of, increase in charge for, or unfavorable change in the terms or amount of any personal insurance.

Prelicensing Education

Each person applying for a license to transact insurance business in Tennessee must complete 20 credit hours of prelicensing education per line of authority for the lines of life, health, property, and casualty. The following persons are exempt from the pre-licensing education requirements: Holders of professional designations related to life, accident and health lines of authority. These include but are not limited to: Chartered Life Underwriter (CLU), Certified Insurance Counselors (CIC), Fellow of Life Management Institute (FLMI), or Life Underwriter Training Council Fellow (LUTCF). Persons having earned an insurance degree from an accredited college or university for all lines of authority

Boycotting, Coercion, and Intimidation

Entering into an agreement to commit an act or boycott, coercion, or intimidation resulting in, or tending to result in, unreasonable restraint of, or monopoly in, the insurance business.

Guidelines for Sinkhole Loss Coverage

Every insurer offering homeowner property insurance in Tennessee must 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. Sinkhole loss coverage is not automatically included in any homeowner property insurance policy, but the coverage must be available for optional purchase. 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, an insurer must meet the following investigation standards: An inspection of the premises must be made to determine if there has been structural damage resulting from possible sinkhole activity If, upon the investigation, the insurer determines that there is no sinkhole loss, the insurer may deny the claim If, there is structural damage but the insurer concludes that such damage is inconsistent with sinkhole activity then, prior to denying the claim, the insurer shall obtain a written certification from a qualified individual stating that the damage under the claim was not caused by sinkhole activity If the insurer obtains written certification and if the policyholder has submitted the sinkhole claim without good faith grounds, the policyholder shall reimburse the insurer for 50% of the analysis and certification cost. However, a policyholder will not be required to reimburse an insurer more than $2,500 with respect to any claim. Further, the insurer must inform the policyholder of his/her potential liability for reimbursement and give the policyholder the opportunity to withdraw the claim. The insurer may limit its total claims payment to the actual cash value of the sinkhole loss, excluding costs associated with building stabilization or foundation repair. Once the policyholder enters into a contract for building stabilization or foundation repairs in accordance with the recommendations of the engineer retained or approved by the insurer, these exclusions will also be covered. This contract must be in effect within 90 days after the insured is notified that the sinkhole loss coverage is confirmed. Once the contract is in effect, the insurer must pay the amounts necessary to begin the work and will pay as the work is performed and expenses are incurred. The insurer may not require the policyholder to advance payment for covered repairs. Without the insurer's prior written consent, the policyholder may not accept anything of value from any person proposing to perform the repairs as an inducement to obtain the repair contract. The stabilization and all other repairs to the structure and contents must be completed within 12 months after the contract becomes effective, 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 12 months because of reasons beyond the policyholder's control If the covered building cannot be repaired or if the cost of repair exceeds policy limits, the terms and conditions relative to losses in excess of policy limits will apply. 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 insurer's approved plan of repair and within the required time constraints; or Is subject to the risk of future sinkhole damage because of unstable land Insurers are not required to more than one policy limit for one policy loss due to a covered sinkhole loss. Insurers may offer coverage that is broader or more extensive than the offer of coverage required by statute.

Commercial Risk Rates

Except as provided in paragraph 2 below, every commercial risk insurer shall file with the Commissioner all rates, supplementary rate information, policy forms and endorsements, no later than 15 days after the effective date. Such information need not be filed for inland marine risks that by business's general custom are not written according to manual rules of rating plans. Upon the Commissioner's request, supporting information shall also be filed. The Commissioner may, after a hearing, disapprove any policy form or endorsement already in effect if it does not comply with the law or if it contains any provision that is unfair, deceptive or misleading. The insurer must be given at least 20 days' advance notice of the hearing. The disapproval order shall specify the Commissioner's reasons for his/her findings and the date, not less than 30 days after the order is issued, when the disapproval is effective. After that date, it shall be unlawful for the insurer to use the form or endorsement in Tennessee. With respect to Workers' Compensation insurance, a rate service organization designated by one or more insurers shall develop and file for approval with the Commissioner, prospective loss costs, supporting actuarial and statistical data for Workers' Compensation insurance. Each Workers' Compensation insurer shall individually file with the Commissioner the multiplier and supporting information no later than 15 days after the effective date, and at least annually by March 1.

Penalties

If after notice and a hearing the Commissioner finds that any person has violated any statute, rule or order, he/she can order: The person to cease and desist from engaging in the violating act or practice. Payment of a penalty of not more than $1,000 for each violation, but not to exceed an aggregate penalty of $100,000. This shall not apply where a statute or rule specifically provides for other civil penalties for the violation. Each day of continued violation shall constitute a separate violation; and The suspension or revocation of the person's license. If the person knowingly commits a violation, the penalty may be up to $25,000 per violation, not to exceed a total penalty of $250,000. In determining the amount of penalty to assess, the Commissioner will consider: Whether the person could reasonably have interpreted his/her actions to be in compliance with the 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 The interest of the public; and The person's efforts to rectify the violation

Insolvency Protection Limitation

If an insurer becomes insolvent within 1 year after an accident for which it represents the party at fault, the injured party's uninsured motorist coverage, if any, must cover any unpaid claims resulting from the accident

Temporary License

If the Commissioner deems the issuance of a temporary license to be in the public interest, he/she may issue a temporary license for up to 180 days, without requiring an exam, to the following as necessary to service an insurer: The surviving spouse or the representative of a decedent or disabled producer If a producer is entering the United States armed forces, that producer's designee Other parties if not prohibited by law The Commissioner may require that a person have a suitable sponsor to receive a temporary license. The sponsor must be a licensed producer or an insurer who will assume full responsibility. A temporary license may not be continued once the business the licensee represents no longer exists.

Defamation

Making or placing before the public any statement which is false, or maliciously critical of or derogatory to any person's financial condition, with intent to injure the person.

Automobile Liability Insurance Primary Coverage

In all cases involving an insured motor vehicle, the owner's policy is primary if the vehicle is being operated with the owner's permission and within the scope of the permission granted. Any other coverages that may be available to the permittee will not apply until the limits of the owner's policy are exhausted. However, if the only insurance coverage provided by the vehicle owner is under a garage policy, then any other coverage available to the permittee must be primary and the owner's garage policy coverage cannot apply until the primary coverage has been exhausted. When any nonowned 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 applied until the possessor's garage policy coverage has been exhausted. When a claim arises out of a leased motor vehicle's operation and the lessee (the one paying for use of the vehicle) provides the vehicle's coverage, then his/her insurance is primary and the lessor's (the owner leasing the vehicle) insurance will not apply until the lessee's coverage is exhausted.

Duties of Insurers and Producers

In recommending to a consumer the purchase or exchange of an annuity that results in another insurance transaction/transactions, the producer or the insurer where no producer is involved, must have reasonable grounds for believing that the recommendation is suitable for the consumer on the basis of the facts disclosed by the consumer as to his/her investments and other insurance products and as to his or her financial situation and needs. Prior to a purchase/exchange resulting from a recommendation and insurer/producer must make reasonable efforts to obtain information concerning: The consumer's financial status The consumer's tax status The consumer's investment objectives; and Such other information used or considered to be reasonable by the insurance producer, or the insurer where no producer is involved, in making recommendations to the consumer Recommendations must be reasonable under all the circumstances actually known to the insurer or insurance producer at the time of the recommendation. However, a producer/insurer has any obligation to a consumer is a consumer: Refuses to provide relevant information requested by the insurer or insurance producer Decides to enter into an insurance transaction that is not based on a recommendation of the insurer or insurance producer; or Fails to provide complete or accurate information

Commercial Risk Insurance

Insurance that is not personal risk insurance. Personal risk insurance includes insurance on residences, farms, private passenger autos, watercraft, and rental agreements of 90 days or less. Commercial risk insurance does not include the following types of insurance: Life and annuities Disability Ocean marine Reinsurance Aircraft liability and aircraft hull Fidelity and surety bonds Surplus lines Other types of insurance specified by law

Mandated Offer for Sinkhole Loss Coverage

Insurers must offer coverage to damage resulting from sinkholes and sinkhole loss.

Exclusions for Pre-Arranged Ride Owners/Operators

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 Nothing in this section prevents an insurer from providing coverage for a transportation network company driver's vehicle if it chooses to do so by contract or endorsement.

Filing of Credit Scoring Models

Insurers using insurance scores to underwrite or rate risks must file their scoring processes with the Department.

Unfair Claims Settlement Practices

Knowingly committing an unfair claims settlement practice, including: Misrepresenting material facts or provisions relating to coverage at issue Failing to acknowledge and act promptly upon communications with respect to claims. Claim forms must be provided to the insured within 15 days being requested and must include instructions for use. Failing to affirm or deny coverage of claims within a reasonable time after Proof of Loss has been provided Offering substantially less than amounts recovered in actions brought by insureds Attempting to settle claims for less than a reasonable amount based on written advertisements with or in the application Attempting to base claims settlements on an application that was altered without the insured's notice or consent Making known to insureds or claimants a policy of appealing arbitration awards in order to compel them to accept less than the amount of the award Delaying claims payment or investigation by requiring the submission of preliminary claims reports in addition to Proofs of Loss Failing to promptly settle claims, where liability is clear, under one portion of the policy, in order to influence settlements under other portions of the policy Failing to attempt in good faith to promptly and fairly settle a claim in which liability has become clear Compelling insureds or beneficiaries to institute lawsuits to recover amounts due by offering substantially less than the amounts ultimately recovered in suits brought by them; equal consideration is 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 In the case of claims denials or offers of compromise settlement, failing to provide a reasonable and accurate explanation for such actions If the insurer owns a repairer or requires a repairer to be used, the insurer's failure to ensure that the repairs are properly performed An insurer may not be obligated to decide a claim with insufficient investigation and information.

Rebating

Knowingly permitting or offering a rebate, special favor, or advantage concerning dividends or other benefits, or other valuable consideration prohibited by law or not specified in the policy or both as an inducement to buy insurance. The following situations are not rebates or rebating: Paying bonuses to policyholders or abating their premiums out of accumulated surplus Making allowances to those on an industrial debit plan who have been making premium payments directly to an insurer's office so that collection expenses are saved. The allowance should reflect these savings. Readjusting a group policy rate of premium based on a less-than-expected loss or expense experience Offering policyholders a child passenger restraint system or a premium discount equal to such a restraint system's purchase price, when the purpose of the restraint system is a child's safety

Unfair Discrimination

Making or permitting unfair discrimination between individuals of the same class and equal expectation of life (life insurance) or of the same class and hazard (health insurance) in the benefits provided or the premiums and rates charged for such insurance. Inquiring into, or requiring a non-minor applicant for a health policy to reveal, the occupation of any member of an applicant's family if the member is not covered under the policy. Past and future travel plans may not be used to refuse to issue, refuse to continue, limit coverage, or determine premiums; unless future travel plans are to high risk areas, such as those experiencing disease epidemics or armed conflicts. Refusing to insure or limiting the amount of coverage available because of the individual's sex, race, religion, national origin, marital status, income, or educational background. Terminating, or to modifying coverage solely because the applicant or insured or any employee of either is mentally or physically impaired. 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. Making or permitting any unfair discrimination between individuals or risks of the same class and the same hazard by refusing to insure or renew, canceling or limiting the amount of coverage on a property or casualty risk solely because of its geographic location or its age. However, this does not prohibit such discrimination when it can be justified by sound underwriting and actuarial principles based upon actual or reasonably anticipated loss experience.

False Advertising

Making or placing before the public any statement about the insurance business or about any person in the conduct of the insurance business, which is untrue, deceptive, or misleading. This includes any such statement which: Misrepresents the benefits, conditions, terms, or (past or present) dividends of any insurance policy Misrepresents the financial condition of any person or of the legal reserve system of any life insurer Uses any name of a policy or type of policy that misrepresents the true nature of the policy or policy type Misrepresents in order to induce an individual or entity to lapse, forfeit, exchange, convert, or surrender a policy Misrepresents to effect a pledge or assignment, or to effect a loan against any insurance policy Misrepresents any insurance policy as being shares of stock Falsely advertises that services or products are endorsed by a bank or savings association Uses the name or logo of a bank or savings association without written consent Presents himself or herself as any type of financial specialist when in fact he/she is engaged only the sale of insurance, unless he/she holds a recognized financial specialist certification Engages in financial planning without disclosing to the client that the person is also an insurance salesman and that a commission will be received for policy sales in addition to a financial planning fee Charges fees for services which are not authorized in a written agreement with an insurer

Workers' Compensation Definitions (Cont.)

Mental Injury - Mental deterioration or mental/behavioral disorder caused by a compensable physical injury resulting in permanent disability, or an identifiable work-related event resulting in a sudden or unusual mental stimulus. The term does not include mental response due to loss of employment or employment opportunities. Minimum Weekly Benefit - The minimum compensation per week payable to an employee, which is 15% of the state's average weekly wage. Utilization Review - An objective evaluation of medical care services provided to an injured or disabled employee. The term does not include financial evaluations. Workers' Compensation Specialist - An employee of the Department of Labor and Workforce Development providing communication services about Workers' Compensation and conducting benefit review conferences. Employee does not include a construction services worker who: Has been exempted by the registry Is not covered under a Workers' Compensation policy; and Is providing services on a construction project that is not a commercial construction project; or Is the general contractor for a commercial construction project In a work relationship, in order to determine whether an individual is an "employee," a "subcontractor" or an "independent contractor' the following factors shall be considered: The right to control the conduct of the work The right of termination The method of payment The freedom to select and hire helpers The furnishing of tools and equipment Self-scheduling of working hours The freedom to offer services to other entities Scope of the Requirement - Every employer and employee shall, respectively, pay and accept compensation for personal injury or death by accident arising out of and in the course of employment without regard to fault as a cause of the injury or death. Any employer shall not be bound if the employee has given, prior to any accident resulting in injury or death, notice to be exempted An employee who is a corporate officer of the employer electing to be exempted shall not reduce the number of employees used to determine the employer's coverage requirements Other Rules Insurers, rate service organizations, or advisory organizations may not agree to use any specific rate information.

financial responsibility definitions

Motor Vehicle - A self-propelled vehicle designed for highway use, including trailers; semitrailers; trolleys, except streetcars, if obtaining electric power from overhead wires; but not including traction engines, road rollers, farm tractors, or motorcycles. Automobile Liability Insurance - An owner's or driver's liability insurance policy that acts as the proof of financial responsibility required to drive a motor vehicle (auto) in Tennessee. Proof of Financial Responsibility - Any 1 of the following: A written proof of liability insurance coverage providing at least $60,000 per accident A split-limit policy providing at least: $25,000 for bodily injury per person $50,000 for bodily injury to 2 or more persons per accident $15,000 for property damage per accident A cash deposit or a bond of $60,000 A rental car company offering rental insurance or collision damage waivers must disclose that such coverage may already be provided by the renter's personal auto liability policy.

Disclosure of Intention to Use Credit Information

Personal insurance insurers that use credit information in underwriting or rating must disclose during the application process, that it may obtain credit information in connection with the application. The disclosure must be in the same medium as the application and specify a third party will acquire the credit information on behalf of the insurer.

General Provisions License Suspension

Problems in Keeping a License Providing misinformation on a license application Obtaining or attempting to obtain a license through misrepresentation or fraud Cheating on an insurance licensing exam Having an insurance license denied, suspended, or revoked elsewhere in the United States or Canada Moral Turpitude, Lack of Character, or Mishandling of Funds Intentionally misrepresenting the terms of an insurance contract or application Using fraudulent, coercive, or dishonest practices or demonstrating incompetence, untrustworthiness, or financial irresponsibility in conducting business. Forging another's name on an insurance document Improperly handling money or properties received while transacting insurance business Violation of Regulations Violating a law, regulation, subpoena, or order of the insurance commissioner of any state Having a felony conviction Having committed an unfair trade practice or fraud Knowingly accepting insurance business from an unlicensed person Knowingly directing a person covered under a group health policy to apply for health care benefits through the TennCare program when such coverage may continue to be covered under the group health policy Default On Student Loans If a licensee is found to be in default of student loans as determined by the Tennessee Student Assistance Corporation or has failed to enter into an approved payment plan, the TSAC will issue a notice of intent to file an order with the licensing agency to have the person's license suspended, denied or revoked The licensee may pay the entire debt in full, or enter into an approved payment plan, or request a deferment of payment, or request a hearing If the licensee, without good cause, fails to respond to the notice, or fails to request a hearing, or fails to appear at a hearing, then TSAC will issue a final order and request that the person's license be suspended, denied or revoked When it is determined that the licensee has taken the necessary and proper steps to satisfy the student loan indebtedness, then TSAC will submit an order to the licensing authority requesting to terminate the previous order of suspension, denial or revocation Failure to Pay Ordered Supports A license may be denied, suspended or revoked if the licensee fails to pay ordered support such as alimony or child support A notice of suspension must specify the reason(s) and grounds for the suspension, the suspension effective date and any other notices prescribed by the licensing authority. The notice must also inform the person that he/she must obtain a release form the Dept. of Human Services in order to apply for issuance, renewal or reinstatement of the license. If the Commissioner denies a license application for any of the above grounds, the Commissioner must notify the applicant of such denial within 30 days. A business entity's license 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 or more of the partners, officers or managers and the violation was neither reported to the Commissioner nor corrective action taken.

Legal Process

Service of Process An insured intending to rely on uninsured motorist coverage must provide, to the insurer, a copy of the process of any legal action taken against the uninsured motorist. John Doe Warrants An insured taking legal action against an uninsured motorist may issue a John Doe warrant against the uninsured motorist. In the event the uninsured motorist's whereabouts is discovered, the uninsured motorist shall be allowed a reasonable time to plead to the original process and then the case may proceed against the uninsured motorist as if he/she were known at the time of the accident. Arbitration An insurer may not enter into a settlement that decreases the rights, benefits, or coverage of the insured. The following requirements and conditions must be met to arrive at a settlement: Upon request, the insured (under uninsured motorist coverage) must provide the insurer (providing liability coverage to the owner or driver of the uninsured motor vehicle) with all of the following: The name and address of the insured's insurer The policy number (under which uninsured motorist coverage is provided) The limits of the uninsured motorist coverage The liability insurer must: Give written notice of the settlement offer to the insured's insurer Verify the coverage upon request Confirm to the insured's insurer that the owner or driver of the uninsured motor vehicle will agree, in writing, to cooperate with the arbitration of the claim The liability insurer may not pressure the insured's insurer to settle a claim by meeting these requirements when the insured's insurer has not waived its subrogation rights. The insured must give written notice to his/her insurer of his/her intent to accept a settlement offer and to submit the claim to binding arbitration After receipt of both notices, the insured's insurer has 30 days to notify both the insured and the liability insurer that it consents to the settlement Upon receipt of such notice, the insured may release the owner or driver of the uninsured vehicle and receive the settlement payment The arbitrator must be agreed to by all parties. The arbitrator's fee must be paid by: The insured, if the arbitrator's award to the insured is less than or equal to the amount collected by the insured at least 15 days before arbitration The insured's insurer, if the award is greater than that amount Arbitration Process The insured's insurer may decline binding arbitration if, within 30 days of the first 2 notices, it pays the insured the full amount of the settlement offer made by the liability insurer. The insured's acceptance of such payment does not prevent the insured from seeking additional compensation from his/her own insurer. When the insured accepts the payment, his/her insurer is entitled to recover from the liability insurer the amount of that payment and any additional payments under the uninsured motorist coverage of its policy. Upon final disposition (e.g., settlement or payment), the liability insurer must reimburse the insured's insurer in the amount of policy limits applicable to the owner or driver of the uninsured motor vehicle or in the amount of a judgment against the owner or driver of the uninsured motor vehicle, whichever is less. If a judgment is in favor of the owner or operator of the uninsured motor vehicle, the insured's insurer shall not be entitled to reimbursement for any claim payments to the insured. If a judgment exceeds the owner's or driver's coverage from the liability insurer, the insured's insurer is entitled to recover against the owner or driver to the extent of payments made to the insured in excess of the liability insurer's coverage amount.

Sinkhole Activity

Settlement or systematic weakening of the earth supporting a covered building, 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

Structural damage to a covered building caused by the sudden collapse of the earth supporting the covered building as the result of sinkhole activity. Sinkhole loss does not include: Land stabilization or costs associated with land stabilization;or In the absence of structural damages to the covered building, cracking, shrinking, expansion, deterioration, or similar damage

Regulatory Authority

The Commissioner has the authority to regulate the licensing of insurance producers and to administer penalties as appropriate. The Commissioner (or a person appointed by the Commissioner) will personally visit, at least once every 5 years, each insurance company licensed in this state and examine its: Affairs Financial condition Ability to fulfill its obligations Compliance with insurance laws

Investigations

The Commissioner may investigate as necessary and may subpoena and examine witnesses. He/she will also have access to all business records relevant to the investigation. All testimony, documents, and other information obtained in an investigation is confidential and absolutely privileged unless otherwise provided. A person being investigated or their representation may obtain a copy of each and any inquisitorial order and complaint filed against the person. Upon initiation of a formal proceeding against any person, the person shall be entitled to any and all discovery rights. The Commissioner must provide a person subject to an investigation a copy of the complaint which initiated the investigation within 30 days of receiving the complaint. Before seeking a statement from a person being investigated, he/she must be notified that any statement may be used in an investigation or become evidence in a hearing. Failure to so notify the person will render any statement provided as inadmissible. However, statements may be taken before giving such notice as long as they are taken within 30 days of receiving the complaint. If a person from whom the Commissioner requests records and documents relevant to an investigation doesn't believe that the requested documents will lead to the discovery of relevant facts, that person may apply to an administrative judge for review. Once the Commissioner completes an investigation, he/she shall notify the person investigated or whom a complaint was filed within 30 days of the completion. Any investigation must be completed within 2 years of receiving a complaint or entering an inquisitorial order, whichever comes first. All actions shall be commenced within 5 years of the date that the Commissioner knew or reasonably should have known of the cause of action. The Commissioner may take 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.

Hearings and Judicial Review

The Commissioner may suspend or revoke a business entity's license if a hearing finds that a licensee's violation was known or should have been known by at least one of the entity's partners, officers, or managers and the violation was neither reported to the Commissioner nor sanctioned to prevent further noncompliance. A person whose license is surrendered or lapsed may nonetheless be held accountable for misconduct while the license was held. A license cannot be suspended, revoked or withdrawn unless the licensee has first received written notice of the Commissioner's intent and is allowed the opportunity to show proper compliance necessary to keep the license. If the Commissioner finds that a licensee's conduct requires emergency action to preserve public health, safety or welfare, a license may be suspended pending proceedings for revocation or other action. In this context, within 7 days after a license is suspended, the licensee must be notified of the opportunity to request a hearing.

Workers' Compensation Assigned Risk Plans

The Commissioner shall implement an assigned risk plan which fairly apportions Workers' Compensation insurance coverage among all such insurers for applicants who are in good faith entitled to such insurance, but who are unable to procure it through ordinary methods. The plan shall provide for the equitable distribution of risks and shall provide for hearings on grievances and right of appeal. Generally, participation is mandatory for Workers' Compensation insurers. No insurer shall issue a Workers' Compensation policy, or employer's liability insurance or undertake to transact that business in Tennessee unless it participates in the plan.

Tennessee Insurance Guaranty Association

The Tennessee Insurance Guaranty Association was established to cover the claims and obligations of insolvent insurers. All property and casualty insurers must be members of the Association in order to transact business in Tennessee. The Association will cover claims that: Existed prior to the determination of insolvency Arise within 30 days after the determination of insolvency Arise before the policy expiration date, if that date is less than 30 days after the determination of insolvency Arise before the insured replaces the policy or requests cancellation, if such actions are taken within 30 days after the determination of insolvency For Workers' Compensation claims, the Association will pay the full amount of a claim covered by a Workers' Compensation policy, up to the policy limits. For claims other than Workers' Compensation claims, arising from bodily injury, sickness, or disease, including death resulting from the same, the Association shall be obligated to an amount of at least $100 but not more than $100,000. Under these claims, the Association will cover reasonable expenses incurred for necessary medical, surgical, X-ray and dental services. This includes prosthetic devices and necessary ambulance, hospital, professional nursing and funeral services, and any other amounts actually lost by reason of the insured's inability to work and earn wages or salary. The Commissioner must notify the Association that an insurer has become insolvent not later than three days after he has received notice of the determination of insolvency. Any person recovering claims paid by the Association shall be deemed to have assigned his/her policy rights to the Association. Every insured or claimant seeking recovery from the Association must cooperate with the Association to the same extent as required by the insolvent insurer. The Association has the right to recover any claims paid to an insured who, as of December 31 of the year preceding the date the insurer becomes insolvent, has a net worth exceeding $25 million. Any person having a claim that may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association in the insured's place of residence. However, if the claim is a first party claim for damage to property with a permanent location, then recovery shall be sought first from the association covering the property's location. If it is a Workers' Compensation claim, the person shall seek recovery first from the association where the claimant resides. Any recovery under this section shall be reduced by the amount of recovery from any other insurance guaranty association or its equivalent. The Association won't pay a covered claim filed after the earlier of: 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 The Association won't pay claims under a policy's incurred-but-not-reported losses.

Exceptions to Examinations

The following are exempt from license examination requirements: 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. This exemption is only available if: The person is currently licensed in that state or if the application is received within 90 days of the applicant's previous license cancellation; and 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, 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 and makes application within 90 days of establishing legal residence in Tennessee. The person must apply for the same lines of authority held in the previous state of residence.

Nonpayment of Premium

The named insured's failure to pay any part of premiums when due.

Insurance Producer Requirements

To issue a producer license, the Commissioner must determine that the applicant: Is at least 18 years of age Has completed any required prelicensing course Has passed the appropriate licensing exam Has paid all required fees Has not committed any act that is ground for denial, suspension, or revocation of the license To issue a producer license to a business entity, the Commissioner must determine that the business entity: Must pay the applicable fees Must designate a producer as the contact person responsible for the entity's compliance with state laws, rules, and regulations Must provide any documents requested to verify application information The following mandatory fees are nonrefundable: $50 for filing an application for an insurance producer license or a limited lines producer license $60 for renewing an insurance producer license $30 for renewing a limited lines producer license $15 for appointing or terminating the appointment of an insurance producer or limited lines producer An individual who fails a license examination may try again after 30 days from the examination failure date, and is required to pay another examination fee. A score of at least 70% is required to pass. An individual who fails the examination again within 6 months of the first attempt, is required to retake prelicensing education courses. Applicants must provide the following to be approved to take the exam: 2 full sets of fingerprints A certified check made payable to the Tennessee Bureau of Investigation representing the cost of having criminal history record checks performed; and A reasonable administrative fingerprinting fee; or Alternate methods of fingerprint submission, if approved by the Commissioner Applicants required to take an examination after the lapse of a license are required to submit fingerprint background checks prior to taking a new examination.

Continuing Education

To renew a license, an insurance producer must complete 24 credit hours of approved continuing education every 2 years, excluding the year in which the original license is issued. A producer must complete at least 3 hours of ethics continuing education during a licensure period. A course or class already passed may not be repeated for 2 years. To qualify as a credit, a class must be at least 50 minutes in length and be taught by a certified instructor. An instructor of an approved continuing education program shall receive continuing education credit for up to 2 times the number of approved credit hours taught. A securities course must include variable annuities to be considered for continuing education credit. Each producer is responsible for annually submitting documentation of the continuing education courses completed during the reporting period, and the documentation must be kept for the most recent 2 year period. The Commissioner may grant an extension to a producer to meet continuing education requirements. The Commissioner may, for cause and upon written request, either extend the time in which a producer must meet continuing education requirements, or waive continuing education requirements for a producer. A nonresident producer may satisfy continuing education requirements by meeting the continuing education requirements of his/her home state, if the home state allows Tennessee producers to satisfy continuing education requirements on the same basis. An insurance producer at least 65 years of age, or who has been continuously licensed in Tennessee for the past 15 years, or that is a business entity, is exempt from continuing education requirements. A person who violates continuing education requirements is subject to disciplinary action. An educational advisory committee makes recommendations to the Commissioner concerning standards for continuing education. If a producer completes more than the required number of continuing education hours during a licensure period, up to 12 excess CE hours can be transferred into the next licensure period. The list of subjects that will be acceptable for continuing education credits includes, but is not limited to the following: Insurance, annuities, and risk management Insurance laws and regulations Mathematics, statistics, and probability Economics Business law Finance Taxes Business environment, management or organization Subjects that will not be acceptable for continuing education credits include, but are not limited to the following: Any course used to prepare for taking an insurance licensing examination Committee service in any professional organization Computer science courses Motivational, psychology, or sales training courses Securities courses, other than variable annuities

Ride Sharing Services

Transportation Network Company - 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. Companies currently using this model include Uber and Lyft. A transportation network company cannot 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. Digital Network - 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 - 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 - 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 arrangements provided by businesses engaged in the rental of motor vehicles; or Transportation provided using a taxi, limousine, or other for-hire vehicle regulated Transportation Network Company Driver - 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 Transportation Network Company Rider - 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.

Limited Lines Includes:

Travel Credit Crop hail Title insurance, provided the limited lines producer is an attorney licensed in Tennessee Personal property insurance sold to a debtor under a master group policy issued to a creditor; car rental insurance for up to 90 days Any other lines, as specified by law or by the Commissioner

Definition of Uninsured Motor Vehicle and Coverage of Government Vehicles

Uninsured Motor Vehicle - An auto for which ownership, maintenance, or use has resulted in bodily injury of property damage, and for which the limits of liability are less than the applicable limits of Uninsured Motorist coverage under the policy against which the claim is made. The term does not include an auto that is: Covered under the same policy providing the Uninsured Motorist coverage Owned or regularly used by an insured Self-insured Designed for use mainly off public roads, except while on public roads Being used as a residence

Exemptions

Unless otherwise specifically included, this rules do not apply to recommendations involving: Direct response solicitations where there is no recommendation based on information collected from the consumer Contracts used to fund: An employee pension or welfare benefit plan that is covered by the Employee Retirement and Income Security Act (ERISA) A plan described by Sections 401(a), 401(k), 403(b), 408(k) or 408(p) of the Internal Revenue Code A government or church plan defined in Section 414 of the IRC, a government or church welfare benefit plan, or a deferred compensation plan of a state or local government or tax exempt organization under Section 457 of the IRC A nonqualified deferred compensation arrangement established or maintained by an employer or plan sponsor Settlements of or assumptions of liabilities associated with personal injury litigation or any dispute or claim resolution process; or Formal prepaid funeral contracts

Request for Loss Runs Worker's Comp

Within 10 business days of receipt of a written request from an insured, a commercial lines insurer shall furnish a copy of the insured's loss run history for up to the previous 3 years, or complete loss run history with the insurer if the history is less than 3 years. If the insurer fails to provide the requested information within the time allowed, the failure shall be a violation of the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009. Any requester may seek enforcement and any remedies allowed under the Act and the Commissioner may take action as allowed by law. No insurer shall charge any fees to prepare and furnish one, written 3-year loss run history. However, if the insurer provides the loss run history by electronic means, it may charge a reasonable fee to provide a hard copy of the same report.

Request for Loss Runs

Within 10 business days of receipt of a written request from an insured/an insured's designee, a commercial lines insurer must furnish directly to the person designated in the request a copy of the insured's loss run history for up to the previous 3 years, or complete loss run history with the insurer if the history is less than 3 years. A written request includes communications made by email or fax. Failure to provide a copy within the time allowed is a is deemed an unfair trade practice. Any requestor may seek enforcement and any remedies. The Commissioner may take action, as well. No insurer can charge any fees to prepare and furnish a 3-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.

Workers' Compensation

Workers' Compensation Law regulates Workers' Compensation insurance in Tennessee. Each employer and employee subject to Workers' Compensation Law must pay and accept compensation, respectively, without regard to fault, unless the employee is a corporate officer and has given notice to be exempted from coverage. The officer must still be counted as an employee when determining whether Workers' Compensation coverage is required.