Section 0780-01-54-.07 - ADMINISTRATORS(1) No person shall act as an administrator for a pool without a license issued by the Commissioner. Persons acting as an administrator for an existing pool as of January 1, 2005, shall have twelve (12) months from the effective date of these rules as amended herein in which to obtain such license from the Commissioner.(2) To apply for a license, an applicant shall file with the Commissioner an application on a form adopted by the Commissioner. A person applying for a license to act as an administrator shall, under penalty of refusal, suspension or revocation of the certificate of authority, declare therein that the statements made in the application are true, correct and complete to the best of the person's knowledge and belief and upon penalty of perjury.(3) An application for a license shall include the following documentation, together with such other information or documentation as the Commissioner may require: (a) If the applicant is not a natural person, the most recent financial condition of the applicant in the form of an audited financial, a compilation report prepared by a certified public accountant, a Tennessee Franchise and Excise Tax Return, or such other financial statements that the Commissioner may accept;(b) Evidence that the applicant has obtained a fidelity bond in the amount of two hundred thousand dollars ($200,000) written by a company licensed to transact business in this state, which may be obtained by either the administrator or the pool on the administrator's behalf;(c) Evidence that the applicant has obtained an errors and omissions insurance policy for the protection of the pool in the amount of two hundred thousand dollars ($200,000) written by a company licensed to transact insurance in this state, unless waived by the Commissioner upon a showing of proof that the applicant is unable to obtain such coverage; and(d) NAIC Biographical Data forms completed by the officers and directors of the applicant.(4) The Commissioner may deny an application for a license issued under this Rule upon finding that the applicant does not have sufficient experience or qualification to provide services as an administrator to a pool, or for such other grounds enumerated in Rule 0780-01-54-.22. In reviewing an application, the Commissioner may consider the specific services which would be performed by the applicant for the pool.(5) Each pool shall enter into a written contract with the administrator setting forth with specificity the functions of the administrator in their entirety, and the method for calculating the entire amount of compensation to be paid to the administrator for the services rendered to the pool.(6) No administrator or its employees or the pool's board of trustees shall accept, or be the beneficiary of, either directly or remotely, any fee, brokerage, commission, gift, or other consideration for or on account of any loan, deposit, sale, payment, exchange, or reinsurance transaction made by or on behalf of such pool, or be pecuniarily interest in any such purchase, sale, loan, either as borrower, principle, coprinciple, agent, or beneficiary, except that if a member, such person shall be entitled to all of the benefits accruing under the terms of the membership.(7) No administrator or its employee(s) or the pool's board of trustees shall take or receive for their own use any fee, brokerage, commission, gift or other consideration of the pool except for reasonable compensation for services performed or sales or purchases made to or for the pool in accordance with the terms of the administrator contract approved by the Commissioner. No administrator or its employee(s) or the pool's board of trustees shall collect a commission for the procurement of excess insurance for the pool.Tenn. Comp. R. & Regs. 0780-01-54-.07
Original rule filed April 8, 1986; effective May 8, 1986. Repeal and new rule filed August 31, 2005; effective November 14, 2005.Authority: T.C.A. §§ 50-6-405(c) and (h).