Section 0780-01-60-.05 - FINANCIAL REQUIREMENTS(1) An insurer shall meet the following requirements to become licensed under this Act: (a) An insurer shall, at all times, maintain capital of at least $100,000.(b) In addition to the requirement of paragraph (a) above each insurer shall have and maintain surplus of at least one-third (1/3) of gross premium;(c) Any person transacting the business of legal insurance on January 1, 1990 shall meet the surplus requirements of subpart (b) supra by December 31, 1991.(d) Each insurer licensed under this act shall satisfy the commissioner that it has and shall maintain on deposit with the state treasurer at least $100,000 in cash or its equivalent; but the commissioner may, in his discretion, accept as an equivalent bonds of the United States, or any agency or instrumentality of the United States which have been included in the three highest grades by any of the recognized securities rating firms, bonds of this state, bonds of the state of domicile, or bonds publicly issued by any solvent institution created or existing under the laws of the United States or any state thereof which have been included in the three highest grades by any of the recognized securities rating firms. Notwithstanding the foregoing, the commissioner may decline to accept as a deposit any specific issue of securities that he has determined may not provide the necessary protection to policyholders and creditors in the United States. This deposit shall be an admitted asset on the financial statement of the plan.(e) An insurer must maintain at all times proper reserves for unearned subscription fees and unearned premiums, and for unpaid attorney service fees, including provision for unreported and undischarged legal cases and other known liabilities. To receive credit for reinsurance of reserve requirements under the Act, the assuming insurer must meet the requirements set forth in T.C.A. § 56-2-207through 56-2-209.(2) The statutory accounting method shall be used in computing the minimum requirements under the Act and in all evaluations of the financial condition of insurers.Tenn. Comp. R. & Regs. 0780-01-60-.05
Original rule filed March 6, 1991; effective April 20, 1991.Authority: T.C.A. §§ 56-2-301, 56-43-109, 56-43-112 and 56-43-115.