Section 0780-01-66-.04 - COMMISSIONER'S AUTHORITY(1) For the purposes of making a determination of an insurer's financial condition under this chapter, the Commissioner may:(a) Disregard any credit or amount receivable resulting from transactions with a reinsurer which is insolvent, impaired or otherwise subject to a delinquency proceeding;(b) Make appropriate adjustments including disallowance to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates consistent with the NAIC Accounting Policies And Procedures Manual, state laws and regulations;(c) Refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor;(d) Increase the insurer's liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve-month period.(2) If the Commissioner determines that the continued operation of the insurer licensed to transact business in this state may be hazardous to its policyholders, creditors or the general public, then the Commissioner may, upon a determination, issue an order consistent with applicable statutes requiring the insurer to:(a) Reduce the total amount of present and potential liability for policy benefits by reinsurance;(b) Reduce, suspend or limit the volume of business being accepted or renewed;(c) Reduce general insurance and commission expenses by specified methods;(d) Increase the insurer's capital and surplus;(e) Suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to its policyholders;(f) File reports in a form acceptable to the Commissioner concerning the market value of an insurer's assets;(g) Limit or withdraw from certain investments or discontinue certain investment practices to the extent the Commissioner deems necessary;(h) Document the adequacy of premium rates in relation to the risks insured;(i) File, in addition to regular annual statements, interim financial reports on the form adopted by the National Association of Insurance Commissioners or in such format as promulgated by the Commissioner;(j) Correct corporate governance practice deficiencies, and adopt and utilize governance practices acceptable to the commissioner;(k) Provide a business plan to the commissioner in order to continue to transact business in the state;(l) Adjust rates for any non-life insurance product written by the insurer that the commissioner considers necessary to improve the financial condition of the insurer; or,(m) Take any other appropriate remedial action. If the insurer is a foreign insurer the Commissioner's order may be limited to the extent provided by statute.
(3)(a) Any insurer subject to an order under Subparagraph (2) may request a hearing to review that order, which request must be received within thirty (30) days of the issuance of the order or review shall be deemed waived. The order shall be accompanied by notice of the conduct, condition or ground upon which the Commissioner based the order and notice of an opportunity to be heard consistent with the provisions of the Uniform Administrative Procedures Act, compiled in Title 4, Chapter 5 of the Tennessee Code Annotated. Unless mutually agreed between the Commissioner and the insurer, the hearing shall occur within fifteen (15) days after the date of the request for hearing and shall be held at the main offices of the Department or, in the discretion of the Commissioner, at some other place convenient to the parties designated by the Commissioner. When the date, time and place of the hearing is determined, notice of same shall be given to the insurer.(b) The order provided for in Subparagraph (2) is not an order of administrative supervision. The Commissioner deems that such order relates to supervision in that it is administrative corrective action to determine the condition of the insurer and to abate the Commissioner's determination that the insurer may be in hazardous or potentially dangerous condition. An insurer's failure to comply with the order could lead to administrative supervision or other proceedings.(c) Matters under this chapter shall be treated in compliance with T.C.A.§ 56-9-504.Tenn. Comp. R. & Regs. 0780-01-66-.04
Original rule filed December 20, 1993; effective March 5, 1994. Amendments filed August 3, 2014; effective 11/11/2014.Authority: T.C.A. §§ 4-5-101 et seq., 56-1-408, 56-1-409, 56-1-416, 56-1-417, 56-2-301, 56-9-101 et seq.,56-9-106, 56-9-503, 56-9-504, 56-9-508, 56-11-106, 56-11-109, 56-11-206, 56-11-209, and 2014
Public Acts, Chapter 583.