Section 0780-01-71-.07 - EXAMINATIONS AND INVESTIGATIONS(1) The commissioner may conduct an examination or investigation under T.C.A. § 56-50-101 et seq. of an applicant, licensee, or any other persons engaged in the business of life settlements as often as, or when, the commissioner in his or her sole discretion deems it reasonably necessary to protect the interests of the public.(2) Record Retention Requirements (a) A person required to be licensed by T.C.A. § 56-50-101 et seq. shall retain copies of all:1. Proposed, offered or executed contracts, underwriting documents, policy forms, and applications from the date of the proposal, offer or execution of the contract, whichever is later;2. All checks, drafts or other evidence and documentation related to the payment, transfer, deposit or release of funds from the date of the transaction; and3. All other records and documents related to the requirements of T.C.A. § 56-50-101 et seq.(b) The records required to be retained by subsection (a) shall be retained until five (5) years after the death of the insured that is the subject of the life settlement contract. Records required to be retained must be legible and complete and may be retained in paper, photograph, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.(c) If no life settlement contract is executed between an owner and a life settlement provider, the records required to be retained by subsection (a) shall be retained for a period of three (3) years after the date the proposed or offered contract is rejected or contract negotiations cease, whichever date is last. Records required to be retained must be legible and complete and may be retained in paper, photograph, microprocess, magnetic, mechanical, or electronic media, or by any process that accurately reproduces or forms a durable medium for the reproduction of a record.(3) Conduct of Examinations and Investigations(a) Upon determining that an examination should be conducted, the commissioner shall issue an examination order appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the "Examiners' Handbook" adopted by the National Association of Insurance Commissioners (NAIC). The commissioner may also employ such other guidelines or procedures as the commissioner may deem appropriate.(b) Every applicant, licensee or person from whom information is sought, its officers, directors, partners, members, employees and agents shall provide to the examiners timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents, assets and computer or other recordings relating to the property, assets, business and affairs of the applicant or licensee being examined. The officers, directors, partners, members, employees, contractors and agents of the applicant, licensee or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of an applicant or licensee, by its officers, directors, partners, members, employees, agents, or contractors, to submit to examination or to comply with any reasonable written request of the commissioner shall be grounds for denial of an application for a license, suspension, revocation or nonrenewal of any license or authority held by the licensee to engage in the life settlement business or other business subject to the jurisdiction of the commissioner. Any proceedings for suspension, revocation or nonrenewal of any license or authority shall be conducted pursuant to the Uniform Administrative Procedures Act, Tennessee Code Annotated Title 4, Chapter 5.(c) The commissioner shall have the power to issue subpoenas, to administer oaths and to examine under oath any person as to any matter pertinent to an examination or investigation. Upon the failure or refusal of a person to obey a subpoena, the commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order may be punishable as contempt of court.(d) When making an examination under T.C.A. § 56-50-101 et seq., the commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners, the cost of which shall be borne by the applicant or licensee that is the subject of the examination.(4) Any person engaged in the business of life settlements having knowledge or a reasonable belief that a fraudulent act is being, will be, or has been committed in connection with a life settlement transaction shall provide to the commissioner the information required by, and in a manner prescribed by the commissioner.(5) Any other person having knowledge or a reasonable belief that a fraudulent act is being, will be, or has been committed in connection with a life settlement transaction shall provide to the commissioner the information required by, and in a manner prescribed by, the commissioner.Tenn. Comp. R. & Regs. 0780-01-71-.07
Original rule filed February 7, 2003; effective April 23, 2003.Authority: T.C.A. §§ 56-1-204, 56-50-103, 56-50-106, 56-50-107, 56-50-110, and 56-53-109.