(a) The commissioner shall also make an examination of each insurance company licensed in this state whenever the commissioner deems it prudent to do so, or upon the request of five (5) or more of the stockholders or persons pecuniarily interested in the company, who shall make affidavit of their belief, with specifications of their reasons for the belief, that the company is in an unsound condition.
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Terms Used In Tennessee Code 56-1-409

  • Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-1-102
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • insurance company: includes all corporations, associations, partnerships, or individuals engaged as principals in the business of insurance. See Tennessee Code 56-1-102
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
  • Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds-type organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Tennessee Code 56-16-102
  • Reciprocal: means the aggregation of subscribers under a common name. See Tennessee Code 56-16-102
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b) For the purpose of ascertaining financial condition or legality of conduct, the commissioner may, for good cause, make an investigation and examination, independent of any other examination of an insurer or proposed insurer, of any accounts, records, files, documents, and transactions pertaining to the business of insurance. The investigatory and examination authority shall extend to:

(1) Any insurance agency, agent, general agent, surplus lines agent, insurance representative, or any person holding out to be an insurance agency, agent, general agent, surplus lines agent, or insurance representative;
(2) Any person having a contract under which that person enjoys by terms or in fact the exclusive or dominant right to manage or control an insurer;
(3) Any corporation, association, or person engaged in the business of adjusting losses, financing premiums, or furnishing insurance services in the form of administrative services only to self-insured groups;
(4) Any other individual, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyds insurer, fraternal benefit society, and any other legal entity engaged in the business of insurance; and
(5) Any employer that self-insures its workers’ compensation liabilities pursuant to § 50-6-405(b) or a group of employers qualifying as self-insurers pursuant to § 50-6-405(c).
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