(a) No director or other officer of any domestic insurance company organized under the laws of this state, and no member of a committee having any authority in the investment or disposition of its funds, 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, purchase, sale, payment, or exchange made by or in behalf of the company, or be pecuniarily interested in the purchase, sale, or loan, either as borrower, principal, coprincipal, agent, or beneficiary, except that if a policyholder, the person shall be entitled to all the benefits accruing under the terms of the contract; provided, that this section shall not forbid the collection by attorneys of reasonable fees for the examination of titles and investigations of loans and investments. This section shall not bar a person who is an agent of an insurance company, in the normal course of business, from serving on the board or on a committee of an insurance company because the person receives commissions on insurance sales.
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Terms Used In Tennessee Code 56-3-103

  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • 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.
  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • 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
  • 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) This section shall not bar or limit the ability of a director, officer, or committee member of an insurance company from:

(1) Holding or owning stock or other ownership interest, if the stock or ownership interest has been disclosed to the insurance company, in a company or entity:

(A) The shares of which are publicly traded on a national stock exchange or on an over-the-counter basis;
(B) That is regulated by the federal reserve board, the federal deposit insurance corporation, the office of the comptroller of the currency, or the office of thrift supervision; or
(C) That does business with the insurance company in the ordinary course of business and on terms no less favorable to the insurance company than are available to ordinary customers of the entity;
(2) Receiving dividends or other distributions in the ordinary course of business from the stock or ownership interest; or
(3) Serving as a director, officer, committee member, employee or agency of any entity listed in this subsection (b) and receiving fees or other compensation in the ordinary course of business for the service.
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