(a) All acquisition and administrative expenses incurred in connection with the medical service corporation shall at all times be limited after the second year of operation to not exceed twenty-five percent (25%) of the total net premium income of the corporation. The expenses, during the first year, shall be limited to thirty-five percent (35%), and during the second year, the expenses shall be limited to thirty percent (30%). All acquisition and administrative expenses incurred shall be subject to the approval of the commissioner.
lawyer at desk

Ask an insurance law question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

Terms Used In Tennessee Code 56-27-114

  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-27-102
  • 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.
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b) “Administrative expenses,” as used in this section, includes all expenditures except payments for subscribers’ claims.
(c) Claim service expense shall be separately classified and included in administrative expense, unless otherwise ordered by the commissioner. No such corporation shall disburse as administrative expenses during any one (1) year a sum greater than the percentage limited by this section of payments received from subscribers during that calendar year.
  Previous section
Next section  
 Chapter 27 Contents