Tennessee Code 56-28-109 – Reserves
Terms Used In Tennessee Code 56-28-109
- Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-1-102
- 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.
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Subscription: includes a mark, the name being written near the mark and witnessed. See Tennessee Code 1-3-105
The service corporation shall maintain at all times proper reserves subject to the approval of the commissioner for unearned subscription fees and unearned premiums and for unpaid hospital bills, including provision for unreported and undischarged hospital cases, and other known liabilities. In addition, a contingency or epidemic reserve shall be accumulated annually at the rate of not less than two and one half percent (2.5%) of net premium income. When the contingency or epidemic reserve equals seventy-five thousand dollars ($75,000), or fifty-five percent (55%) of the annual premium income, whichever is higher, further accumulations may be discontinued for any length of time that they are not needed to meet the requirement of this section.