TN Insurance Bulletin (2012-06-29): Implementation of Public Chapter No. 878: Exempt Commercial Risk Policyholders

I I BILL HASLAM GOVERNOR TO: FROM: RE: DATE: STATE OF TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE 500 JAMES ROBERTSON PARKWAY NASHVILLE, TENNESSEE 37243·5065 615·741·6007 All Insurers Licensed to Write Property an<! Casualty Insurance, All Property & Casualty Producers, and All Interested Parties Julie Mix McPeak, Commissioner ~ iU.:, '"ffi, fu.t Implementation of Public Chapter No. 878: Exempt Commercial Risk Policyholders June 29, 2012 JULIE MIX McPEAK COMMISSIONER The Insurance Division of the Department of Commerce and Insurance ("Division") has received inquiries from interested parties seeking clarification regarding implementation of Public Chapter No. 878 regarding commercial risk policies issued to exempt. commercial risk policyholders. This new section to Tennessee Code _ Annotated Title 56, Chapter 5, Part 3, shall take effect on July I, 2012. The section, among other things: • • • ~ ,, . Defmes "exempt colfunercial risk policyholder'' arid ''riskniliriilger." Directs that commercial tisk 'imiiu'arice policie~ issued to an exempt commercial risk policyholder by an illsiu'er of coiniti.ercial risk inSiirance are exempt from the rate filing requirements in Tenn. Code Ann. § 56-5-306. . · .. Directs that an ins)lrer of commercial risk insurance is subject to ststutory penalties if the insurer fails to comply with statutory requirements relative to a commercial risk insw·ance policy issued to a commercial policy holder and the policyholder has not filed the required certification. The purpose of this Memorandum is to publish a self-certification form required to be annually submitted (at the policy origination date and/or at renewal) to the Division by a connnercial risk policyholder to qualifY as an "exempt commercial risk policyholder." The certification form filed by a commercial risk policyholder shall be confidential and not subject to Title 10, Chapter 7, Part 5. The Memorandum further publishes that insurers may use the sample disclaimer below, or language substsntially similar to the language below, to satisfY a requirement under Tenn. Code Ann. § 56-5-322( e) that any application or policy issued to an exempt commercial risk policyholder contain such a disclaimer. The rate provided for in this policy and all forms utilized are exempt from the filing requirements of Tenn. Code Ann. § 56-5-306. The forms which make up this policy contract are exempt from the filing requirements of Tenn. Code Ann. § 56;5~306. • · · · · ' Any questions about the intent of this Memorandum should be directed to the Insurance Division, 4"' Floor, Davy Crockett Tower, 500 James Robertson Parkway, Nashville, Tennessee, 37243, and/ortelephonentimber . 01~~1~1M · ·· Tennessee Certification of Exempt Commercial Policyholder Status Pursuant to Tennessee Code Annotated 56-5-322 Insurance Article § 56-5-322 of the Tennessee Code Annotated permits certain commercial policyholders to certify that it meets the criteria required to qualify as an Exempt commercial risk policyholder. The undersigned (the Insured) certifies to the Tennessee Department of Commerce and Insurance (the Department) that the Insured meets the criteria below and is an Exempt commercial risk policyholder under Tennessee law. The certification as an Exempt commercial risk policyholder enables the policyholder to purchase iosurance policies that contaio rates, forms, and/or endorsements that have not been filed with and approved by the Department. The policy must still comply with Tennessee law, and complaiots or questions about compliance may be directed to the Tennessee Department of Commerce and Insurance at 615-741-2176. · In order to be an Exempt commercial risk policyholder, the Insured must: I. Annually (at the policy origination date and/or at renewal) execute this Certification Form and return it to the Insurance Division, Policy Analysis Section, 4th Floor, Davy Crockett Tower, 500 James Robertson Parkway, Nashville, Tennessee, 37243. 2. Employ the services of an iosurance producer licensed in Tennessee io property or casualty lioes of authority or procure commercial risk iosurance with the services of a full-tiine risk manager. ·3. Meet AU, of the followiog requirements (check all that apply). Possess a net worth of more than ten million dollars ($1 0,000,000) at the time the policy of iosurance is issued. · Generated net revenue or sales of more than fifteen million dollars ($15,000,000) io the preceding fiscal year. Employ more than twenty-five (25) employees per individual company or frfty (50) employees per . holdiog company at the time the policy of iosurance is issued. I Paid annual aggregate iosurance premiums of more than two hundred fifty thousand dollars ($250,000) io the preceding fiScal year of commercial risk iosurance as defmed in § 56-5-302, excluding any premiums paid for accident and health iosurance and workers' compensation and employer's liability iosurance as defined in § 56-2-201. Signature:--------------------------- Date: _________________________ __ Pr~ted: _________________________________ __ Title:---------------------------------------- Conm~Number: ____________________________________ __ Name of Commercial Insured:------------------------------- Addre~s of Commercial Insured:------------,-----------------~ Name of Insurance Producer/Risk Manager: ------------------------