TN Insurance Bulletin (1996-08-01): Banks Selling Insurance

DON SUNDQUIST GOVERNOR STATE OF TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE 500 JAMES ROBERTSON PARKWAY NASHVILLE, TENNESSEE 37243 Bulletin TO: All Banks Doing Business in Tennessee FROM: Douglas Si.1.cmorc. Commissioner. Department of Commerce and Insurance RE: Banks Selling Insurance DATE: August I. 19% DOUGLAS M. SIZEMORE COMMISSIONER TI1is Bulletin will serve as a guideline for all banks who arc selling insurance in the State of Tennessee. It is the position of the Department of Commerce and Insurance that all of the State La\\S bind e\ cry entity that engages in the sale of insurance products regulating this activity. It is also the position of this Department that insurance includes any product defined or regulated as insurance by the insurance laws and regulations of this State. The Department of Commerce and Insurance regulates insurance in this state. State low requires that all insurance policies must be sold by companies licensed to do business in this state under Title 5(, and that all individuals selling insurance must be licensed as agents under Title 56. Chapter(,, Below is a listing or some additional key laws that a fleet the sale of insurance. A summa~ · or these laws and regulations arc as rollows: FICTITIOUS GROUPING - T.C.A. Section 5(,-X-11 (, prohibits selling or property and casualty insurance on a group basis. Insurance may be marketed toward particular groups if it is disclosed that anyone whether or not a member or the group. may purchase the insurance at the same rates. COMPENSATION TO UNLICENSED INDIVIDUALS- T.C.A. Section %-o-149 prohibits payment by an insurer or agent or .. any commission or other valuable consideration for services in connection with the sale of insurance·· unless the recipient of the commissions is a licensed agent (with certain c:xccptions). ACCIDENT AND HEALTH ADVERTISING- Chapter 07XO-I-X.OX pcm1its testimonials or endorsements of accident and health insurance provided that the ad\'ertiscmcnt discloses that it is a paid endorsement. Additionally. only banks located and doing business in places \vith a population or not more than 5.000 may negotiate or sell insurance. DMS/SKR/pjh