2010 Tennessee Code
Title 56 - Insurance
Chapter 11 - Insurance Holding Company System Act of 1986
56-11-110 - Injunctions Prohibited voting of securities Sequestration of voting securities.

56-11-110. Injunctions Prohibited voting of securities Sequestration of voting securities.

(a)  Injunctions.  Whenever it appears to the commissioner that any insurer or health maintenance organization, or any director, officer, employee or agent thereof, has committed or is about to commit a violation of this chapter or of any rule, regulation, or order issued by the commissioner under this chapter, the commissioner may apply to the chancery court to enjoin the insurer or health maintenance organization or any director, officer, employee or agent of the insurer or health maintenance organization from violating or continuing to violate this chapter or any such rule, regulation or order, and for other equitable relief as the nature of the case and the interest of the insurer or health maintenance organization's policyholders, enrollees, providers, creditors, and shareholders or the public may require.

(b)  Voting of Securities; When Prohibited.  No security that is the subject of any agreement or arrangement regarding acquisition, or that is acquired or to be acquired, in contravention of this chapter or of any rule, regulation or order issued by the commissioner under this chapter may be voted at any shareholders' meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding; but no action taken at any such meeting shall be invalidated by the voting of the securities, unless the action would materially affect control of the insurer or health maintenance organization or unless the courts of this state have so ordered. If an insurer or health maintenance organization or the commissioner has reason to believe that any security of the insurer or health maintenance organization has been or is about to be acquired in contravention of this chapter or of any rule, regulation or order issued by the commissioner under this chapter, the insurer or health maintenance organization or the commissioner may apply to the chancery court of Davidson County to enjoin any offer, request, invitation, agreement or acquisition made in contravention of § 56-11-104 or any rule, regulation, or order issued by the commissioner under § 56-11-104 to enjoin the voting of any security so acquired, to void any vote of the security already cast at any meeting of shareholders and for other equitable relief as the nature of the case and the interest of the insurer or health maintenance organization's policyholders, enrollees, providers, creditors and shareholders or the public may require.

(c)  Sequestration of Voting Securities.  In any case where a person has acquired or is proposing to acquire any voting securities in violation of this chapter or any rule, regulation or order issued by the commissioner under this chapter, the chancery court of Davidson County may, on such notice as the court deems appropriate, upon the application of the insurer or health maintenance organization or the commissioner, seize or sequester any voting securities of the insurer or health maintenance organization owned directly or indirectly by the person, and issue the order with respect thereto as may be appropriate to effectuate this chapter. Notwithstanding any other law, for the purposes of this chapter, the sites of the ownership of the securities of domestic insurers or health maintenance organizations shall be deemed to be in this state.

[Acts 1986, ch. 572, § 10; 2000, ch. 708, § 3h; T.C.A. § 56-11-210.]