2010 Tennessee Code
Title 56 - Insurance
Chapter 26 - Accident and Sickness Insurance
Part 2 - Group Policies
56-26-204 - Pooling of liabilities to self-insurer.

56-26-204. Pooling of liabilities to self-insurer.

(a)  (1)  Two (2) or more member employers of the same trade or professional organization with at least five hundred (500) covered lives may enter into an agreement to pool their liabilities under this chapter for the purpose of qualifying as self-insurers. The trade or professional association shall have been in active existence in Tennessee for at least five (5) years and the association shall:

          (A)  Have a constitution or bylaws;

          (B)  Have members that support the association by regular payment of dues on an annual, semi-annual, quarterly or monthly basis; and

          (C)  Be created in good faith for a purpose other than that of creating accident and sickness self-insurer pools.

     (2)  Ten (10) or more employers of the same nonprofit business coalition for health, organized in Tennessee, may enter into an agreement with the coalition to pool their liabilities under this chapter for the purpose of qualifying as self-insurers. The business coalition shall:

          (A)  Have a charter or bylaws;

          (B)  Have members who support the organization by regular payment of dues on an annual, semiannual, quarterly or monthly basis;

          (C)  Be created in good faith for a purpose other than that of creating accident and sickness self-insurer pools; and

          (D)  Otherwise comply with the requirements of a “bona fide association” as defined in § 56-7-2802.

A nonprofit business coalition for health shall not qualify as a self-insurer under the provisions of this subdivision (a)(2) until the department of commerce and insurance has promulgated the rules authorized by subsection (b).

(b)  The commissioner of commerce and insurance has the authority to promulgate rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, as deemed necessary to provide for the solvency, administration, examination, and enforcement of the pooling agreements. To the extent deemed necessary by the commissioner, each employer member of the approved group shall be classified as a self-insurer as otherwise provided in this chapter.

(c)  Pools created under this section shall be subject to taxation under chapter 4 of this title, filing and approval under this chapter, and laws for protection of policyholders under chapter 7 of this title.

(d)  Notwithstanding any law to the contrary, a pool created under this section by an association of private, not-for-profit educational institutions, the association having been in existence for twenty-five (25) years or more, shall be exempt from taxation under chapter 4, part 2 of this title.

[Acts 2000, ch. 681, §§ 1, 2; 2001, ch. 164, § 1; 2007, ch. 159, § 1; 2007, ch. 496, § 1.]