TENNESSEE. STATE REQUIREMENTS. AGENTS DEFINED-Laws of 1907, Chap. 442. "That any person who shall solicit an application for insurance shall, in all matters relating to such application, and the policy issued in consequence thereof, be regarded as an agent of the company issuing the policy and not the agent of the insured, and all provisions in the application and policy to the contrary are void and of no effect whatever. Provided, this act shall not apply to licensed fire insurance brokers." Person receiving commission is an agent. AGENTS' LICENSES-Chap. 160, Sec. 31, Acts of 1895. "That it shall not be lawful for any person or persons to act as agent or solicit risks, or in any way, directly or indirectly, to transact the business of insurance for and in behalf of any company, whether organized under and incorporated by the laws of this State or not, without obtaining a certificate of authority from the Insurance Commissioner of the State so to do, *** certificate herein referred to shall state that said company has fully complied with all the requirements of this act applicable to such company." Penalty for acting without a license, fine of not more than $100 or not less than $50, or punishment as a misdemeanor. Licenses expire April 1, and must be renewed annually. Agents are personally liable for risks placed in unauthorized companies. Penalties for violation, fine of $50 to $100. Penalty for acting for unauthorized company, fine of $100 to $200, or imprisonment for not over thirty days, or both. Each member of a firm must have a license, as must also each solicitor, for each company represented. Every corporation which acts as an insurance agent must be licensed for each company it represents, and also each of its solicitors. Applications for license required to be made by company officials, under seal. ANNUAL STATEMENTS-Must be filed on or before February 1, covering the preceding year ending December 31. For good cause the time may be extended to March 1. Penalty for neglect to file statement, $100 for each day, and license may be suspended, upon notice, during default. Penalty for wilfully making false statement, $500 to $1000; and person making oath to such statement is guilty of perjury. A statement concerning capital, etc., must be filed annually, on or before July 1, with the Secretary of State. Licenses of all foreign fire companies expire on April 1. ANTI-COINSURANCE-Chapter 447, Acts of 1909. Sec. 1. Sec. 1. "All corporations, firms or individuals doing a fire insurance business in this State shall, with respect to policies issued from and after the passage of this Act on buildings or property in this State, other than stocks of goods and merchandise and other species of personal property changing in specific and quantity by the usual custom of trade, be bound to pay the full amount of the policy in the event of a total loss of such buildings or property; and provided further, that the provisions of this section shall not be applicable to policies containing a co-insurance clause as authorized hereinafter; and provided further, that the insurer shall have the right to stipulate in the policy the insurable value of the property insured and that any policy containing such stipulation shall be avoided if at the time of the loss the whole amount of insurance on such property shall be in excess of such stipulated insurable value." Sec. 2. "It shall be lawful for corporations, firms or individuals doing a fire insurance business in the State to contract with the assured, in respect of insurance on stocks of goods and merchandise and other species of personal property changing in specifics and quantity by the usual custom of trade, that in the event of loss the insurer shall not be liable for an amount greater than three-fourths of the actual cash value of the property covered by each item of the policy at the time of such loss, and that in the case of other insurance, and whether the policies are concurrent or not, the insurer shall be liable only for its pro rata proportion of such three-fourths value, and in no event for an amount greater than the sum insured by the policy; provided, however, that such contract shall not be binding on the assured unless its presence in the policy is indicated by the words 'Three-fourths value Contract,' printed or stamped in capital letters, and in red ink, across the face of the policy." Sec. 3. "It shall be lawful for corporations, firms or individuals doing a fire insurance business in this State to contract with the assured that the assured shall during the life of such contract, maintain insurance upon the property insured to the extent of an agreed proportion of the actual cash value of the property at the time that a fire occurs, and that the assured, if he shall fail to do so, shall be a co-insurer to the extent that his insurance then in force is less than the amount of such agreed proportion, and to that extent shall, as such co-insurer bear his part of any loss; provided, however, that the acceptance of such contract shall be optional with the assured, which will be conclusively presumed if its presence in the policy is indicated by the words 'Co-insurance Contract' printed or stamped in capital letters, and in red ink across the face of the policy." ANTI-COMPACT—Chap. 479, Acts of 1905. Sec. 1. "That it shall be unlawful for any two or more fire insurance companies doing business in Tennessee, or any two or more agents, or representatives of fire insurance companies doing business in Tennessee, to enter into any contract, compact or agreement looking to the maintaining of any specific rates to be charged for insurance on any property located in this State. Provided, that this act shall not be so construed as to prohibit the formation of associations of fire insurance agents in any city, town or county in this State for the purpose of minimizing expenses by the employment of joint inspectors or experts for preparing rating schedules and designating improvements, with a view to the reduction of the cost of insurance; provided, that all rates which may be suggested through such associations shall be advisory only, and not binding on any member thereof; provided, further, that if any board of agents, or agent or company attempt to impose any fine upon any agent or company who shall refuse to write at any rate other than that fixed by such board shall be guilty of a misdemeanor and subject to a fine not less than $50." Sec. 2. "That it shall be unlawful for any one or more agents, or association of fire insurance agents in any city, town or county of this State to impose any penalty upon any agent because of any rate which may be charged for insurance by said. agent or any member of said association." Sec. 3. "That any fire insurance company doing business in Tennessee found guilty of a violation. of Sec. 1 of this act shall be subject to a penalty in a sum of not less than $100 nor exceeding $1000, * and in addition the company so offending shall be subject to the revocation of its license to do business in this State, in the discretion of the Insurance Commissioner." Sec. 4. "That any agent or officer of any association of agents violating the provisions of Sec. 2 of this act shall be guilty of a misdemeanor and shall, upon conviction, be fined not less than $100 nor more than $500." The Insurance Commissioner, upon complaint of any citizen of the State, or upon his own initiative, may investigate as to violations of this act. ANTI-DISCRIMINATION-No provision. ATTORNEY-The Insurance Commissioner must be authorized to accept service of legal process. Companies not licensed in the State, but doing business through licensed brokers, must agree to appoint an attorney in any county in which a loss claimant resides who wishes to begin suit, or in the county where the loss occurs. CANCELLATION OF POLICY-No law on this subject. CAPITAL REQUIRED-Company must possess at least $100,000 capital or surplus above all liabilities, which must be certified to be well invested by the Insurance Commissioner of the State in which the company was organized. COMMISSIONS TO NON-RESIDENTS—Commissions must be received by resident agents. The Attorney-General ruled, in August, 1915, that the State was not concerned with the question of division of commissions. DEPOSIT-None required, except that companies of foreign countries must have at least $200,000 deposited with the proper official of one of the United States. (Nature of securities not specified.) DOMESTIC COMPANIES-Chap. 160, Sec. 13, Acts of 1895. 66 * Insurance companies other than life, chartered by the laws of this State, shall not be allowed to transact business in this State unless possessed of at least $50,000 paid-up actual cash capital; or in lieu of cash capital, a surplus, above all liabilities, including reinsurance reserve, of not less than $50,000; it being understood that this section does not apply to companies organized under the laws of this State prior to the passage of this act, and actually engaged in the transaction of insurance business." EXAMINATIONS—A domestic company must be examined at least once in three years, and also upon request of five or more stockholders or persons pecuniarily interested therein, with affidavit of their belief, and reasons therefor, that the company is in unsound condition. Other State and foreign companies may be examined when the Commissioner deems it advisable. "Any insurance company examined under the provisions of this act shall pay the proper charges incurred in such examination, including the expenses of the Insurance Commissioner, or his deputy, and the expenses and compensation of his assistants employed therein; the compensation of no expert for examining the books or business of any local company shall exceed $10 per day." Mutual companies may be examined on the request of five members, or two directors, or the president or the secretary. If a "foreign" company is found to be in unsound condition, its license may be revoked. Domestic companies may be restrained by an injunction, should this be deemed necessary by the court. Penalty for obstructing examination, fine of not more than $500. FEES-For each company filing copy of charter or deed of settlement and financial statement, $30; for each statement, $15; for certificate or renewal thereof to an insurance agent (license required for each member of a firm, or agency), $2; for each seal of office, with certificate, $1; for copies of papers on file, 20 cents per folio; for filing copy of charter and other preliminary papers, assessment mutual companies, $15; for filing annual statement, assessment mutual companies, $10. Reciprocal provision. Examinations, proper charges; no expert to receive over $10 per day for examining any local company. The foregoing fees are payable to the Insurance Commissioner. On admission, a stock company files a certified copy of articles of incorporation with the Secretary of State and pays him a fee of $20, also paying him a privilege tax of $100, the latter being in lieu of the former tax on capital stock. An annual tax upon authorized capital stock is payable to the Secretary of State as follows: $5 on capital of $25,000 or less; $10 on $25,001 to $50,000; $20 on $50,001 to $100,000; $30 on $100,001 to $249,999; $50 on $250,000 to $499,999; $100 on $500,000 to $999,999; $150 on $1,000,000 or more. Domestic companies pay one-tenth of one per cent on authorized capital stock. FIRE DEPARTMENT TAX-See "Taxes." FIRE MARSHAL-Provision is made for investigation of fires by the Fire Prevention Commission. (Act of 1915.) FOREIGN COMPANIES' HOME OFFICE STATEMENTS-None required. GENERAL PENALTY-Chap. 160, Sec. 12. "That the authority of a foreign insurance company may be revoked if it shall violate or neglect IMPAIRMENT-Chap. 160, Sec. 6. "That whenever it appears to the Insurance Commissioner that the capital stock of a domestic insurance company is impaired to the extent of twenty per cent or more, he shall notify the company that its capital is legally subject to be made good; and if such company shall not, within sixty days after such notice, satisfy him that it has fully repaired its capital, or reduced its capital, as provided by law, he shall institute proceedings against it in accordance with the preceding section." See "General Penalty." INVESTMENTS PRESCRIBED-Capital and surplus funds must be invested in "good available securities." LICENSED BROKERS-Chap. 160, Sec. 41. "That none but bona fide residents of this State, of good moral character and competent business qualifications, shall be licensed as insurance brokers. ***" Brokers must take oath to deal justly and uprightly and not attempt to deceive customers as to standing of companies. They must file copies of the charters and statements of companies which they intend to do business with, and pay the same fees required of regularly authorized companies. Brokers must file tax statements, verified by company officials, and failure to file such statement, or to pay a loss judgment, or the insolvency of the company, forfeits its right to do business through the broker. Broker must file bond of $1000 to secure payment of taxes. Penalty for acting as broker without license, or otherwise violating the law relating to brokers, fine of not less than $100, or imprisonment for not less than thirty days, or both. LIMIT ON A SINGLE RISK-None. LLOYDS-Chap. 160, Sec. 15. “That associations of individuals, citizens of the United States, whether organized within the State or elsewhere within the United States, formed upon the plan known as Lloyds, whereby each associate underwriter becomes liable for a proportionate part of the whole amount insured by policy, may be authorized to transact insurance other than life in this State, in like manner and upon the same terms and conditions as are required of, and imposed upon, insurance companies of the United States or one of the United States; provided, however, that all such Lloyds, whether organized within this State or elsewhere in the United States, not having an actual paid-up cash capital, shall make the same deposit and upon the same terms and conditions as is required by Sec. 10 (that company must have deposit of $200,000 with some State of the United States) of foreign insurance companies incorporated, or associated under, the laws of any government or State other than the United States or one of the United States." See "Reciprocal Insurance." MISCELLANEOUS-No misrepresentation shall be deemed material unless made with actual intent to deceive, or unless the matter represented increase the risk of loss. A penalty of twenty-five per cent on the liability on a loss may be imposed for non-payment within sixty days, if refusal to pay is made in bad faith; while a policyholder bringing suit for such |