Tennessee § 56-51-137 - Insolvency protection.

§ 56-51-137. Insolvency protection.

Except as required in subsection (b), each prepaid limited health service organization must deposit with the department cash or securities of the type eligible under § 56-32-111, which must have at all times a market value in the amount set forth in this subsection (a). The amount of the deposit shall be reviewed annually or more often as the department deems necessary. The market value of the deposit must be that which is prescribed in § 56-32-112(b). If securities or assets deposited by a prepaid limited health service organization under this chapter are subject to material fluctuations in market value, the department may in its discretion require the organization to deposit and maintain on deposit additional securities or assets in an amount as may be reasonably necessary to assure that the deposit will at all times have a market value of not less than the amount specified under § 56-32-112(b). If for any reason the market value of assets and securities of a prepaid limited health service organization held on deposit under this chapter falls below the amount required, the organization must promptly deposit other or additional assets or securities eligible for deposit sufficient to cure the deficiency. If the prepaid limited health service organization has failed to cure the deficiency within thirty (30) days after receipt of notice by certified mail from the department, the department may revoke the certificate of authority of the prepaid limited health service organization. A prepaid limited health service organization may, at its option, deposit assets or securities in an amount exceeding its deposit required or otherwise permitted under this chapter for the purpose of absorbing fluctuations in the value of securities and assets deposited and to facilitate the exchange and substitution of securities and assets. During the solvency of the prepaid limited health service organization, any excess must be released to the organization upon its request. During the insolvency of the prepaid limited health service organization, any excess deposit may be released to the commissioner as receiver, rehabilitator, or liquidator as provided under chapter 9 of this title. All income from deposits shall be an asset of the organization. A prepaid limited health service organization that has been allowed by the department to make a securities deposit may withdraw that deposit or any part of the deposit after making a substitute deposit of cash, securities, or any combination of these or other measures of equal amount and value as approved by the department. Acts 2000, ch. 948, § 37. Code Commission Notes. Acts 2000, ch. 948, § 37 may be effective June 23, 2000, as to entities already doing business with the state as of June 23, 2000, and required to be licensed under the act as of January 1, 2001. Compiler's Notes. Acts 2000, ch. 948, § 56, provided that Acts 2000, ch. 948, § 37 (compiled as this section), shall apply June 23, 2000, to any entity required to be licensed under this chapter and under a contract with the state on June 1, 2000 to provide services to Title XIX program recipients. For all other purposes, this chapter shall become effective January 1, 2001.