ANNOUNCEMENT 18 May 2017
In 2017 Tennessee elaborated upon an existing “reciprocity” law by which that state may impose sanctions on foreign insurance companies doing business in Tennessee when those companies’ home governments are found to restrict Tennessee insurance companies.
NUMBER OF INTERVENTIONS
On May 18, 2017 the governor of Tennessee signed into law a bill (SB1189) that elaborates upon an existing “reciprocity” law by which that state may impose sanctions on foreign insurance companies doing business in Tennessee when those companies’ home governments are found to restrict Tennessee insurance companies. SB1189 amends a law that provides for the imposition of a retaliatory tax by Tennessee on foreign insurance companies doing business in this state.
Under present law (Section 56-4-218 of Tennessee Code Annotated), when another state or foreign country imposes any premium, taxes, fees, fines, penalties, licenses, deposit requirements or other obligations, prohibitions, or restrictions upon Tennessee insurance companies, or their agents, doing business in that state or foreign country that are in excess of the obligations, prohibitions or restrictions imposed upon the insurance companies of that state or foreign country, or their agents, doing business or seeking to do business in Tennessee, the same obligations, prohibitions and restrictions of whatever kind will be imposed upon the companies of that state or foreign country, or their agents, doing business in Tennessee. The new bill elaborates upon that policy in several respects, most of them quite technical.
One important change is that all monetary charges or other obligations, however designated, must be included in calculating the burden imposed by the foreign state or country, regardless of whether Tennessee imposes a charge or obligation having the same or similar designation, method of calculation, or purpose. The existence of a charge or obligation imposed by Tennessee and having the same purpose as a charge or obligation imposed by a foreign state or country will, however, create a rebuttable presumption that a like charge or obligation levied by that foreign state or country is imposed on insurance companies.
The amendments also provide that the burden imposed on insurance companies by another state or foreign country will include all monetary charges and other obligations, regardless of how designated or described in the laws or regulations of that state or country, that require payme18-nt of such monetary charge or compliance with such other obligation by insurance companies.