Tenn. Comp. R. & Regs. 0780-01-41-.06 - LIMITED SCOPE EXAMINATION AND INFORMAL VISITATION

(1) Pursuant to T.C.A. § 56-13-109(a) the commissioner may direct a limited scope examination be conducted upon a captive insurance company. Such an exam may be ordered when questions arise about a captive insurance company's solvency, governance, operating practices, or other specific areas that the commissioner may determine.

(2) The limited scope examination order shall identify the specific limited areas that the examination will cover. If, in the course of the examination, the examiner believes that the scope of the examination should be broadened, the examiner shall file a recommendation with the commissioner and with the captive insurance company under examination, which company shall have ten (10) days to file any response to the recommendation. The commissioner shall thereafter determine if the scope of the examination should be broadened and the additional areas that the examination should cover.

(3) A limited scope examination under this rule does not waive or extend the period of time between thorough examinations conducted pursuant to T.C.A. § 56-13-109. A copy of any limited scope examination reports should be reviewed and included in the thorough examination of any captive insurance company. However, within ten (10) days of issuance of the limited scope examination order, the captive insurance company may file an election with the commissioner to convert the examination to a thorough examination conducted pursuant to T.C.A. § 56-13-109(a).

(4) At the request of a captive insurance company, the commissioner may, in person or by designee, conduct an informal visitation of such captive insurance company. Such informal visitation may include, but is not limited to, a review of the books and records of the captive insurance company, review of governance, internal practices, controls, policies and procedures. A visitation may include a site visit to the captive insurance company's principal place of business, the offices of its captive manager, accountant, and/or principal or beneficial owner, or other service provider. At the conclusion of such a visitation, the commissioner or commissioner's designee shall send a report to the captive insurance company that shall include any suggestions or recommendations. This report shall be reviewed and included in the next subsequent thorough examination of the captive insurance company.

(5) The expenses and charges of any limited scope examination and informal visitation shall be paid by the captive insurance company.

Notes

Tenn. Comp. R. & Regs. 0780-01-41-.06

Original rule filed September 22, 2017; effective 12/21/2017.

Authority: T.C.A. §§ 56-1-409, 56-1-413, 56-13-101 through 56-13-418, 56-13-103, 56-13-108, 56-13-109, 56-13-115, and 56-13-121.