Tenn. Comp. R. & Regs. 0780-01-54-.22 - SUSPENSION OR REVOCATION OF CERTIFICATE OF AUTHORITY

(1) After notice and an opportunity for a hearing, the Commissioner may revoke or suspend the certificate of authority or a license issued under this Chapter upon a finding that any of the following exists:

(a) The pool is in a hazardous financial condition. The Commissioner, in evaluating the financial or operational condition of a pool, may utilize the criteria for evaluating the financial or operation condition of a pool contained in Chapter 0780-1-66. The Commissioner may consider such other factors in evaluating the financial condition of a pool as he/she may deem appropriate;

(b) The pool has failed to pay any premium tax, regulatory penalty or assessment imposed upon the pool at the time when such obligations are owed;

(c) The pool has failed to cooperate in any examination or investigation initiated by the Commissioner pursuant to Rule 0780-01-54-.20;

(d) The pool, the pool's administrator, or an officer or director thereof, or any member of the pool's board of trustees has failed to comply with any of the provisions of this Chapter or with any lawful order of the Commissioner, including those issued pursuant to Rules 0780-01-54-.21 and 0780-01-54-.24, within the time prescribed;

(e) The pool, the pool's administrator, or an officer or director thereof, or any member of the pool's board of trustees has provided incorrect, misleading, or incomplete and materially untrue information to the Commissioner;

(f) The pool's administrator, or an officer or director thereof, or any member of the pool's board of trustees has been convicted of a felony deemed by the Commissioner to be related to the person's overall fitness to serve in that capacity and the pool has failed to remove the administrator or board member;

(g) The pool has committed an insurance unfair trade practice or fraud, as defined in

T.C.A. § 56-8-104;

(h) The administrator is not sufficiently qualified or has not employed persons sufficiently qualified to administer a pool;

(i) The pool fraudulently obtained its certificate of authority;

(j) The pool made a misrepresentation in the application for the certificate of authority;

(k) The pool, the pool's administrator or any member of the pool's board of trustees has misappropriated, converted, illegally withheld, or refused to pay over upon proper demand any monies that belong to a member, an employee of a member, or a person otherwise in its fiduciary capacities; or

(l) The pool uses a third party administrator that is lacking any licensed required by the Commissioner.

(2) As provided by T.C.A. § 56-2-305, with respect to any pool licensed or required to be licensed under this Chapter, and in addition to or in lieu of any action taken in Rule 0780-01-54-.21 or Paragraph (1) of this Rule, the Commissioner may assess a civil penalty against such pool in an amount of not more than one thousand dollars ($1,000) for each violation, but not to exceed an aggregate penalty of one hundred thousand dollars ($100,000), unless the pool knowingly violates a statute, rule or order, in which case the penalty shall not be more than twenty-five thousand dollars ($25,000) for each violation, not to exceed an aggregate penalty of two hundred fifty thousand dollars ($250,000). Each day of continued violation constitutes a separate violation for purposes of computing such penalty. This paragraph does not apply where a statute specifically provides for other civil penalties for the violation.

(3) The Commissioner may serve a notice or order in any action arising under this part by registered or certified mail to the pool's administrator and/or board of trustees at the address of record in the files of the Commissioner. Service in the manner set forth herein shall be deemed by the Commissioner to constitute service and reasonable notice to such pool or applicant.

Notes

Tenn. Comp. R. & Regs. 0780-01-54-.22

Original rule filed August 31, 2005; effective November 14, 2005. Amendment filed December 31, 2008; effective March 16, 2009.

Authority: T.C.A. §§ 50-6-405(c) and (h), and 56-2-305.