Section 0780-01-81-.10 - GROUNDS FOR DENIAL, SUSPENSION, OR REVOCATION OF CERTIFICATE OF AUTHORITY(1) The certificate of authority or license of a third party administrator may be denied, suspended, or revoked if the Commissioner finds that the third party administrator:(a) Has violated any lawful rule or order of the Commissioner or any provision of the insurance laws of this state specifically applicable to third party administrators;(b) Is in an unsound financial or operational condition. The Commissioner, in evaluating the financial or operational condition of a third party administrator, may utilize the criteria contained in Chapter 0780-01-66. The Commissioner may consider such other factors in evaluating the financial or operational condition of a third party administrator deemed to be appropriate;(c) Is using such methods or practices in the conduct of its business so as to render its further transaction of business in this state hazardous or injurious to insured persons or the public;(d) Has failed to pay any judgment rendered against it in this state within sixty (60) days after the judgment has become final;(e) Has refused to be examined or to make available its accounts, records and files for examination, or if any individual responsible for the conduct or affairs of the third party administrator, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly ten percent (10%) or more of the voting stock, voting securities or voting interest of the third party administrator; and any other person who exercises control or influence over the affairs of the third party administrator; has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to an examination, when required by the Commissioner;(f) Has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered employees to accept less than the amount due them or caused covered employees to employ attorneys or bring suit against the third party administrator or employer or pool to secure full payment or settlement of such claims;(g) At any time fails to meet any qualification for which issuance of the certificate could have been refused had the failure then existed and been known to the Commissioner;(h) If any of the individuals responsible for the conduct of its affairs, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly ten percent (10%) or more of its voting stock, voting securities or voting interest; and any other person who exercises control or influence over its affairs; has been convicted of, or has entered a plea of guilty or nolo contendere to, a felony without regard to whether adjudication was withheld;(i) Is under suspension or revocation in another state; or(j) Has failed to timely file its annual renewal application pursuant to Rule 0780-01-81-.09.(2) The Commissioner may, in his or her discretion after making the finding required by T.C.A. § 4-5-320 that public health, safety or welfare imperatively requires emergency action, and without advance notice or hearing, immediately suspend the certificate of authority or license of a third party administrator if the Commissioner finds that one or more of the following circumstances exist:(a) The third party administrator is insolvent or impaired;(b) A proceeding for receivership, conservatorship, rehabilitation, or other delinquency proceeding regarding the third party administrator has been commenced in any state; or(c) The financial condition or business practices of the third party administrator otherwise pose an imminent threat to the public health, safety, or welfare of the residents of this state.(3) Any action by the Commissioner to suspend or revoke a certificate of authority pursuant to this Chapter shall be governed by the Uniform Administrative Procedures Act, compiled in T.C.A. §§ 4-5-101, et seq.(4) The Commissioner may serve a notice or order in any action arising under this Chapter by registered or certified mail to the third party administrator at the address of record in the files of the Commissioner. Service in the manner set forth herein shall be deemed to constitute service and reasonable notice to such third party administrator or applicant. The Commissioner may also serve notice of such action to all known employers or pools serviced by the third party administrator.(5) Nothing in this Rule shall be deemed to create a private cause of action against a third party administrator.Tenn. Comp. R. & Regs. 0780-01-81-.10
Original rule filed September 12, 2005; effective November 26, 2005.Authority: T.C.A. §§ 50-6-405(b), 50-6-405(c), 50-6-405(h) and 4-5-320.