56-13-120 - Examinations and investigations.
56-13-120. Examinations and investigations.
(a) As often as once in five (5) years, the commissioner or any person authorized by the commissioner shall examine the financial condition, affairs, and management of any captive insurance company operating under the laws of this state. The commissioner shall also make an examination of the company whenever it is deemed prudent to do so. For the purpose of examination, the commissioner shall have free access to all the books, papers, and documents relating to the business of the company, and may summon witnesses and administer oaths and affirmations in the examination of the directors, trustees, officers, agents or employees of the company and any other person in relation to its affairs, transactions and conditions.
(b) Upon failure or refusal of any witness to obey any subpoena, the commissioner may petition the chancery court in Nashville, and, upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the order of the court shall be punishable as contempt of court.
(c) Any person knowingly or willfully testifying falsely in reference to any matter material to the investigation, examination or inquiry commits a Class A misdemeanor.
(d) Any director, trustee, officer, agent, or employee of a captive insurance company or any other person who knowingly or willfully makes any false certificate, entry, or memorandum upon any of the books or papers of any captive insurance company or upon any statement filed or offered to be filed in the department or used in the course of any examination, inquiry or investigation with the intent to deceive the commissioner or any person appointed by the commissioner to make the examination commits a Class A misdemeanor.
(e) The costs of all examinations made under this chapter shall be paid by the company as provided in § 56-1-413.
(f) The commissioner may also examine captive insurance companies upon the request of five (5) or more of the policyholders representing at least one hundred thousand dollars ($100,000) insurance in force, who shall make affidavit in writing of their belief, with specifications of their reasons for their belief, that the company is in an unsound or insolvent condition.
[Acts 1978, ch. 616, § 21; T.C.A., § 56-4520; Acts 1983, ch. 85, § 2; 1989, ch. 591, §§ 1-6.]