56-3-102 - Life insurance companies Contingency reserves Accumulation and maintenance Capital and surplus Limitations Exceptions.
56-3-102. Life insurance companies Contingency reserves Accumulation and maintenance Capital and surplus Limitations Exceptions.
(a) Any life insurance corporation doing business in this state may accumulate and maintain, in addition to an amount equal to the net values of its policies computed according to the laws of the jurisdiction under which it is organized, a contingency reserve not exceeding the following respective percentages of the net values:
(1) When the net values are less than one hundred thousand dollars ($100,000), twenty percent (20%) of the net values or the sum of ten thousand dollars ($10,000), whichever is greater;
(2) When the net values are greater than one hundred thousand dollars ($100,000), the percentage of the net values measuring the contingency reserve shall decrease:
(A) One half of one percent (0.5%) of each one hundred thousand dollars ($100,000) of the net values up to one million dollars ($1,000,000);
(B) One half of one percent (0.5%) for each additional one million dollars ($1,000,000) up to ten million dollars ($10,000,000); and
(C) One half of one percent (0.5%) for each additional two million five hundred thousand dollars ($2,500,000) up to fifteen million dollars ($15,000,000); and
(3) If the net values equal or exceed fifteen million dollars ($15,000,000), the contingency reserve shall not exceed ten percent (10%) of the net values.
(b) (1) As the net values of the policies increase and the maximum percentage measuring the contingency reserve decreases, the corporation may maintain the contingency reserve already accumulated under this section, although for the time being it may exceed the maximum percentage prescribed in this section, but may not add to the contingency reserve when the addition will bring it beyond the maximum percentage.
(2) Nothing in this section shall be construed to affect any existing surplus or contingency reserves held by the corporation, except that whenever the existing surplus and contingency reserves, exclusive of the net values and all accumulations held on account of existing deferred dividend policies or groups of such policies, exceeds the limit mentioned in subsection (a), it shall not be entitled to maintain any additional contingency reserve.
(3) For cause shown, the commissioner may, at any time and from time to time, permit any corporation to accumulate and maintain a contingency reserve in excess of the limit mentioned in subsection (a) for a prescribed period, not exceeding one (1) year under any one (1) permission, by filing in the commissioner's office a decision stating the reasons for the excess and causing the excess to be published in the commissioner's next annual report.
[Acts 1907, ch. 454, § 2; 1925, ch. 66, § 1; Shan., § 3348a34; Code 1932, § 6209; T.C.A. (orig. ed.), § 56-215; impl. am. Acts 1971, ch. 137, § 2; T.C.A. (orig. ed.), § 56-304.]