Tennessee Code Annotated
Tenn. Code Ann. § 56-9-201 (2024)
Grounds for filing by commissioner - Court order
✓ Justia copy: laws through about 2024 (2025 and 2026 sessions missing)
- (a) The commissioner may file in the chancery court of Davidson County a petition alleging, with respect to a domestic insurer:
- (1) That there exists any grounds that would justify a court order for a formal delinquency proceeding against an insurer under this part;
- (2) That the interests of policyholders, creditors or the public will be endangered by delay; and
- (3) The contents of an order deemed necessary by the commissioner.
- (b) Upon a filing under subsection (a), the court may issue forthwith, ex parte and without a hearing, the requested order, which shall direct the commissioner to take possession and control of all or a part of the property, books, accounts, documents and other records of an insurer, and of the premises occupied by it for transaction of its business; and, until further order of the court, enjoin the insurer and its officers, managers, agents and employees from disposition of its property and from the transaction of its business except with the written consent of the commissioner.
- (c) The court shall specify in the order what its duration shall be, which shall be the time as the court deems necessary for the commissioner to ascertain the condition of the insurer. On motion of either party or on its own motion, the court may from time to time hold hearings as it deems desirable after notice as it deems appropriate, and may extend, shorten or modify the terms of the seizure order. The court shall vacate the seizure order if the commissioner fails to commence a formal proceeding under this chapter after having had a reasonable opportunity to do so. An order of the court pursuant to a formal proceeding under this chapter shall ipso facto vacate the seizure order.
- (d) Entry of a seizure order under this section shall not constitute an anticipatory breach of any contract of the insurer.
- (e) An insurer subject to an ex parte order under this section may petition the court at any time after the issuance of the order for a hearing and review of the order. The court shall hold such a hearing and review not more than fifteen (15) days after the request. A hearing under this subsection (e) may be held privately in chambers, and it shall be so held if the insurer proceeded against so requests.
- (f) If, at any time after the issuance of such an order, it appears to the court that any person whose interest is or will be substantially affected by the order did not appear at the hearing and has not been served, the court may order that notice be given. An order that notice be given shall not stay the effect of any order previously issued by the court.
Acts 1991, ch. 142, § 4.
Notes of Decisions
Cited in 2
cases, 2003–2011 · leading case: In Re Med. Care Mgmt. Co., 361 B.R. 863 (Bankr. M.D. Tenn. 2003).
In Re Med. Care Mgmt. Co., 361 B.R. 863 (Bankr. M.D. Tenn. 2003). “The Chancery Court of Davidson County alone may issue orders for liquidation and seizure of assets such as those issued by the Chancery Court against the respondents, TCCN, MCMC, and AHS (T.C.A. § 56-9-201). The Chancery Court of Davidson County alone (T.”
Leslie Newman, Comm'r of the Tennessee Dep't of Com. & Ins. v. Smart Data Solutions, LLC, No. M2010-01938-COA-R3-CV (Tenn. Ct. App. June 3, 2011). “On the basis of the petition, the application, and the supporting exhibits and affidavits, the court found that seizure was appropriate under Tenn. Code Ann. § 56-9-201 and entered an order ex parte permitting the Commissioner to seize SDS, ATA, ATA LLC, and SAA.”
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