Tennessee Code Annotated

Tenn. Code Ann. § 56-9-305 (2026)

Order of liquidation - Termination of rehabilitation

✓ current as of May 2026

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(a) Whenever the commissioner believes further attempts to rehabilitate an insurer would substantially increase the risk of loss to creditors, policyholders or the public, or would be futile, the commissioner may petition the chancery court of Davidson County for an order of liquidation. A petition under this subsection (a) shall have the same effect as a petition under § 56-9-306. The chancery court of Davidson County shall permit the directors of the insurer to take actions as are reasonably necessary to defend against the petition and may order payment from the estate of the insurer of the costs and other expenses of defense as justice may require.

(b) The protection of the interests of insureds, claimants and the public requires the timely performance of all insurance policy obligations. If the payment of policy obligations is suspended in substantial part for a period of six (6) months at any time after the appointment of the rehabilitator, and the rehabilitator has not filed an application for approval of a plan under § 56-9-303(e), the rehabilitator shall petition the court for an order of liquidation on grounds of insolvency.

(c) The rehabilitator may at any time petition the chancery court of Davidson County for an order terminating rehabilitation of an insurer. The court shall also permit the directors of the insurer to petition the court for an order terminating rehabilitation of the insurer and may order payment from the estate of the insurer of such costs and other expenses of the petition as justice may require. If the chancery court of Davidson County finds that rehabilitation has been accomplished and that grounds for rehabilitation under § 56-9-301 no longer exist, it shall order that the insurer be restored to possession of its property and the control of the business. The chancery court of Davidson County may also make that finding and issue that order at any time upon its own motion.

Acts 1991, ch. 142, § 4.

Notes of Decisions

Cited in 4 cases, 1996–2011 · leading case: State Ex Rel. Sizemore v. United Physicians Ins. Risk Retention Grp., 56 S.W.3d 557 (Tenn. Ct. App. 2001).

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State Ex Rel. Sizemore v. United Physicians Ins. Risk Retention Grp., 56 S.W.3d 557 (Tenn. Ct. App. 2001). · cites it 2× “Tenn.Code Ann. § 56-9-305(a); State ex rel.”

Bryant v. Shields, Britton & Fraser, 930 S.W.2d 836 (Tex. App. 1996). “See Tenn.Code Ann. § 56-9-305 (1994). That order terminated efforts to rehabilitate Anchorage and authorized the liquidation of Anchorage’s business.”

Leslie Newman, Comm'r of the Tennessee Dep't of Com. & Ins. v. Smart Data Solutions, LLC (Tenn. Ct. App. 2011). · cites it 4× “§§ 56-9 -301–337 govern formal proceedings and permit the Commissioner to petition the court for an order to rehabilitate the insurer under Tenn. Code Ann. § 56-9-301 and/or an order of liquidation under Tenn.”

State, ex rel v. Xantus (Tenn. Ct. App. 2000). · cites it 6× “” Tenn. Code Ann. § 56-9-305 (a). We repeat our observation that no court may entertain an action to liquidate an insurance company except on the -9- Commissioner’s petition.”

— Tenn. Code Ann. § 56-9-305(a) — 1 case

State Ex Rel. Sizemore v. United Physicians Ins. Risk Retention Grp., 56 S.W.3d 557 (Tenn. Ct. App. 2001). “Tenn.Code Ann. § 56-9-305(a); State ex rel.”

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