(a) Before any surety company is authorized to execute the bonds referred to in this chapter, it shall deposit in the office of the commissioner one hundred thousand dollars ($100,000) in lawful money of the United States, or an equal amount in the bonds of the United States, or of this state, the bonds to be estimated at their actual value, and the deposit shall be continually kept at that amount during the time the corporation or company remains bound upon any bond or obligation as contemplated in this chapter.
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b) The deposit shall be held by the commissioner as security for any liability incurred by the company making the deposit by reason of the breach of any bond or obligation referred to in this chapter; provided, that:
(1) The surety or guaranty company organized under the laws of any other state or government, and having a general deposit in some state of the United States of a sum not less than one hundred thousand dollars ($100,000) consisting of lawful money of the United States, or of an equal amount in the bonds of the United States, or of any state, the value of which shall be at or above par, as security for any liability incurred under this chapter, shall be required to keep on deposit only the sum of twenty-five thousand dollars ($25,000) in the state, consisting of lawful money of the United States, or an equal amount in the bonds of the United States, or of this state;(2) No deposit in this state shall be required of any company organized under the laws of any other state or government that has an actual paid-up cash capital of three hundred thousand dollars ($300,000), of which at least two hundred thousand dollars ($200,000) is invested in the bonds of the United States, or other good securities, to be itemized and certified as such by the commissioner of insurance of the state in which the sum is deposited, reckoning the same at their current market value, and to be approved by the commissioner of commerce and insurance, which two hundred thousand dollars ($200,000) shall be deposited with and held by the commissioner of insurance or other proper officer of some state of the United States as security for the protection of all policyholders and creditors in the United States;(3) The surety company organized under the laws of any other state, and having the general deposit, shall file with the commissioner of commerce and insurance a certificate from the officer of the state with whom the general deposit has been made, showing that the company has deposited with the officer the sums required in the lawful money of the United States, or an equal amount in the securities provided for in this section, for the benefit of all liabilities of the company in any or all states; and(4) The commissioner of commerce and insurance is authorized and directed to return to the surety company organized under the laws of any other state or government that has filed, or hereafter files, with the commissioner the certificates provided for in subdivision (b)(3), all securities that were deposited by the surety company with the state treasurer, and which funds or securities have, under § 56-15-106, been transferred to the commissioner of commerce and insurance, under this section.
