The commissioner shall issue a license upon compliance with this chapter and other proper requirements of the commissioner, and upon being satisfied that:

(1) The applicant is established as a bona fide nonprofit hospital service corporation and the service rendered by the corporation is not an unnecessary duplication of similar service in the community served, and is desirable for public necessity and convenience, and hospital contracts have been obtained, if possible, in the finding of the commissioner, with hospitals representing a majority of the bed capacity in the area where members are enrolled, and a fair opportunity has been given to all institutions of standing in the area to be served, to become member hospitals;

Terms Used In Tennessee Code 56-28-106

  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-1-102
  • Contract: A legal written agreement that becomes binding when signed.
  • 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.
  • Subscriber: means a person obligated under a reciprocal insurance agreement. See Tennessee Code 56-16-102
(2) A provision has been made in the subscriber‘s contract authorizing hospital service in hospitals other than participating hospitals, in which case money benefits shall be provided as specified in subscriber’s contract and approved as fair by the commissioner;
(3) Member hospitals of a hospital service plan agree to render service benefits of the plan of which it is a member at the agreed payment schedule to all subscribers; and
(4) The rates charged and benefits to be provided are to be fair, reasonable and not unfairly discriminatory. Rates may differ between subscribers in recognized groups and subscribers not in groups, all subject as above to the review and approval or disapproval of the commissioner as provided in §§ 56-26-102 and 56-26-202 and any rules promulgated under that section. Sections 56-26-102 and 56-26-202 and related rules shall apply to all hospital service plans in the same manner as to accident and sickness policies subject to §§ 56-26-102 and 56-26-202.
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