(a) Any person who, knowingly and with intent to defraud, and for the purpose of depriving another of property or for pecuniary gain, commits, participates in or aids, abets, or conspires to commit or solicits another person to commit, or intentionally permits its employees or its agents to commit any of the following acts, has committed a fraudulent insurance act:

Terms Used In Tennessee Code 56-53-102

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Department: means the department of commerce and insurance. See Tennessee Code 56-1-102
  • Insurance policy: means the written instrument in which are set forth the terms of any certificate of insurance, binder of coverage or contract of insurance, including a certificate, binder or contract issued by a state-assigned risk plan, benefit plan, nonprofit hospital service plan, health maintenance organization, motor club service plan, or surety bond, cash bond or any other alternative to insurance authorized by a state's financial responsibility act. See Tennessee Code 56-53-101
  • Insurance professional: means sales agents, managing general agents, brokers, producers, adjusters and third-party administrators. See Tennessee Code 56-53-101
  • Insurance transaction: means a transaction by, between or among:
    (A) An insurer or a person who acts on behalf of an insurer. See Tennessee Code 56-53-101
  • Insurer: includes , but is not limited to, an insurance company, self-insurer, reinsurer, reciprocal exchange, interinsurer, risk retention group, Lloyd's insurer, fraternal benefit society, surety, medical service, health maintenance organization, dental, optometric or any other similar health service plan, and any other legal entity engaged or purportedly engaged in the business of insurance, including any person or entity that falls within the definition of "insurer" found within this title. See Tennessee Code 56-53-101
  • Person: means a natural person, company, corporation, unincorporated association, partnership, professional corporation, agency of government and any other entity. See Tennessee Code 56-53-101
  • Premium: includes any payments, whether due within the insurance policy term or otherwise, and deductible payments, whether advanced by the insurer or insurance professional and subject to reimbursement by the insured or otherwise, any self-insured retention or payments, whether advanced by the insurer or insurance professional and subject to reimbursement by the insured or otherwise, and any collateral or security to be provided to collateralize obligations to pay any of the above. See Tennessee Code 56-53-101
  • Premium finance company: means a person engaged or purporting to engage in the business of advancing money, directly or indirectly, to an insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, including but not limited to loan contracts, notes, agreements or obligations, wherein the insured has assigned the unearned premiums, accrued dividends, or loss payments as security for the advancement in payment of premiums on insurance policies only, and does not include the financing of insurance premiums purchased in connection with the financing of goods and services. See Tennessee Code 56-53-101
  • Premium finance transaction: means a transaction by, between or among an insured, a producer or other party claiming to act on behalf of an insured and a third-party premium finance company, for the purposes of purportedly or actually advancing money directly or indirectly to an insurer or producer at the request of an insured pursuant to the terms of a premium finance agreement, wherein the insured has assigned the unearned premiums, accrued dividends or loan payments as security for the advancement in payment of premiums on insurance policies only, and does not include the financing of insurance premiums purchased in connection with the financing of goods and services. See Tennessee Code 56-53-101
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
(1) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, by or on behalf of an insured, claimant or applicant to an insurer, insurance professional or premium finance company in connection with an insurance transaction or premium finance transaction, any information that contains false representations as to any material fact, or that withholds or conceals a material fact concerning any of the following:

(A) The application for, rating of, or renewal of, any insurance policy;
(B) A claim for payment or benefit pursuant to any insurance policy;
(C) Payments made in accordance with the terms of any insurance policy; or
(D) The application used in any premium finance transaction;
(2) Presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, insurance professional or a premium finance company in connection with an insurance transaction or premium finance transaction, any information that contains false representations as to any material fact, or that withholds or conceals a material fact, concerning any of the following:

(A) The solicitation for sale of any insurance policy or purported insurance policy;
(B) An application for certificate of authority;
(C) The financial condition of any insurer; or
(D) The acquisition, formation, merger, affiliation or dissolution of any insurer;
(3) Solicits or accepts new or renewal insurance risks by or for an insolvent insurer;
(4) Removes the assets or records of assets, transactions and affairs or a material part of the assets or records, from the home office or other place of business of the insurer, or from the place of safekeeping of the insurer, or destroys or sequesters the same from the department; or
(5) Diverts, misappropriates, converts or embezzles funds of an insurer, an insured, claimant or applicant for insurance in connection with:

(A) An insurance transaction;
(B) The conduct of business activities by an insurer or insurance professional; or
(C) The acquisition, formation, merger, affiliation or dissolution of any insurer.
(b) It shall be unlawful for any person to commit, or to attempt to commit, or aid, assist, abet or solicit another to commit, or to conspire to commit a fraudulent insurance act.
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