(a)

Terms Used In Tennessee Code 56-7-1405

  • Department: means the department of commerce and insurance. See Tennessee Code 56-1-102
  • Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
(1) An insurance company or agent that commits an unfair or deceptive act in the sale or offering for sale or administration of medicare supplement insurance shall be subject to the Consumer Protection Act, compiled in title 47, chapter 18, part 1, except for §§ 47-18-106 – 47-18-108, the second sentence of § 47-18-115, and the following language from § 47-18-113(a):

provided, that this part shall not alter, amend, or repeal the provisions of the Uniform Commercial Code relative to express or implied warranties or the exclusion or modification of such warranties.

(2) However, nothing in this part shall require or authorize the consumer affairs division to duplicate the services being provided or the regulatory authority being exercised by the insurance division of the department.
(b) In the sale, offering for sale or administration of medicare supplement insurance, unfair or deceptive acts include, but are not limited to:

(1) In the case of the insurance agent:

(A) Misrepresenting the terms of the policy;
(B) Inaccurately filling out an insurance application when the agent knows or has reason to know it is inaccurate;
(C) Failing to comply with all requirements of this part;
(D) Knowingly selling duplicative policies to a policyholder without an increase in benefits, which includes a requirement that the policies pay to the full extent of benefits notwithstanding the existence of other coverage;
(E) Knowingly selling a medicare supplement insurance policy to someone who receives medicaid, unless the applicant represents in writing to the agent that the applicant has a reasonable expectation of losing medicaid coverage due to an increase in income or resources or a change in living situation. The insurance agent or company must promptly notify the department and give the name and address of those individuals who have purchased a policy in conjunction with medicaid;
(F) Selling a medicare supplement insurance policy to someone who already has a medicare supplement insurance policy, unless the new policy covers preexisting conditions to the extent of the existing policy immediately or within the time limits of the existing policy; and
(G) Selling a medicare supplement insurance policy to someone who already has a medicare supplement insurance policy, unless the policy provides for an increase in benefits or a decrease in premiums or is to replace a policy where the applicant is not satisfied with the service received; and
(2) In the case of a company:

(A) Failing to ask in the application whether the applicant receives medicaid. In the case of direct response insurers, the question may be asked in a supplement to the application;
(B) Failing to ask in the application whether the applicant has a medicare supplement insurance policy. In the case of direct response insurers, the question may be asked in a supplement to the application;
(C) Encouraging agents to:

(i) Sell duplicative or replacement policies that are in violation of this part or rules promulgated under this part;
(ii) Commit unfair or deceptive acts; or
(iii) Both;
(D) Using advertising or outlines of coverage, or both, that have not been filed with the department in accordance with its rules and regulations or that have been disapproved by the department in accordance with the rules; and
(E) Failing to comply with all requirements of this part.
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