Government & Legal Update

Advocacy Update: A Busy Session Concludes as We Emerge from the Pandemic

The 2021 session of the 112th General Assembly adjourned Wednesday, May 5, with the Legislature passing the 2021-22 appropriations bill the week prior. The $42.6 billion state budget reflects an improvement in economic outlook for Tennessee as it emerges from the COVID-19 pandemic. Some budget items of note include:

• $931 million for capital maintenance and improvements • $145 million for air/rail transportation infrastructure • $100 million in broadband funding • $100 million for local infrastructure • $37.9 million to fully fund TennCare growth • $5 million for health care safety net • $250 million for a Mental Health Trust Fund

The budget adds no new debt and extends the "Rainy-Day Fund" to $1.55 billion. The budget also includes significant investment in public-private partnerships through the use of one-time grant money. Click here to see the official press release from Governor Lee.

The legislature will reconvene on at 12:00 noon (CST) on January 11, 2022. Below is an overview of insurance-related legislation of interest.

Insurance Policies – Assignment of Benefits (SB1376) The bill clarifies that the rights, duties, or benefits provided by a policy of insurance issued under the present law insurance provisions may be assigned only as expressly provided by the terms of the policy of insurance or as otherwise expressly allowed by the insurer, except for assignment of benefits to health care providers pursuant to present law. The bill was promoted by the Farm Bureau in an effort to curtail “assignment of benefit” litigation experienced in other states

Liability of GC, Intermediate Contractor, or Sub (SB0629): The legislation adds that a general contractor, intermediate contractor, or subcontractor is not liable for workers' compensation to a construction services provider for injuries occurring during the time period of December 9, 2019, through September 9, 2021, if certain conditions are met. The became effective upon being signed by the Governor on April 7, 2021.

Work Comp - CSP Administration (SB1268) Transfers administration of construction service provider registration from the secretary of state to the bureau of workers compensation. The bill was signed by the Governor on April 7, 2021 and is effective January 1, 2022.

Work Comp - Attorney Fees (SB1576) This was a Tennessee Chamber of Commerce-backed bill that authorizes the court of workers compensation claims to award additional attorneys' fees and costs incurred when an employer wrongfully denies a claim or wrongfully fails to timely initiate benefits to which the employee or dependent is entitled for injuries that occur between July 1, 2021, and June 30, 2023. The bill was signed by the Governor on April 13, 2021 and is effective July 1, 2021.

Work Comp - Misclassification of Employees (SB1577) The bill makes non-substantive changes to how the bureau of workers compensation seeks to ensure applicable employers comply with workers compensation law, including, but not limited to, enforcement and penalties for non-compliance. Clarifies which funds penalty fee revenue is to be allocated. This legislation will be repealed on July 1, 2024 and current statute, which this legislation replaces, will be revived at such time. The bill was promoted by the Tennessee Chamber of Commerce and NFIB, with input from IOT. It was signed by the Governor on April 20, 2021 is effective July 1, 2021.

Work Comp - Disputes Concerning Employer's Failure to Provide Medical Care and Treatment (SB0764) An administration bill on behalf of the Bureau of Workers Compensation, the bill requires disputes concerning an employer's failure to provide medical care and treatment, medical services or medical benefits, or both, to meet certain requirements. Deletes requirement that all compensation be paid prior to an employee qualifying for vocational recovery assistance. Extends current provisions, as amended, for four years. Authorizes workers compensation judges to conduct judicial settlement conferences. The bill became law upon being signed by the Governor on April 30, 2021.

Counties to Self-insure their Risk of Loss in Lieu of Obtaining Bonds or Insurance to Cover Liability (SB1261) Present law requires county governments to either (1) obtain and maintain blanket surety bond coverage for all county employees not covered by individual bonds or (2) obtain and pay the premiums or other costs with respect to a policy of insurance that provides government crime coverage, employee dishonesty insurance coverage, or equivalent coverage that insures the lawful performance by officials and their employees of their fiduciary duties and responsibilities. This bill adds that a county that has elected to self-insure its liability under the Tennessee Governmental Tort Liability Act may elect, by resolution of its governing body, to self-insure its risk of loss instead of obtaining the above-described bonds or insurance, under the same terms as bonds or insurance under present law. A county making an election under this bill must do so by two-thirds vote on the resolution and shall file a copy in the office of the register of deeds. The bill became effective

Pharmacy Benefits Managers (SB1617) A bill brought by a coalition of healthcare providers, including the Tennessee Pharmacist Association and the Tennessee Oncology Practice Society, which would make various provisions of state law applicable to the pharmacy benefits offered by self-funded ERISA plans. The bill passed on May 4, 2021. Sections 1-4 of the bill are effective July 1, 2021. Section 5 is effective January 1, 2022.

Auto Club Applications (SB0724) An administration bill by TDCI and previously introduced in 2020, the legislation revises the annual application for a certificate of authority by an automobile club or association to a one-time application prior to commencement of operations. Provides licenses issued must be renewed annually and include updated documents and information. The bill became effective upon being signed by the Governor on March 29, 2021.

Advisory Council on Work Comp (SB0030) The “sunset” bill extends the advisory council on workers compensation to June 30, 2025. Signed by the Governor on March 29, 2021.

Asbestos Over-naming (SB0873) Brought by the American Tort Reform Association (ATRA), the bill specifies information that must be provided (within 30 days of filing a complaint) by a plaintiff in a sworn information form and included with any complaint filed in an asbestos action; requires dismissal without prejudice of plaintiff's asbestos claim as to any defendant whose product or premises is not identified in the required information form; requires that plaintiff's asbestos claim be dismissed without prejudice if plaintiff fails to provide the required information. It was signed by the Governor on April 30, 2021 and is effective July 1, 2021.

Discharging of Lien on Motor Vehicle - Notification Required (SB0112) As enacted, the bill clarifies that a lienor is required to send notice of a discharged lien to the department of revenue on the date the lien is discharged and that the department must be notified of the discharge within 72 hours of the date of discharge. The bill was signed by the Governor on April 28, 2021 and is effective July 1, 2021.

Cybersecurity – NAIC Model Act (SB0725) An administration bill by TDCI, the bill is the National Association of Insurance Commissioners (NAIC) “Insurance Data Security Law.” The stated purpose of this amendment is to establish the exclusive standards for data security, licensees' investigations of cybersecurity events, and licensees' notification of cybersecurity events to the commissioner and affected consumers. A "licensee" for purposes of this amendment and summary is a person: licensed, authorized to operate, or registered pursuant to laws governing insurance in this state; or required to be licensed, authorized to operate, or registered pursuant to such; and does not include a purchasing group or risk retention group chartered and licensed in another state or a person acting as an assuming insurer and domiciled in another state or jurisdiction. Signed by the Governor on May 6, 2021 and is effective July 1, 2021.

Captive/Reinsurance – Insurance Modernization Act (SB0726) Removes requirement that an assuming insurer appoint the commissioner of commerce and insurance as its agent for service of process in this state. Allows credit in instances where the reinsurance is ceded to an assuming insurer who satisfies certain conditions. Requires the commissioner create and publish a list of reciprocal jurisdictions. The bill requires the commissioner to include other jurisdictions as published through the National Association of Insurance Commissioners committee process on the list of reciprocal jurisdictions. The bill passed on May 5, 2021 and is effective July 1, 2021.

UAPA - Payment of Expenses Incurred During Proceedings Related to Contested Cases (SB0747) The bill establishes that a hearing officer or administrative law judge is authorized to order the agency to pay the party issued a notice the reasonable expenses incurred because of the notice, if the claims are not warranted by existing law or argument for modification of existing law and the claims in the notice do not have evidentiary support, or the agency issued the notice to harass or cause needless delay or expense to the party. Clarifies that the conditions in which an agency would be required to pay the party issued a notice are not satisfied simply by a state agency failing to prevail against the receiver. Prohibits a court from requiring a license or certificate holder to pay costs incurred by the DOH for judicial review or a chancery court decision unless the claims in the petition for judicial review are not warranted by law and not have evidentiary support or the judicial review was petitioned to harass or cause unnecessary delay to the agency. The bill became effective upon being signed by the Governor on May 12, 2021.

In the next few weeks, we will be completing our full Legislative Issues Guide which will go into greater detail on the above, and also address Bills that did not pass that would have been impactful. Many of those Bills could resurface in 2022 or the future, so we will continue to monitor them and provide you with any updates on their progress.

If you have any questions on the above legislation, please reach out to me at tmoore@insurors.org. About the Author

Trey Moore is the Government & Legal Consultant for Insurors. Moore operates Trey Moore Consulting in Nashville and was formerly senior public policy counsel for Bass, Berry & Sims. Prior to that role, he had nine years of experience in government relations with Acadia Healthcare, BlueCross BlueShield of Tennessee and others He is a native of Gallatin and a graduate of Sewanee and Nashville School of Law. u

Association Update

Trimble Named Hamilton Co. Republican Chair

Earlier this year, the Hamilton County Republican Party selected Arch Trimble IV of RSS Insurance in Chattanooga as the party's next chairman. Trimble said, “There are no words to express how thankful I am for the overwhelming amount of support received."

Insurors Adds Smith for Member Support

Insurors of Tennessee has announced the addition of Jake Smith to its staff as Member Support Specialist. Smith is a Hendersonville native and earned his Bachelor's degree from UT-Knoxville in Journalism and Electronic Media. He most recently worked as a marketing representative for the USLI program at the Chris Leef General Agency, Inc. in Kansas City. His grandfather, Craig Smith, was a former Insurors Board member and operated Martin & Hayes Insurance, and his mother, Janet Smith, is the president of Bailey Special Risks.

Haven Ins. Partners Acquires AIM; Adds Carr

Haven Insurance Partners, located in Jackson, is excited to announce that they have acquired American Insurance Management, Inc (AIM) and added Beau Carr to their team. Started by Bill Graves in 1981, AIM prides itself on being a local independent agency with a combined 100 years of insurance industry experience. AIM will continue to operate at its existing location with Bill and Rhonda Lovell staying with the company.

Carr will be joining their team selling both personal and commercial lines of insurance. He comes to Haven with 13 years of experience in the industry. Carr is passionate about helping others in times of need and protecting his customer’s assets. “I’m excited to join this new agency that is energetic about growing their business and building relationships in the community.” says Carr.

Denbo and Hoover Named "Top Producers"

Will Denbo of Commercial Insurance Associates (CIA) in Brentwood and Chip Hoover of J. Smith Lanier, a Marsh & McClennon Agency, in Murfreesboro, have both made the Insurance Business America "Top Producers" list for 2021. The list recognizes 128 standout producers who rose above the challenges of 2020 to ascend to the top tier of the U.S. insurance industry.

SouthPoint Risk Named to Grange's "Circle"

Grange Insurance has announced that SouthPoint Risk has earned the company’s prestigious Leadership Circle designation for outstanding achievements in 2021. Grange’s Leadership Circle designation is the highest honor awarded to a select group of high-performing independent agency partners who excelled in both business development and customer service during the previous year.

A leader in the insurance industry, SouthPoint Risk is one of just 36 agencies to receive this year’s award. This is out of nearly 4,000 independent agencies that sell Grange’s personal auto, home, life and business insurance products.

Noe Receives Community Partner Award

MTSU's professional selling program has named Jamie Noe of Insurance Group of America in Franklin as an EXL Community Partner Award winner. In 2019, Noe's agency pledged a $100,000 commitment to the Jones College of Business to further develop the Professional Sales Concentration within the Marketing Department.

Price & Ramey Contributes to SafeSpaces

Kingsport-based Price & Ramey recently donated a 1st Quarter total of $839 of their Jeans for Charity campaign to SafeSpaces. Employees who participate in the charitable giving program can wear jeans to work each Friday. Each quarter those funds are matched and donated to a local organization. With facilities in Sevierville, Dandridge, and Newport, SafeSpaces works to end domestic violence by supporting and empowering victims and educating the community.

Reliance Partners Named a "Best Workplace"

Great Place to Work® and Fortune magazine have honored Chattanooga-based Reliance Partners as one of the "Best Workplaces in Financial Services & Insurance™." This is Reliance Partners’ 4th time being named to this prestigious list.

Earning a spot means that Reliance Partners is one of the best companies to work for in the country. The Best Workplaces in Financial Services & Insurance award is based on analysis of survey responses from more than 840,000 current employees across the U.S. u