(a)The association shall:
(1)Adopt procedures to prevent dissemination of confidential information;
(2)Maintain cash, readily marketable securities, or other assets, or a line of credit, approved by the commissioner, sufficient to immediately continue the payment of the compensation obligations of an insolvent self-insurer pending assessment of the member self-insurers;
(3)Provide for a risk-based security program in its plan of operation;
(4)Hold individual collateral for member self-insurers who do not participate in full in the risk-based security program;
(5)Pay the legitimate claims of insolvent self-insurers;
(6)(A) Seek tax exempt status from the internal revenue service under section 501(c) of the Internal Revenue Code ( 26 U.S.C. § 501(c) ); and (B) Not conduct any activiti Free access — add to your briefcase to read the full text and ask questions with AI
(a) The association shall: (1) Adopt procedures to prevent dissemination of confidential information; (2) Maintain cash, readily marketable securities, or other assets, or a line of credit, approved by the commissioner, sufficient to immediately continue the payment of the compensation obligations of an insolvent self-insurer pending assessment of the member self-insurers; (3) Provide for a risk-based security program in its plan of operation; (4) Hold individual collateral for member self-insurers who do not participate in full in the risk-based security program; (5) Pay the legitimate claims of insolvent self-insurers; (6) (A) Seek tax exempt status from the internal revenue service under section 501(c) of the Internal Revenue Code ( 26 U.S.C. § 501(c) ); and (B) Not conduct any activities inconsistent with such status; (7) Establish procedures for the indemnification and defense of any directors and officers as against any claims made against a director or officer in the performance of the director's or officer's duties; and (8) Seek recoveries from insolvent self-insurers and third parties as appropriate. (b) The association may: (1) Appear in, defend, and appeal any action on a claim brought against the association; (2) Employ or retain such persons as are necessary to handle claims and perform other duties of the association; (3) Borrow funds necessary to affect the purposes of this part in accordance with the plan of operation. In the event of a member default resulting in liabilities payable by the association in excess of its capacity to pay from assessments, the association, in its sole discretion, may by resolution request the Tennessee local development authority to issue bonds or notes pursuant to title 4, chapter 31, part 8, in such amounts as the association may determine necessary to provide funds for the payment of said liabilities. However, the amount of the bond issuance may be limited by §§ 4-31-804 and 4-31-805 with the Tennessee local development authority having the final authority to determine the total amount of the bond issuance including issuance costs. When the association and the Tennessee local development authority agree that bonds or notes will be issued, the association may annually assess member self-insurers for an amount necessary to secure and provide for the repayment of the indebtedness, including the principal, redemption premium, if any, and interest on, and related costs of issuance of such indebtedness, including bond investors insurance. Necessary assessments collected pursuant to this authority must be collected under the same procedures provided in this section. Assessments collected under this section may be assigned and pledged to or on behalf of the Tennessee local development authority for the benefit of the holders of such indebtedness, in order to provide for the payment of the principal of, redemption premium, if any, and interest on such indebtedness, the costs of issuance, and the funding of any reserves and any other payments under the documents under which the indebtedness was incurred. In addition to the assessments provided for in this section, the association in its sole discretion may utilize assessments made under this section to service such indebtedness, if necessary. The association is not obligated to pay liabilities solely from the proceeds of bonds or notes issued under § 4-31-804 ; provided, that if the association causes assessments to be made under this section for such liabilities, and assigns and pledges such assessments to or on behalf of the Tennessee local development authority as issuer of such indebtedness for the benefit of the holders of bonds or notes, the association may administer such liabilities; (4) Sue or be sued, including the power and right to intervene as a party before any court that has jurisdiction over an insolvent self-insurer; (5) Negotiate and become a party to contracts as are necessary to carry out the purpose of this part; (6) Carry out the association's responsibilities directly or by contract, purchase services and insurance, and borrow funds as the association deems necessary for the protection of the members of the association and the members' employees; (7) Receive confidential information concerning the financial condition of self-insured employers whose liabilities to pay compensation may devolve upon the association; and (8) Perform other acts as are necessary to effectuate this part. (c) With respect to any suit involving the association: (1) Any action relating to or arising out of this part against the association must be brought in a court in this state. The court in which such action is brought has exclusive jurisdiction over any action relating to or arising out of this part against the association; and (2) Exclusive venue in any action brought against the association is in the circuit or chancery court in Davidson County; provided, that the association may waive such venue as to a specific action.