June 2013 • Volume 2, Number 2
TENNESSEE INSURANCE LEGAL NEWS EDITORIAL BOARD
John E. Anderson, Sr., Co-Editor
615.620.1735 • janderson@dickinsonwright.com
Autumn L. Gentry, Co-Editor
615.620.1755 • agentry@dickinsonwright.com
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http://tn.gov/commerce/
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TENNESSEE ATTORNEY GENERAL HOLDS THAT TENNESSEE
STATUTE PROHIBITING PREFERENCES OR DISTINCTIONS
IN CERTAIN INSURANCE TRANSACTIONS IS NOT
UNCONSTITUTIONAL
by John E. Anderson, Sr., who is a member in Dickinson Wright’s Nashville oce,
and can be reached at 615.620.1735 or janderson@dickinsonwright.com
In its April 24, 2013 opinion, the Tennessee Attorney General opined
that the Tennessee Unfair Competition and Unfair or Deceptive
Practices Act, which prohibits preferences or distinctions in certain
insurance transactions, is not unconstitutional. The statute at issue,
Tenn. Code Ann. § 56-8-104(18)(A), provides as follows:
(18) Preferences or Distinctions in Certain Insurance
Transactions prohibited.
(A) Making, oering to make, or permitting any preference or
distinction in property, marine, casualty, or surety insurance as to
form or policy, certicate, premium, rate, benets, or conditions
of insurance, based upon membership, nonmembership, or
employment of any person or persons by or in any particular
group, association, corporation, or organization, or making the
preference or distinction available in any event based upon any
ctitious grouping of persons . . . .
The opinion explained that this statute essentially prohibited
insurance companies from oering discounts to certain groups of
people based upon their membership and/or employment by a
particular organization or company. “This type of anti-discrimination
restriction is designed to prevent insurance companies from oering
discounts or other preferences ‘to persons, or groups of persons, based
upon factors other than legitimate rate-making considerations.’” These
provisions prevent “unfair discrimination among similarly-situated
purchasers of insurance.”
The Attorney General concluded that the anti-discrimination restriction
in Tenn. Code Ann. § 56-8-104(18)(A) does not violate the commercial
speech protections of either the First Amendment of the United States
Constitution or Article I, Section 19 of the Tennessee Constitution.
“Both of these constitutional guarantees provide a qualied protection
for commercial speech.”
Additionally, the Attorney General noted that by enacting Tenn. Code
Ann. § 56-8-104(18), the General Assembly eectively has prohibited
insurance companies’ preferences in premiums, rates, benets, or
other conditions of insurance based upon group membership or
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