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Legislative Preview

·        January 8, 2018

·        Jurisdiction(s):

·        Tennessee

·        Overview

·        Tennessee’s 2018 legislative session will commence on January 9, 2018. This bulletin provides an overview of the political landscape and key issues that are expected to surface during the upcoming session.

·        Details

·        On Tuesday, January 9, 2018, the Tennessee Legislature will convene to close out the business of the 110th General Assembly of the State of Tennessee. Since 2018 is an election year, there is an expectation that the legislative session will be shorter than usual, potentially adjourning as early as mid-April.

Governor Bill Haslam (R) is term-limited and 2018 is the final year of his second term.  Haslam generally works well with the Republican-controlled Legislature (Senate 28-5; House 74-25), and that cooperation is expected to continue into 2018.  The governor’s office, half of the Senate, and the entirety of the House will be up for election. Further, there is an unprecedented amount of turnover in the Legislature due to retirements and appointments, which will lead to more competitive races this summer and fall. With a new governor, speaker of the House, and many new legislators, the 111th General Assembly will bear little resemblance to its predecessor when it convenes in January of 2019.

The Legislature has been reasonable on most issues for insurers and business and 2017's session was successful overall (see PCI’s wrap-up for more details). The 2018 legislative session is expected to be more of the same, with no highly controversial issues affecting the property casualty industry likely to pass. PCI and industry key issues include distracted driving, airbnbs, and workers compensation in-state adjuster requirements.

The Department of Commerce and Insurance (DOCI) is headed by gubernatorial appointee Julie Mix McPeak. Commissioner McPeak was appointed by Governor Haslam to lead the DOCI on January 12, 2011. McPeak also serves as president of the National Association of Insurance Commissioners (NAIC). The regulatory climate in Tennessee has generally been viewed as positive. The industry has a solid working relationship with Commissioner McPeak, who has fostered a very balanced regulatory environment. The Tennessee Department of Labor and Workforce Development (DLWD) also has a good working relationship with the industry.

Political Overview/Member Changes

As a result of appointments and resignations throughout the off-season, the General Assembly will welcome several new legislators to the upcoming session. Senator Art Swann (R-Maryville), formerly a sitting state representative, was selected by the Blount County Commission to replace State Senator Doug Overbey (R-Maryville) who was appointed by President Trump to serve as U.S. attorney for the eastern district of Tennessee. State Representative Mark Pody (R-Lebanon), won the special election triggered by State Senator Mae Beavers’ (R-Mount Juliet) decision to resign from her seat to run for governor. Yet another special election was triggered when State Senator Jim Tracy (R-Shelbyville) was appointed as state director of the U.S. Department of Agriculture's Rural Development office by President Donald Trump. The primary for former Senator Tracy’s district will be held January 25, 2018, and the general election will be held March 13, 2018. Finally, Senate Majority Leader Mark Norris (R-Collierville) has been nominated by President Trump to serve as federal judge for the U.S. District Court for the Western District of Tennessee and is awaiting confirmation. Senator Norris is currently serving in his role as Senate majority leader, but will most certainly resign upon confirmation.

As for the House of Representatives, Jerome Moore, formerly a Blount County commissioner, has been appointed by that Commission to fill the open seat of Rep. Art Swann.  And due to Rep. Mark Pody’s election to the Senate, the Wilson County Commission will appoint someone to fill that vacant seat.  We are awaiting the official date for that Wilson County Commission to make that appointment.



Distracted Driving SB 658/HB 864: Legislation will return in 2018 to increase the penalty for the offense of unlawful use of a portable electronic device while driving to a Class B misdemeanor if the violation results in an accident causing serious bodily injury. Increases the penalty to a Class A misdemeanor if the accident results in death. PCI will continue to be supportive of distracted driving efforts.


Short-Term Rental Unit Act SB 1086/HB 1020: Legislation from 2017 will return in 2018. In general, PCI members do not support insurance mandates. In 2017, the bill as originally introduced had a $500,000 liability requirement. PCI had an amendment drafted to remove the mandatory insurance requirements and instead require a notice as the industry agreed to in California. The notice alerts the homeowner that they may not be covered for a loss and they should check with their insurer regarding proper coverage. The amendment has been agreed to and is ready to be added if the legislation moves in 2018.



Commercial Modernization: Legislation will be introduced to exempt several types of commercial

insurance coverages from Tennessee’s current filing requirements with respect to rates and policy

forms. PCI is working with the American Insurance Association (AIA) and the Insurors of Tennessee to

address concerns raised by the Department of Insurance.

Workers Compensation

In-state Adjusters: In response to proposed rule 0800-02-14 dealing with claims handlingstandards, concerns have been raised regarding the Department of Labor and Workforce Development’s interpretation of language that appears to require that workers compensation adjusters must be located within Tennessee. To clear up any confusion, legislation (draft attached) will be introduced to delete Tennessee Code Annotated, Section 50-6-413, and thus remove the need for any interpretation. Proponents of the legislation will be the Tennessee Chamber of Commerce, PCI, and other industry partners. The DWLD has stated that they will not oppose the legislation.

Attorney’s Fees: As a result of the 2013 workers compensation reform, there became a shortage of attorneys willing to take on new workers compensation cases. To address the shortage in 2016, Public Chapter 1056 was passed and TCA § 50-6-226(d)(1) was re-worded to address attorneys fees. TCA § 50-6-226(d)(1)(B) specifically deals with fees when an employer wrongfully denies a claim by filing a timely notice of denial, or fails to timely initiate any of the benefits, if the workers compensation judge makes a finding that such benefits were owed at an expedited hearing or compensation hearing. Subdivision (d)(1)(B) shall apply to injuries that occur on or after July 1, 2016, but shall not apply to injuries that occur after June 30, 2018. With the provision set to sunset in 2018, there will be a push to withdraw the sunset provision and let the statute stand. PCI seeks member feedback on whether to let the provision stand.

Medical Malpractice

Insurance Costs Reduction Act SB 744/HB 1150: Legislation to enact the Insurance Costs Reduction Act to coordinate the investigation of an alleged occurrence of a medical injury has been introduced the last couple of years and will be back in 2018. The bill creates the Patient Compensation System (PCS). The PCS is administered by the department of health; however, the department may contract with designated agents to provide for the administration of this system. To date, the proposal has not garnered any traction and is not expected to do so in 2018. PCI will continue to oppose the legislation.

Study of Creating a Healthcare Liability No-fault System SB 892/HB 1089: Legislation that requires the commissioner of commerce and insurance to convene a working group of representatives from the healthcare liability insurance industry and healthcare providers to study creating a no-fault system to establish healthcare provider responsibility so that healthcare providers' insurance premiums will be reduced, will be back in 2018. To date, the proposal has not garnered any traction and is not expected to do so in 2018. PCI will continue to oppose the legislation.

Posted 3:53 PM

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