# Tenn. Code Ann. § 56-3-103: Officers must not be pecuniarily interested in investment or disposition of funds of domestic company > Tennessee · Statutes · In force URL: https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-103 ## Section - **Citation:** Tenn. Code Ann. § 56-3-103 - **Heading:** Officers must not be pecuniarily interested in investment or disposition of funds of domestic company - **Jurisdiction:** Tennessee - **Kind:** Statutes - **Status:** In force - **Text as of:** August 14, 2026 - **Source:** Compiled text - **Location:** TN Code / Title 56 / Chapter 3 / Section 56-3-103 ## Text (a) No director or other officer of any domestic insurance company organized under the laws of this state, and no member of a committee having any authority in the investment or disposition of its funds, shall accept, or be the beneficiary of, either directly or remotely, any fee, brokerage, commission, gift, or other consideration for or on account of any loan, deposit, purchase, sale, payment, or exchange made by or in behalf of the company, or be pecuniarily interested in the purchase, sale, or loan, either as borrower, principal, coprincipal, agent, or beneficiary, except that if a policyholder, the person shall be entitled to all the benefits accruing under the terms of the contract; provided, that this section shall not forbid the collection by attorneys of reasonable fees for the examination of titles and investigations of loans and investments. This section shall not bar a person who is an agent of an insurance company, in the normal course of business, from serving on the board or on a committee of an insurance company because the person receives commissions on insurance sales. (b) This section shall not bar or limit the ability of a director, officer, or committee member of an insurance company from: (1) Holding or owning stock or other ownership interest, if the stock or ownership interest has been disclosed to the insurance company, in a company or entity: (A) The shares of which are publicly traded on a national stock exchange or on an over-the-counter basis; (B) That is regulated by the federal reserve board, the federal deposit insurance corporation, the office of the comptroller of the currency, or the office of thrift supervision; or (C) That does business with the insurance company in the ordinary course of business and on terms no less favorable to the insurance company than are available to ordinary customers of the entity; (2) Receiving dividends or other distributions in the ordinary course of business from the stock or ownership interest; or (3) Serving as a director, officer, committee member, employee or agency of any entity listed in this subsection (b) and receiving fees or other compensation in the ordinary course of business for the service. Acts 1917, ch. 124, § 1; Shan., § 3369a148; Code 1932, § 6441; T.C.A. (orig. ed.), §§ 56-221, 56-310; Acts 1995, ch. 219, § 1; 1995, ch. 221, § 7; 2005, ch. 101, § 1. (a) No director or other officer of any domestic insurance company organized under the laws of this state, and no member of a committee having any authority in the investment or disposition of its funds, shall accept, or be the beneficiary of, either directly or remotely, any fee, brokerage, commission, gift, or other consideration for or on account of any loan, deposit, purchase, sale, payment, or exchange made by or in behalf of the company, or be pecuniarily interested in the purchase, sale, or loan, either as borrower, principal, coprincipal, agent, or beneficiary, except that if a policyholder, the person shall be entitled to all the benefits accruing under the terms of the contract; provided, that this section shall not forbid the collection by attorneys of reasonable fees for the examination of titles and investigations of loans and investments. This section shall not bar a person who is an agent of an insurance company, in the normal course of business, from serving on the board or on a committee of an insurance company because the person receives commissions on insurance sales. ded, that this section shall not forbid the collection by attorneys of reasonable fees for the examination of titles and investigations of loans and investments. This section shall not bar a person who is an agent of an insurance company, in the normal course of business, from serving on the board or on a committee of an insurance company because the person receives commissions on insurance sales. (b) This section shall not bar or limit the ability of a director, officer, or committee member of an insurance company from: (1) Holding or owning stock or other ownership interest, if the stock or ownership interest has been disclosed to the insurance company, in a company or entity: (A) The shares of which are publicly traded on a national stock exchange or on an over-the-counter basis; (B) That is regulated by the federal reserve board, the federal deposit insurance corporation, the office of the comptroller of the currency, or the office of thrift supervision; or (C) That does business with the insurance company in the ordinary course of business and on terms no less favorable to the insurance company than are available to ordinary customers of the entity; (2) Receiving dividends or other distributions in the ordinary course of business from the stock or ownership interest; or (3) Serving as a director, officer, committee member, employee or agency of any entity listed in this subsection (b) and receiving fees or other compensation in the ordinary course of business for the service. (1) Holding or owning stock or other ownership interest, if the stock or ownership interest has been disclosed to the insurance company, in a company or entity: (A) The shares of which are publicly traded on a national stock exchange or on an over-the-counter basis; (B) That is regulated by the federal reserve board, the federal deposit insurance corporation, the office of the comptroller of the currency, or the office of thrift supervision; or (C) That does business with the insurance company in the ordinary course of business and on terms no less favorable to the insurance company than are available to ordinary customers of the entity; (A) The shares of which are publicly traded on a national stock exchange or on an over-the-counter basis; (B) That is regulated by the federal reserve board, the federal deposit insurance corporation, the office of the comptroller of the currency, or the office of thrift supervision; or (C) That does business with the insurance company in the ordinary course of business and on terms no less favorable to the insurance company than are available to ordinary customers of the entity; (2) Receiving dividends or other distributions in the ordinary course of business from the stock or ownership interest; or (3) Serving as a director, officer, committee member, employee or agency of any entity listed in this subsection (b) and receiving fees or other compensation in the ordinary course of business for the service. Acts 1917, ch. 124, § 1; Shan., § 3369a148; Code 1932, § 6441; T.C.A. (orig. ed.), §§ 56-221, 56-310; Acts 1995, ch. 219, § 1; 1995, ch. 221, § 7; 2005, ch. 101, § 1. ## Nearby sections - [Tenn. Code Ann. § 56-3-101 Investments of insurance companies organized after May 11, 1895](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-101.md) - [Tenn. Code Ann. § 56-3-102 [Repealed]](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-102.md) - [Tenn. Code Ann. § 56-3-103 Officers must not be pecuniarily interested in investment or disposition of funds of domestic company](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-103.md) - [Tenn. Code Ann. § 56-3-104 Investments of domestic company in which officers pecuniarily interested not to be allowed as an admitted asset](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-104.md) - [Tenn. Code Ann. § 56-3-105 Regulation of compensation of officers, agents and employees of life insurance companies and fraternal benefit societies](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-105.md) - [Tenn. Code Ann. § 56-3-106 Pensions to officers, directors, or trustees, or to members of their families prohibited to domestic stock or mutual life insurance companies or fraternal benefit societies - Employees' retirement plans permitted](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-106.md) - [Tenn. Code Ann. § 56-3-107 Disbursements by life insurance companies to be upon vouchers or affidavits](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-107.md) - [Tenn. Code Ann. § 56-3-108 Dividends - Unauthorized payment - Penalty](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-108.md) - [Tenn. Code Ann. § 56-3-109 Dividends - Illegal division - Directors' liability to creditors](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-109.md) - [Tenn. Code Ann. § 56-3-110 Unclaimed dividends - Publication](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-110.md) - [Tenn. Code Ann. § 56-3-111 Certain insurance companies to report settlement or judgment in health care liability claims](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-111.md) - [Tenn. Code Ann. § 56-3-112 [Repealed]](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-112.md) - [Tenn. Code Ann. § 56-3-113 Valuation of bonds](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-113.md) - [Tenn. Code Ann. § 56-3-114 Valuation of securities](https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-114.md) --- Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_TN_T56_C3_S56-3-103. 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