Tennessee Ethics, Marketing & Unfair Trade Practices
The final state topic covers how a Tennessee producer must behave in the market: the prohibited unfair trade practices, the duty to handle client money properly, and the advertising and disclosure standards that keep sales honest. Most of these rules come from Tennessee's Unfair Trade Practices Act and related regulations.
Unfair Trade Practices and Prohibited Conduct
Tennessee's Unfair Trade Practices Act (based on the NAIC model) prohibits misrepresentation of policy terms, false or misleading advertising, unfair discrimination between similar risks, and deceptive claim practices. Rebating — offering part of the premium or commission, or other valuable consideration, as an inducement to buy — is also prohibited. Violations can lead to fines and license suspension or revocation by TDCI.
Twisting, Churning, and Honest Comparisons
Twisting is using misrepresentation or incomplete comparisons to induce a policyholder to drop an existing policy and buy a new one; churning is a similar replacement abuse using the same insurer's policies. Both are prohibited in Tennessee. When a producer compares or replaces coverage, the comparison must be complete and fair, and benefits, dividends, and an insurer's financial condition must never be misrepresented.
Fiduciary Duty and Handling Client Funds
Premiums a producer collects belong to the insurer or the client, not the producer. Tennessee treats this as a fiduciary responsibility: funds must be remitted properly and must not be commingled with personal funds or converted for personal use. Failing to account for premiums, or misappropriating client money, is grounds for discipline and can also be a crime.
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State-specific details
State exam facts
- State regulator
- Tennessee Department of Commerce and Insurance
- Exam vendor
- Pearson VUE
- Prelicensing education
- None (state-mandated prelicensing was removed effective March 21, 2023)
- Passing score
- 70%
Who regulates life & health insurance licensing in Tennessee?
The Tennessee Department of Commerce and Insurance (TDCI) licenses producers and contracts with Pearson VUE to develop and administer the licensing examinations.
Does Tennessee require prelicensing education for the life & health exam?
No. Tennessee removed its state-mandated prelicensing education requirement for insurance producers effective March 21, 2023, though a prep course is still recommended.
How is the Tennessee life & health exam administered?
The exam is delivered by Pearson VUE, and a 70% passing score is required.
Sources: https://www.tn.gov/commerce/insurance.html, https://www.pearsonvue.com/us/en/tn/insurance.html
In the Tennessee Life & Health Insurance Producer Exam guide: A KEY CONCEPT box, a Common Traps list and a Check Yourself set closing each of the 9 national chapters. Practice here stays free.