State RegulationsTN specificDifficulty 2/5
The Tennessee Department of Commerce & Insurance opens an investigation into an agency's sales practices and requests its transaction records. The agency's manager wonders whether the agency can simply disregard the inquiry. What is correct under T.C.A. § 56-6-120?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
T.C.A. § 56-6-120 gives the Commissioner of the Tennessee Department of Commerce & Insurance the power to investigate suspected violations, and that power is meaningful only if regulated parties respond. A licensee that disregards an investigative request obstructs the department's function and creates its own exposure. The practical lesson: agencies and producers treat department inquiries as mandatory business, assembling the requested records promptly rather than testing the Commissioner's patience.
Why the other options are wrong
- A) Licensees operate under a regulatory framework; their business records relevant to suspected violations are properly subject to the Commissioner's investigative reach.
- B) The duty is not limited to policyholders; licensees whose conduct is under review are squarely within the investigation's scope.
- C) Individual producers' personal consent is irrelevant; the entity's cooperation obligation runs to the department, not to its employees.
Memory hook
A letter from the Commissioner is not a suggestion — cooperate or compound the problem.