Requirement that Local Governmental Entities Seek Competitive Bids for the Purchase of Insurance Following Passage of Chapter 719 of the 2022 Tennessee Public Acts - Articles

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Requirement that Local Governmental Entities Seek Competitive Bids for the Purchase of Insurance Following Passage of Chapter 719 of the 2022 Tennessee Public Acts

Posted by: Karen Belcher on Jul 28, 2022

Court: TN Attorney General Opinions

Hearing Date: 07/25/2022

Opinion Number: 10

Question 1: If a local governmental entity is using the professional services of an insurance producer under 2022 Tennessee Public Acts, chapter 719

Opinion 1: No. Tennessee Code Annotated § 12-3-1209(a), as amended by 2022 Tennessee Public Acts, chapter 719, does not relieve a local governmental entity from complying with competitive-bidding requirements when it purchases insurance.

Question 2: If not, to what extent may an insurance producer assist a local governmental entity in obtaining insurance?

Opinion 2: While Tenn. Code Ann. § 12-3-1209(a), as amended by 2022 Tennessee Public Acts, chapter 719, does not relieve a local governmental entity from complying with competitive-bidding requirements when it purchases insurance products, by adding “services from an insurance producer” to the other professional services that were already expressly exempt from competitive bidding under Tenn. Code Ann. § 12-3-1209(a), Public Chapter 719 does relieve a governmental entity from competitive-bidding requirements when it is procuring the services of an insurance producer. To the extent that an insurance producer is providing services in assisting a local governmental entity, competitive bids for those services are not required. Services rendered by an insurance producer to a local governmental entity could include, for instance, designing a comprehensive insurance program for the entire entity, identifying risks, recommending ways of reducing risks, and performing analyses to minimize costs while maximizing protection.

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