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(a)(1) In order to provide a degree of protection to members of health clubs, each health club shall post a bond in an amount as determined by the commissioner for each location conducting business in this state. The bond shall be made with a bond issued by a corporate surety acceptable to the commissioner.
(2) If the commissioner has not promulgated a rule setting the required level of bonding, then the bond shall be in the amount of twenty-five thousand dollars ($25,000) for each location doing business in this state.
(b) The bond shall be maintained for two (2) years following the date on which the health club location ceases to conduct business in this state.
(c) In an action brought by the attorney general and reporter pursuant to part 1 of this chapter, the attorney general and reporter shall have the right to request that the total amount of the bond posted by the health club be awarded to the state for consumer restitution. Any person who has entered a health club agreement that is not fulfilled by the operator may make a claim against the bond.
(d) This section shall not apply to any health club or health club operator that has, for at least seven (7) consecutive years, operated under substantially the same ownership and control and maintained a satisfactory registration with the department of commerce and insurance.
(e)(1) In lieu of the surety bond required in this section, a health club may file with the department of commerce and insurance a current audited financial statement prepared by a certified public accountant licensed in this state that demonstrates to the department that either the health club or the health club operator has a financial net worth of at least ten million dollars ($10,000,000) available to satisfy any claims imposed by the department.
(2) Any health club that files an audited financial statement in lieu of posting the surety bond required by this section shall annually file an updated audited financial statement that complies with subdivision (e)(1). Within thirty (30) calendar days of receiving information that would render the health club ineligible for exemption from the surety bond requirement under this subsection (e), the health club or the health club operator shall notify the department of commerce and insurance of the change in the health club's financial status and post the required surety bond with the department.
Cite this article: FindLaw.com - Tennessee Code Title 47. Commercial Instruments and Transactions § 47-18-318 - last updated January 01, 2020 | https://codes.findlaw.com/tn/title-47-commercial-instruments-and-transactions/tn-code-sect-47-18-318.html
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