Tenn. Code Ann. § 56-27-114: Administrative expenses

(a) All acquisition and administrative expenses incurred in connection with the medical service corporation shall at all times be limited after the second year of operation to not exceed twenty-five percent (25%) of the total net premium income of the corporation. The expenses, during the first year, shall be limited to thirty-five percent (35%), and during the second year, the expenses shall be limited to thirty percent (30%). All acquisition and administrative expenses incurred shall be subject to the approval of the commissioner.

(b) "Administrative expenses," as used in this section, includes all expenditures except payments for subscribers' claims.

(c) Claim service expense shall be separately classified and included in administrative expense, unless otherwise ordered by the commissioner. No such corporation shall disburse as administrative expenses during any one (1) year a sum greater than the percentage limited by this section of payments received from subscribers during that calendar year.