Governor Bill Lee signed two insurance-related bills into law in April 2026, one mandating fidelity bonds for HOAs and another restructuring group insurance oversight committees.
Senate Bill 2326, chaptered as Public Chapter 731 on April 23, 2026, amends Tennessee Code Annotated, Title 66, Chapter 27. Starting January 1, 2027, any HOA that collects assessments for common expenses must obtain and maintain a blanket fidelity bond. The coverage must protect the association against losses from theft or dishonesty by its officers, directors, persons employed by the HOA, managing agents, or employees of those managing agents.
The law lays out a specific formula for how much coverage is needed. The bond or insurance policy must equal the HOA’s reserve balances plus one-fourth of its aggregate annual assessment income, with a floor of $10,000. That means the coverage scales with the size and financial activity of the association. Boards of directors and managing agents are both permitted to obtain the bond or insurance on behalf of the HOA…